Some entrepreneurs believe they can magically transform themselves into an investor simply because they started a business. This is far from the truth. In fact, this is one mistake that can destroy a business. That is because most entrepreneurs do not encompass the skill set to be the investor or the CEO behind an organization. And in most cases, big-time corporate CEO’s are not entrepreneurs.
Of course, there are successful professionals out there who can perform both roles at the same time very well. These are generally people who grew up in the corporate world and have real experience in the business world prior to starting their own business.
So, what is the real difference between an entrepreneur and an investor? In this article, we will discuss the main differences so if this is something that you would like to find out about then, make sure you keep reading for more information.
What is an Investor?
An investor is a person who puts their own money, out of their own pocket, into different things such as businesses both big and small, properties, foreign exchanges and more to earn a rate of return for financial goals.
When an investor invests money into something, they will use it for a long-term gain to make profits when it comes to buying and selling what they have invested in.
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What is an Entrepreneur?
An entrepreneur is a person who comes up with business ideas that are innovative and take risks in order to get businesses up and running to make a profit out of it. This is the person who has the vision and sees an opportunity in the market place.
They make a plan and roll out the business. In the beginning, they generally manage the business and receive all the profits.
More precisely, entrepreneurs build products and organizations and advertise (sell) those products to people who will pay for them.
There are a lot of risks taken when it comes to being an entrepreneur because if the business or business idea doesn’t do well then, the entrepreneur will lose out on money. Although it is a risk, it is an important part of economic growth because they can bring some new and exciting ideas to the market.
Different Business Ideas
Although investors and entrepreneurs both focus on businesses and making profits, they have different views on business ideas. For example, an investor will invest their money in a company that is already up and running to make a profit, whereas an entrepreneur will come up with new business ideas that they can use to set up a business to make a profit.
Invest in Different Ways
The next difference between investors and entrepreneurs is that they invest in things in different ways. For example, an investor will invest their money in a business to make a profit and an entrepreneur will invest time and new ideas to get a business up and running in order to make a profit. Either way, they are both as important as each other because if a business didn’t have money then, no profits would be made and, if a new idea wasn’t thought of then, there would also be no profit made as the business ideas would not exist.
Focus on Different Parts of a Business
Another one of the differences between investors and entrepreneurs is that they both focus on different parts of a business. This is because an investor will focus on the financing part of the business whereas the entrepreneurs will focus on different parts of the business. This includes everything from coming up with ideas, speaking to customers, doing marketing, and more.
Keep This Article In Mind to Help You Understand the Differences
Overall, there are some differences between investors and entrepreneurs and in this article, we discussed what makes them different. If you found this article useful then, make sure you keep it in mind and use it as a guide to remind you and help you understand the differences between investors and entrepreneurs.
THIS ARTICLE WAS WRITTEN BY SOPHIA ANDERSON AND ORIGINALLY APPEARED ON YOUR COFFEE BREAK.