How is an entrepreneur different from a manager?

While the term manager and the term entrepreneur do not always describe two different people within a business, especially in a start-up, they are most definitely linked to two different approaches, personalities even.

While it is not impossible (and in the early days of an enterprise, this flexibility is often necessary), I do not know many managers that feel comfortable as entrepreneurs and vice versa.

They usually prefer one role over the other, which leads to them performing better in that capacity. Where do you see yourself? How is a successful entrepreneur different from an outstanding manager, the strongest characteristics of both, and what can they learn from each other? Let's start with the basics: role description.

An entrepreneur is often the one who creates an enterprise, the owner or the biggest shareholder. He makes his idea into reality, so his relationship with the organisation is different from that of a manager.

He is the driving force behind the strategy, spirit and culture of the company, its expansion. Entrepreneurial thinking encompasses big ideas, ones that fit in a category of a vision.

His primary focus is to work ON the business, where the manager dedicate himself to working IN it.

The overall objective of both is the same – prosperous business venture. However, their motivations and perspectives vary.

The approach to risk

An entrepreneur takes risks, even looks for them. A manager may balance that approach, as their role is typically risk-averse, ensuring that operations can continue, even should the worst happen. Their aim is the company's smoothest possible operation, with all its systems in place, objectives set and reached, issues resolved, and deadlines met.

Read more: Solid and prioritised planning will result in achieving your goals

Perspective

While both encompass characteristics of a leader, they transpire in different forms. A manager, well, hand manages the everyday life of a business. Their role is to organise and monitor an enterprise's functions to enable the fulfilment of the business plan aligned with the growth strategy.

They focus on the day to day operations, zooming in on the short and medium term actions that contribute to the realisation of long term objectives. If we were to compare, a manager has a close view of the operations, and an entrepreneur uses a wide-angle lens. Of course, he needs to be aware of the proceedings, and this in no way means disconnection from the operations, merely a different point of view. A manager's view focuses on the business internally, whereas an entrepreneur looks beyond running the business.

They have a heightened sense of recognising consumer problems and actively look for ways of elevating it. A manager will organise the businesses functions to manufacture and deliver that solution.

People skills

So both need to have a decent way of working with people. Although, again, each role utilises a different aspect of that skill. An entrepreneur exudes confidence and passion to entice with their vision, where a manager deals with team performance issues, aspects of personal development, hiring, etc.

However, both have a role in building the culture and strengthening their team's sense of belonging.

What entrepreneurs need to have is a managerial approach to money. This means excellent grasp of available resources and projections.

Can managers benefit from being more entrepreneurial?

Of course, and I believe good managers have that element in them. It makes them more open to creativity and innovation. They become not the guardians of the business's status quo, but partners who suggest ways of improving ongoing operations, assisting with efficiency, improving competences of the team, highlighting new potential resources, and optimising procedures.

Although they may not bear any personal financial responsibility for the business (most of the entrepreneurs will take on financial risk to set up a business) good managers should still be invested in the organisation and its culture. If you find a manager that can maintain both passion and perspective, do whatever you can to make them part of your team, as they can become an invaluable asset.

Willingness to fail

An entrepreneur knows that not all endeavours are going to be successful. It is part of the process, yet when things miss their mark, that does not mean the end of their entrepreneurial journey.

They learn, incorporate what makes them stronger and start again. Risk and uncertainty are embedded in that experience. Managers are fighting hard to keep things afloat.

They build safe, stable environments for people to perform in and processes to happen. Failure is almost beyond their vocabulary. They are the protectors of the practical, operational, and advocates of showing fast results.

Read more: Getting in the zone

Decision-making process

The way they make decisions is a distinguishing factor. Entrepreneurs are often described as business creators whose choices are sometimes less rational, and they refer to gut feelings (although I always recommend research). These are processes or descriptions, you would not associate with a manager.

A manager is an employee, after all. They should be comprehensive and cautious, investigate issues thoroughly, collect and present hard data as a basis for their recommendations and choices. It's logic and numbers.

Instinct is not often linked with the term manager, irrespective of the size or market maturity of the organisation they represent. Perhaps the fact that managers are rarely business owners helps them maintain that detachment needed to optimise day to day. Their responsibility is to run the organisation. An entrepreneur's obligation is to strategise how to strengthen the market position or enter a new one.

So, in simplest terms, an entrepreneur is the owner, risk-taker, a manager runs it and minimises risk to the best of their ability. One is the founder, the other an employee of the company.

The former sets out an objective. The latter organises resources to achieve it. One suggests the improvement, and the other ensures its implementation. This, in my view, is how an entrepreneur differs from a manager.

Without a doubt, both roles are beneficial to the development of an organisation. If they can be split between two people, that is even better as each can play to their strengths, creating space for the other to focus on what they do best, in tandem propelling the business forward.

Read more: Do entrepreneurs need a strategy?