I have a business that provides consulting services to other local and international companies. At the same time, I have a couple of products (subsidiaries) that serve the public. So, what am I? An entrepreneur or a businessman?
You may be in a similar situation. A lot of people don’t know the difference between the two. But don’t worry. By the end of this article, you will understand the difference, and you will be in an excellent position to choose what you are.
The Banana Example
Let me put it into simple words. If you buy a banana for $0.3 and sell it for $0.8, then you have made a trade, and that makes you a businessman.
But, if you buy a banana for $0.3, make a banana juice of it, package it and sell it for $0.8 or higher then, you added innovation to your work, and that makes you an entrepreneur.
Clear? No? It’s okay. Follow with me, and I will give you a couple more examples — this time from my life.
What makes me both an Entrepreneur and a Businessman?
I own a technology and media company. I provide the same services that millions of other people and freelancers offer around the globe — software development, and video production services. But, I have a different market and maybe a different pricing strategy.
But this still makes me a businessman. It’s still considered a single trade, I have a cost, and I add profit margins on top of it. That gives me the price of my services. I could even add innovation to it — perhaps by contracting freelancers instead of hiring employees, but my service will remain the same. Therefore, it does not make me an entrepreneur.
On the other hand, I have three products. And I believe all three make me an entrepreneur. I will tell you how.
Product 1: I have a payment solution, WasalPay. WasalPay helps people purchase mobile top-up online. Without WasalPay, people could buy scratch cards from local stores. And I could sell scratch cards by becoming just another reseller. But, again, that would make me yet another businessman.
I added innovation to it. I made it possible for the end-user to purchase a top-up using any handheld device. So, I created another product from an already existing product.
Product 2: I also own a co-working space, CoWorthy. When I left my job and started a small business, I knew I wouldn’t be able to pay for all my expenses. So, I made a co-working space. This way, I make it easier for other small businesses to start their companies — focus on their business and leave all the operations to us.
You might have done similar or even better things that could describe you as an entrepreneur, a businessman or both. I hope now you know the difference between the two.