Why Should We Know This?

Why should we understand the difference between an entrepreneur and a manager? As you know, LUBM has been training people to succeed in business for a decade now. This includes providing business degrees to those with aspirations to manage. It also includes those who want to start their own business. Over time, we understood that managers and entrepreneurs have vastly different goals and perspectives.

Understanding the difference between an entrepreneur and a manager boosts career clarity. Some of our learners start their courses with their goals already decided. They know they want to leverage their new MBA or MSc to rise through the ranks in their current company. Alternatively, they are already focused on gathering knowledge that will help them start their professional venture. However, some sign up so they have better prospects overall. Moreover, others may be working towards a promotion, but choose the entrepreneurial path later.

Overall, we think that understanding the difference between an entrepreneur and a manager is important. If you learn it before or during your course, it helps with clarity. It helps you choose the right development path. Therefore, you can excel in leadership or operations.

So, Who Is an Entrepreneur?

An entrepreneur identifies opportunities and builds ventures from scratch. They are the ones who take a chance on their perspectives. They also take a chance on their skills. Entrepreneurs embrace uncertainty and innovate relentlessly. That’s part of the differences between entrepreneurs and managers. Further, they mobilize resources to turn ideas into reality. What’s interesting is that more people want to be founders and business owners today. In fact, a New York Post article from 2024 announced something fascinating. A survey revealed that 26% of Gen Z and 39% of millennials consider themselves entrepreneurs. Couple this with the ‘side hustle’ trend, and it’s a significant factor.

Meanwhile, Who Is a Manager?

A manager optimizes systems and ensures smooth daily operations. Let’s look at that sentence within the context of the difference between entrepreneurs and managers. An entrepreneur may take the risk and start something new. However, it falls to a manager to mitigate risks and enforce processes consistently. Running a business can be incredibly challenging by itself. This is where managers come in. It is upto them to be the middleman between the entrepreneur and employee. They are the ones who manage the details of an entrepreneur’s vision.

Additionally, they allocate resources to meet the entrepreneur’s organizational goals. Managers handle the day to day functioning of the business. They ensure that departmental operations function smoothly.

The Major Difference Between Entrepreneurs and Managers

Managing Risk: Two Sides of the Same Business

Perhaps the single most significant difference between entrepreneurs and managers. As we mentioned above, part of what sets entrepreneurs apart is their willingness to take a chance. On themselves, their observations, and their vision. Many entrepreneurs have risen to the top thanks to their extraordinary business acumen. Often, this insight came from being able to spot the unmet needs through personal experience. And the risk is rewarded with a steep rise to the top of the business world. Overall, we can say that entrepreneurs pursue high risk, high reward opportunities.

Meanwhile, managers do not share in the risk taking. They work hard to minimize uncertainty in the organization itself. Moreover, their first responsibility is to amplify performance and protect assets. So a manager would typically oversee their departments or teams and maximise performance. It’s not an easy task. A mequilibrium report revealed that 36% of managers report feeling burnt out. Further, a Forbes article revealed that employee mental health is impacted greatly by managers. It’s a lot to juggle to meet some KPIs. And that juggling is part of the difference between entrepreneurs and managers.

When we consider the difference between an entrepreneur and a manager, we rarely think of failure. We’ve discussed the risks. Now let’s look at failures. An entrepreneur shoulders the largest burden of failure in a business. Ultimately, they lead the company with their foresight and vision. And just as the success of an organization is attributed to them, so is the failure. Conversely, a manager does not take accountability for a business failing. Think about it. If a friend or family who managed a company division lost their job because the company shut down- would you think they failed? Or would you assign the blame to the company and its leader? This again highlights the difference between an entrepreneur’s and a manager’s relationship with risk and loss.

Research

However, before diving into the risk and the fray of work comes an important feature: research. Entrepreneurs engage in market research, with the goal of spotting opportunities. This helps them solidify their hunch and assess risks before diving in. Meanwhile, managers utilise their research skills to improve efficiency. They rely on it to make data driven decisions to help them adapt to changing markets and increase performance.

Gathering vs Distributing Resources

Another difference between entrepreneurs and managers lies in their resource interactions. In line with the previous point, it falls to the entrepreneur to gather the initial funding. This can come from themselves, banks, investors, or partners. Their charisma, networking and pitching skills are key to attracting funding. This approach carries on to established businesses too. Entrepreneurs view cash flow as a tool to fund growth and expansion. Those with foresight keep backup plans to support innovation and further development.

Conversely, managers are in charge of allocating resources. A talented manager will be adept at recognizing how the company’s resources should be distributed. They have a more detailed insight into the organization’s talents, projects and daily workload. Thus, they are best positioned to distribute budgets, staff, and tools effectively. This shows up in their approach to the company’s cash flow, too. Managers work to optimize the business’s existing cash flow. They are expected to account for expenses and payroll while budgeting. This is a difference between entrepreneurs and managers.

What Goals Look Like Through Entrepreneur and Managerial Lenses

Another massive difference between entrepreneurs and managers are their goals. This includes the kind of workflow they prefer, to the end result. For example, entrepreneurs rely on their gut instinct to guide the business to greatness. They rely on honing their ability to read the pulse of the market, and choose well. They build a vision based on what they pick up, and go with it.

Meanwhile, managers are often learned and talented people with excellent communication and theoretical skills. They are excellent at following data, streamlining processes and prioritising. A really good one can even improve productivity to above average, using a blend of skills. They must be detail oriented, and ensure things like policy compliance.

Coming back to the difference between entrepreneurs and managers, even their success looks different. A successful entrepreneur has discovered a new vein of exponential growth. They have discovered a new way to disrupt the market. Alternatively, a successful manager is one who completes their projects without any problems. Given that they’re expected to manage a team, its productivity and morale while also meeting expectations, this is a success indeed. Overall, managers aim for steady, sustainable improvements, while entrepreneurs aim for huge leaps of success.

Thus, their rewards look different too. A triumphant entrepreneur is rewarded with strong profits and recognition. Meanwhile, a manager can expect a better fixed salary and benefits.

The Freedom in Leadership vs Enforcement

When we think of professional freedom, we slowly recognize that there is a significant difference between entrepreneurs and managers. An entrepreneur, by their very nature, is somebody who boasts a strong freedom of purpose. It is evident in their professional role as founders of enterprise. Besides, they also have considerable freedom in managing their time, money and authority. On the other hand, managers have the same, but within limits. They do have some measure of control over company finances but within the larger framework of budgets. They do have decision making power, but it is limited to their domain and team. An entrepreneur’s growth is unchecked, with the sky being the limit. However, a manager cannot ever surpass the company head in authority or planning. That being said, they have a considerable impact on their own teams, departments and budgets.

Why LUBM Prepares Both

Now, this is something we’re proud of. Graduates walk away equipped to thrive as managers or business owners. However, some skill overlaps between the two make MBAs universally acknowledged. Regardless of the difference between entrepreneurs and managers. Both roles require leadership, communication, and problem solving skills. For future entrepreneurs, the learning and growth potential is focused on spotting new opportunities and innovating. For future managers, the focus lies in maximising resource use, team leadership and time management. Yet, the emphasis still differs: vision for entrepreneurs and execution for managers. Thus, the MBAs we offer teach students both. It creates professionals who thrive overall; in startups or established corporate settings.

Remember that New York Post article we mentioned before? Now it becomes even more relevant. It listed a number of factors that motivated people to become entrepreneurs, rather than employees. And a key factor was: flexibility.

• LUBM’s flexible MBA allows learners to retain their jobs/ commitments while studying.
• Moreover, its affordable programs teach risk analysis and process optimization.
• Additionally, convenient 100% online delivery lets you apply theory in real time, at work.

Choosing Your Path

Before you consign yourself to the role of entrepreneur or manager, remember this. You can always have both. However, you can decide which is more appealing to you with a simple question. Do you prefer creating something new or optimizing something that exists?

Furthermore, consider which mindset energizes and motivates you daily. The difference between an entrepreneur and a manager shapes career decisions. But they don’t have to be your final choice. Explore LUBM’s programs to sharpen your unique leadership profile.