As accountants, we work with different types of business owners within various scopes in our practices. The focus today is to tackle the difference between working with an entrepreneur and a business owner from an accountant perspective.
Allow me to state the differences hereof:
Differences between Entrepreneurs and Business Owners are not vast and this is because their main objective is profit. What sets them apart is their diverse characters and how they operate their businesses.
A business owner focuses on putting out fires, and in that sense tends to be more reactive. They envision a world where employees would do their jobs, customers would pay on time, and software or equipment would function as it was designed. They are obsessed with having proper systems in place. A business owner makes decisions unintentionally that lead to themselves buying a full-time job. They often start a business from the ground and build it up, using skills that they have acquired over years of experience or through qualifications they have obtained. There are generally people who assist Business Owners in running the business while they mainly concentrate on the core functions of the business.
An Entrepreneur, on the other hand, does not necessarily acquire skills such as that of a Business Owner, instead, they have certain traits that drive them to start an operation. To be an entrepreneur you need to be goal-driven, passionate, determined and have strong work ethics. Entrepreneurs also have solid people skills, are creative, open-minded and disciplined. The reality is that most entrepreneurs work an insane amount of hours for little or nothing because they are mostly driven to either solve a problem or make it easier. As compared to business owners, they are not obsessed with having a proper system. They can work by themselves for a longer time.
Both traits of the business owner and entrepreneur are needed and essential in any kind of business to succeed. Therefore a person can be both simultaneously. You can be both an entrepreneur and business owner but not every entrepreneur is necessarily a business owner or vice versa.
What I have picked up as an accountant is that it is always easier to work with a business owner than an entrepreneur. This is not meant in a negative way though and I will explain the reason why. The fact that entrepreneurs are not obsessed with having proper systems in place, can compromise the success of their businesses. Most entrepreneurs are careless with regards to Tax compliance status, registering with regulatory bodies, etc. When you are in any form of business you need to make it a priority to know and understand your business position. You shouldn’t be forced by certain circumstances to comply. At least know how much you are making per month, your business anniversary, your company’s financial year-end, assets portfolio, monthly basic expenses, liabilities, earning a salary, etc.
A typical example, an entrepreneur will ask for a set of financial statements because they need to submit it for a tender or they are applying for some funds. The question that always arises is, how do you know you will qualify when you do not know what your turnover is? Having updated reports on a monthly basis aids you in making financial decisions, informed ones for that matter.
Though you are an entrepreneur, it is always vital to carry the role of a business owner or some aspect of it, because that will greatly benefit you as far as the growth of your business is concerned. Mainly because we operate in a country with legislative laws and institutions that are expected to follow them before they can issue any form of finance or projects.
Compiled by Ms. Dikeledi Seoloane, on behalf of Matsobanemetja Business Consulting Pty Ltd.
http://www.matsobanemetja.co.za
Matsobanemetja Business Consulting Pty Ltd 