Difference between Entrepreneurs and Managers | 7 Critical Differences

The entrepreneur and managers are the most valuable people behind any organisation and their roles are equally important for functioning.

Although both the term sounds similar in some contexts yet there are few critical difference between entrepreneurs and managers. The most prominent difference lies in their role, position, thought process and approach for a business organisation.

Therefore, this article will briefly explain how entrepreneurs and managers are different from each other. However, sometimes, an entrepreneur might work as a manager and the managers can be an entrepreneur later on.

Entrepreneurs & Managers Definition:

The simplest definition of an entrepreneur is an individual behind an enterprise/ organisation who had founded, nurtured, expanded and grew that organisation. The reason behind the existence of an enterprise/ company/ corporations is none other than an entrepreneur.

Though I don’t mean that entrepreneurs are the only person behind established companies, instead there are many other people (managers, executives) as well behind the establishment of organisations.

However, the managers are the pillars of any organisation and equally important for their functioning. The managers are executors or helping hands (followers) of an entrepreneur.

In other words, if the entrepreneur is a thinker, the manager would be the action taker on behalf of the entrepreneur. Similarly, if an entrepreneur plans new marketing strategies, the managers are responsible to implement those strategies on the ground.

Difference between Entrepreneurs and Managers:

The major difference between entrepreneurs and managers is that the entrepreneurs are innovators, inventors having the ability to turn an idea into a business, on the other hand, managers are simply an employee, work for emoluments and perform a set of activities as directed by the superior or entrepreneur.

However, we can also differentiate entrepreneurs from managers based on various other parameters which are explained below.

  1. An entrepreneur arranges various significant tools, support like finance, land, labour, machinery and technology to set up an organisation, on the other hand, a manager ensures an efficient operation of the business and performs day to day activities.
  2. An entrepreneur is the owner of the company, hence has to bear every risk associated, losses or gains, however, a manager, being an employee, doesn’t need to bear such risks and works for the shake monthly salary.
  3. The entrepreneurs are innovators, inventors capable of turning an idea into a business, whereas, managers are those professionals who are expert in executing certain tasks and responsibilities as well as managing the team or subordinates to achieve predetermined goals of the organisation.
  4. The entrepreneurs earn a profit from the company for all efforts, hard works, on the other hand, managers can draw their remuneration and incentives from the organisation for their works.
  5. The entrepreneurs are risk taker, never hesitate in taking risks when it comes to new business opportunities or implementing the new idea to increase the sales or business boundaries. On contrary, the managers are not allowed to take risks, they only ensure the efficiency and accuracy of assigned tasks and activities.
  6. The primary focus of an entrepreneur is to set up, expand and make the company profitable, however, the managers’ focus to formulate and implement strategies, accomplish assigned tasks and ensure suitable operation of businesses.
  7. An entrepreneur is a highly ambitious personality, continuously seeking or thinking of opportunities to take their company to the next level, on the other hand, the managers believe in achieving their sales/ management objectives or accomplishing daily activities.

Entrepreneurs vs Managers (Comparison Table):

For your better understanding the difference between entrepreneurs and managers, we prepared a comparison chart below.

Aspects Entrepreneurs Managers
Position Owner Employee
RoleExecuting ideas & Setting up a business Administrating controlling, operating a business
FunctionsAccumulates land, labor, tools, machinery, technology for organization Utilize available resources, implement strategies, ensures proper functioning of organization
Risk Has to take financial risk Does not take risk
Vision & Mind-setMake profits and serve society Self development & growth
ApproachInventor, innovator Executor, planner

Final Thought:

Hope this article would have differentiated the difference between entrepreneurs and managers. In a nutshell, we can say their roles and functions in the organisation are different from each other. However, as we discussed above they are equally important for the functioning of the organisation.

Researchgate.com (source)

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