Entrepreneur or Small Business Owner: Which One Are You?
Source: Business News Daily | Repost QBScott 5/20/2021 –
A new study finds that the difference between being an entrepreneur and a business owner lies in your company’s legal status.
According to a study in the Quarterly Journal of Economics, a business’s legal status is what separates entrepreneurs from other business owners.
Entrepreneurs tend to be incorporated, while small business owners are not.
Incorporated business owners reported an increase of $6,600 in median annual earnings compared to their previous salaries when they became entrepreneurs, according to study findings.
Just because you run your own business doesn’t mean you are an entrepreneur.
A study published in the Quarterly Journal of Economics revealed a key difference of being self-employed and an entrepreneur. The researchers found that a business’s legal status – whether it is incorporated or unincorporated – is what separates entrepreneurs from other business owners.
Defining entrepreneurs and small business owners
To understand the differences between entrepreneurs and small business owners, it’s important to first know what the terms themselves mean. According to the Oxford Dictionary, an entrepreneur is “a person who organizes and operates a business or businesses, taking on greater than normal financial risks to do so.” A business owner is defined as “an individual or entity who owns a business entity in an attempt to profit from the successful operation of the company.”
Author: Scott Meister, CPA
I help small businesses, accountants, bookkeepers, office managers, and business owners with their accounting needs. I’ve used QuickBooks since 2002 and train folks on how to use it efficiently. I create high-quality video training tutorials for QuickBooks and post them on QBScott.com.
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