When people often talk about starting their own business, they use the terms “entrepreneur” and “small business owner” interchangeably. However, a report from the Quarterly Journal of Economics indicates a difference between the two.

According to this study, the primary difference between an entrepreneur and a small business owner is the business’s legal structure.

In this blog, we will explore the difference between being an entrepreneur and a small business owner.

Entrepreneur vs. Small Business Owner

To understand the difference between these two, it’s essential to define each of them first.


The definition of an entrepreneur is: “an individual that organizes/operates a business, taking on a financial risk to do so”

Entrepreneurs can focus on independence and innovation. Many times, an entrepreneur can be found starting a new business based on ideas slightly outside of the norm.

Therefore, most of the time, an entrepreneur is just starting, which means they do not have access to resources like an established company. They often rely on business loans and other funding, which makes them apt to take significant risks.

Business Owner

The definition of a business owner is: “an individual/entity that owns a business to profit from the success of the said business.”

Typically, a business owner is more established in the industry and understands what they need to do to succeed. While business owner may start their own business, they are just as likely to take on a leadership role at an established company.

Their experience and expertise make them less apt to take risks. Most business owners prefer to stick with what works instead of stepping outside the box for a potential increase in revenue.

Are You an Entrepreneur or Small Business Owner?

The way you describe yourself impacts your success more than you might think. The term “self-employed” is not accurate for all business owners.

The terms “entrepreneur” and “small business owner” are not just two different titles- they have varying mindsets and behaviors. Your personality and the legal structure of your business will determine the status of you and your business.

Whether you are an entrepreneur or a small business owner, Dorra Financial Group can help you get the funding you need.