What is the difference between sole proprietor, entrepreneur and small business owner?

The pandemic has spurred the creation of small businesses. People who used to think only about their own business have taken the leap – and continue to do so. An Intuit survey of 8,000 US workers found that 83% of those surveyed said COVID-19 has accelerated their plans. According to a 2021 New Business Insights report, Intuit predicts that 17 million new small businesses will be created in 2022. The US Census Bureau is conferring, showing that the number of new business applications will increase in 2022 compared to the previous month.

So, what is the difference between sole proprietor, entrepreneur, and small business owner? And why does it even matter? Here we’ll take a look at the various names, the differences between them, and some things to be aware of.

Small business. We tend to think of small businesses as family-owned stores, like the local coffee shop or grocery boutique—something with a window display. Small businesses usually already exist in the market. The new owners are just adding their creative flair. This is different from sole proprietors and entrepreneurs, who are usually the founders or creators of new or innovative products or services.

Most people who start a small business intend to hire employees to provide personal customer service in a specific location. Owning a small business is part of the quintessential American dream. In fact, small businesses make up 99.9% of all US businesses and create 1.5 million jobs annually.

The main motivation for hanging your own pebbles is that you are your own boss. But you need to do your homework. A small business, more than a sole proprietorship or entrepreneurship, requires a solid business plan and sufficient capital. Not only that, but you’ll also want to make sure your business is in an area with a large enough talent pool to hire from.

NerdWallet has reported 10 businesses with the highest growth trajectory starting in 2022. The list included food trucks, car washes, personal training and yoga.

Individual entrepreneur. Sole proprietorship is a one-man show. They are both the founder and creator, as well as the sole person responsible for providing products and services. Sole proprietors may hire third-party contractors or freelancers, but in the end, the burden of responsibility falls on them.

For the most part, sole proprietors aren’t focused on empire building (think Steve Jobs, Elon Musk, and Jeff Bezos). Instead, they are building a business that they can manage on their own terms. Sole proprietors usually have one focus or two related focuses. Their focus is on building a loyal customer base that can be managed by one person with some outside help.

The benefits of being a sole proprietor include low start-up and overhead costs, no employee headaches, and a manageable workload. But there is a limit to what one person can do. One of the best things you can do as a sole trader is to diversify your income streams by creating courses or writing e-books. This allows you to scale your business and still operate independently.

Looking for ideas? Some of the sole proprietorship business ideas include graphic designer, photographer, event planner, web designer, content creator, and freelance writer. With each of them, you have the ability to scale by adding products. You can also scale by starting a how-to YouTube channel.

Entrepreneur. This is a man who wants to create an empire. This empire doesn’t have to be Amazon or Apple. It can be much less – or more! But entrepreneurs are determined to scale. Their goal is to hire a team of people to take their idea to the next level.

Entrepreneurs are founders with an idea that is developed with the help of a team of experts—only often all the success is attributed to the founder. It’s because they have the guts to make it happen. Entrepreneurship can involve incredible financial risk. Often these people will be looking for venture capital or high-risk funding. They will use their houses. Real entrepreneurs don’t believe in failure.

Here are some examples of entrepreneurship. Sarah Blakerley, founder of Spanx. Oprah Winfrey, TV presenter. Steve Jobs, Apple. Jeff Bezos, Amazon. You can find examples of entrepreneurs in every industry.

Many entrepreneurs start out as sole proprietors but later decide to scale. If you are a web developer, you may want to go into analytics or social media. You can add a content department and a graphics department. You are limited by your imagination, risk tolerance and business goals.

Whatever you call yourself, at the end of the day, you are a business owner. You decide, set your own rules, and your success depends on you. Nothing says that you must conform to the predefined boundaries of these definitions. In fact, the very fact that you are your own boss means that you are willing to take risks. Move out of bounds when you want, or back out for safety, depending on the economy. As a business owner, flexibility is paramount.

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