How are a manager and an entrepreneur different?

“When entrepreneurs and investors come together to pool resources, they form a team. When employees and self employed specialists come together to network, they form a union.” – Robert Kiyosaki

Often entrepreneurs are confused with managers because they perform the same tasks as managers perform planning, directing and managing a whole business and the employees. However, the two are not the same. An entrepreneur needs to be an able manager but a manager doesn’t necessarily need to be an entrepreneur.

John Naisbitt said “We are shifting from a managerial world to an entrepreneurial world”. This quote is quite true because entrepreneurs prefer doing the tasks of the managers themselves to curb finances and because they trust themselves more regarding the vision and well-being of the company.

Here are some basic differences between an entrepreneur and a manager:

1. Motive

The main motive of an entrepreneur is to follow his passion and find a solution to an existing problem. Once he does find a great idea, he sets up his own enterprise and focuses on making profits. Whereas, a manager’s main motive is to provide efficient services to an enterprise by putting his skills to use.

2. The main job

Entrepreneurs are more concerned with the building of a business with the help of a dedicated team and work towards making their business sustainable if not profitable. The manager’s main task is to manage the business and make sure it runs smoothly and efficiently.

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3. Risk-taking

An entrepreneur is the one who sets up the enterprise so the onus of making profits and making the business successful falls on him. In that sense, he is a risk taker because the company can go for a toss making him economically unstable. However, a manager doesn’t bear any risk financially as he is supposed to provide services to the enterprise and isn’t supposed to worry about the organisation’s finances.

4. Innovation

An entrepreneur has to be innovative with his idea or revamping an already existing product or service in order to make profits in the long run. A manager, on the other hand, can choose to be innovative with his skills or manage everything the tried and tested way.

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5. Income

An entrepreneur’s income doesn’t necessarily have to be positive; it can be zero or negative depending upon the profits the enterprise is currently making. However, a manager is a mere employee in the organisation and his income levels are always positive and fixed for the services he renders.

6. Rewards received

The rewards received by an entrepreneur for his hard work and the risk he undertakes is profit which isn’t fixed or reliable. The manager receives a fixed salary as a compensation for his services and might get a bonus depending upon his quality of work and company policies.

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7. Decision making

An entrepreneur makes all strategic and high-risk decisions pertaining to the expansion, takeovers, mergers, capital budgeting, pricing policies etc regarding the firm where as all decisions related to the day-to-day operations is made by the manager.

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Niharika Nandi

Author: Niharika Nandi

Aspiring start-up writer who loves traveling. I'm also a self-confessed potterhead and a professional bathroom singer who likes to bake and devour hazelnut shakes in my free time.

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