As more and more people make the move to the gig-economy, self-employment, and startups, the question of what exactly makes one an “entrepreneur” has become more prevalent. What’s the difference between an entrepreneur and a small business owner? The answer, it seems, is a matter of risk.

While these two groups share many similarities, there are some distinctive differences between them. Starting a small business requires funding, a solid business plan, and preparation for things like inventory management and a point-of-sale system, while becoming an entrepreneur takes a bit more: namely, the ability to take major financial and personal risks in order to create something that can be built upon. In other words, entrepreneurs are more focused on future possibilities, while small business owners concentrate on short-term decisions that will affect them now.

According to BusinessNewsDaily1, another trait that separates these two groups is legal status. Entrepreneurs tend to become incorporated, creating a legal barrier between their business funds and personal funds that can help protect personal finances in the event of a business failure or a lawsuit. Small business owners are often tempted to mix business and personal finances, which can lead to problems down the road should revenue slow down. One easy way to help prevent problems is to make sure you use separate accounts for all your personal and business needs and to keep detailed financial records. Using a business credit card instead of a personal card to make purchases for your company can help you build up a nice credit line, which will come in handy down the road should an emergency pop up within your business.

Small business owners may be wondering what incorporating could do for them, but there are actually several ways it can be helpful even if you don’t have many employees. Becoming incorporated can help you attract investors, and it can make the selling process much easier if that’s an option for you down the line. You’ll want to seek the advice of an accountant, since the process of incorporation can be costly, depending on your specific situation.2

Another difference between small business owners and entrepreneurs is that small business owners, generally speaking, have a bit more freedom. Many people have turned to self-employment in recent years because it offers a more flexible schedule than a traditional job, or because they’ve suffered a career setback and want to try something new. For others, starting a business also allows them to tackle new challenges and expand their horizons into various areas, something they might not have the time or creative freedom to do otherwise.

"The great thing about owning a small business is I rarely experience the same day twice. Because every day, I learn something new about the act of owning a business. Whether it’s something about taxes, about accounting, or the plethora of other things that go into running a company, I am always fascinated by the parts and pieces of knowledge that I learn every day just to keep the business on track,” says Michael Wilson, co-founder of Mad Dancer Media.3

Entrepreneurs also tend to devote a lot of personal time to building a brand, setting up investments, or ensuring that the company will run in their absence so that they are able to focus on other things–in other words, the next big idea–whereas small business owners are often involved in all the daily operations and want to have a hand in every decision made.

The good news is that no matter which category you fall under, there are plenty of resources and programs to help you expand your business or just take it to the next level. For instance, Nevada State Bank offers business credit cards4, real estate financing5, equipment financing6, and more. Small business owners can benefit from the right loan, which will help them secure a brick-and-mortar store for an online business or to grow exponentially.

  4. Subject to credit approval. Certain terms, conditions and restrictions apply. See a banker for details.
  5. Subject to credit approval. Terms and conditions apply. See a banker for details.
  6. Equipment lease financing is subject to credit approval. Certain criteria apply. See a specialist for details. Equipment lease financing is offered through Zions Credit Corporation, a subsidiary of Zions Bancorporation, N.A.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank. Nevada State Bank is a division of Zions Bancorporation, N.A. Member FDIC