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Being a business owner can sometimes feel like a roller coaster. The highest of highs and at times the lowest of lows.
So what does it mean to be a business owner? And is there a difference between being a business owner and an entrepreneur?
You can find out and take the plunge below…
Definition: A business owner is the legal proprietor of a business. An individual or group that owns the assets of a firm and profits from them.
What Does Business Owner Mean?
The owner can be the same person who directs the business and controls its day-to-day processes or he can choose to have a Manager for that purpose, or even name a Board of Directors to do it. The corporate governance applied in a particular firm largely depends on its size and operational complexity.
In spite of the company’s size, the owner has the ultimate control on its company and therefore decides whether to delegate or not certain key executive functions on qualified professionals. The business owner can earn a monthly wage but he is not an employee.
In contrast, any other person working at the company is an employee no matter his hierarchy within the organizational structure. In addition, the business owner has the right to take the net profit obtained at the end of every fiscal year or reinvest it in the company.
John Hatish is a 50 year-old man who decided to invest his money in a new business. He wanted to provide cleaning services to office buildings. John Hatish created a new firm, employed ten young individuals and purchased the initial inventory as well as some cleaning tools and equipment.
But Mr. Hatish has a full-time job as an engineer so he has no time to supervise the employees or to meet with potential clients. He remained as the business owner but hired a full-time manager. This manager meets with Mr. Hatish two hours each Saturday to guarantee proper accountability and to discuss together about new opportunities and ideas concerning relevant business issues.
At the end of the first year, Mr. Hatish decided to reinvest all the resulting profit to upgrade the company’s equipment. At the end of the second year of operations he took out 50% of the profit as income and reinvested the remaining 50% to keep funding the company’s growth.
Academically, Merriam-Webster defines owner through the lens of possession, while defining entrepreneur through the lens of the activities involved in owning, managing and running a business.
Practically, through my experience of owning or co-owning four businesses and coaching dozens of others, I see “business owner” as a job title and “entrepreneur” as a mindset.
A “business owner” might buy into or start a business because “it was a great opportunity” or “it was the natural progression” or “it’s the only thing I enjoy doing or know how to do.” I often hear, “I didn’t want to work for somebody else,” or, “I was tired of making somebody else rich,” and only occasionally, “I couldn’t let this business die.”
An “entrepreneur,” on the other hand, will often say things like, “I saw a better way of doing things,” or, “I saw a gap or a need in the industry (or community),” or, “I wanted to make an impact or leave a legacy.”
Functionally, I see business owners and entrepreneurs go about their businesses with different approaches as well.
Many business owners focus on putting out fires, and in that sense tend to be more reactive. They envision a world where employees would do their jobs, customers would pay on time, and software or equipment would function as it was designed.
True entrepreneurs question the status quo and envision a world where common industry or customer pain points no longer exist. The founders of Airbnb, for example, realized that a popular tech conference coming to San Francisco warned conference-goers right on the conference website that area hotel rooms were booked so to make alternate arrangements. Though they faced many challenges before making it big, their business was born out of noticing a gap or a need, not just a way to make money.
Finally, many business owners make decisions unintentionally that lead to themselves “buying a full-time job.” For example, naming the business after themselves. “Simpson Electric Services” holds little to no brand equity or value for a potential buyer with Thomas for a last name. They may also build their business through their own skills. Highly skilled personal trainers who try to scale their business by hiring someone else to train their clients often face a rude awakening when their clients refuse to train with someone else, or complain about a discrepancy in the quality of service or care. The glass ceiling firmly atop their heads results in trading time for money as a business model.
Entrepreneurs, on the other hand, often have an exit strategy built into their business plan before they’ve even made their first sale. They might choose a more neutral or operational name that anyone could call their own, and they might hire more skilled employees for certain aspects of the service delivery so that they can more easily escape the operational aspects of the company and work “on the business” instead of working “in the business”.
These structural decisions often stem from a longer-term view of business, and the results they can engender can end up being quite profound. Business owners often trade “time for money” as mentioned, which we can term as “operational revenue.” The personal trainer in the aforementioned example only gets paid when she is training a client. If she were to create her own series of community races however, she might one day get paid while on vacation while her team executes the race.
Related: 5 Wrong Reasons to Become an Entrepreneur
True entrepreneurs, through their mindset of iterating solutions to common problems, often build businesses that can one day run without them. That is, the business can be run by a team, through effective systems such as automated recurring billing and timely deliveries or regular upgrades. In effect, entrepreneurs escape the trap of “time for money” and create residual income streams we can term as “entrepreneurial revenue.”
Ultimately, there is nothing wrong with business owners who effectively have a full-time job they will work until they retire and close their business (if that is the case). Compare just a sample, however, of why 20 entrepreneurs started their businesses, and one could make the argument that business owners create a job while entrepreneurs create a solution, impact or even social movement.
Business titles for small business owners should be consistent with the company’s goals and objectives, but they should also feel personal. You’re the owner of your small business, but you also wear many other hats—and your business title should reflect your multifaceted role.
We’ve put together some simple steps to follow when deciding what small business owner title is right for you. Then, you can take a look at our list of both common and creative titles to see if one you like is on that list. And if not, you’re the boss—create your own!
Small Business Owner Titles to Consider
Now that you know what steps to take as you choose your job title as a small business owner, let’s take a look at some job title potential options. You have so many choices when it comes to job titles for small business owners, and we’d be hard pressed to list them all. But after surveying small business owners in a variety of industries, we were able to gather some of the most common business owner titles.
See if a few of these titles suit your style, and then take a practice run at a networking event by introducing yourself using those titles. You’ll quickly know which ones feel right and which ones simply aren’t a fit.
Chief executive officer, or CEO, is a common title in the business world and will leave no one in doubt that you’re in charge of your company. If you want to convey that your company is well-established or has a large team of employees, CEO might be the right title for you.
Conversely, if you’re a solopreneur, the term CEO might give off a stuffy air that doesn’t accurately describe your business, or your role within it.
Many people consider “president” to be interchangeable with CEO. Again, this title conveys authority, so it’s an option worth considering if your goal is to give your business the gravitas of a more established firm. When choosing between president and CEO, consider your legal business entity, as well as how you want to structure the titles of additional hires as your company grows.
For small businesses owners who haven’t filed organizational documents as a partnership or corporation, the title of owner is a straightforward way to denote who holds financial ownership of your company. Owner has less gravitas than either president or CEO, but this might work well if you’re the operator of a very small business, such as an LLC or sole proprietorship, with few to no employees.
If you feel that your role in your small business fits the definition of owner, but that term doesn’t feel quite right, there’s a second option. Proprietor is an older term used to describe the owner of a small business, and is particularly common within small, main-street style retail businesses.
In recent years, the title founder has gained popularity within businesses—particularly in the tech industry—that start small and very hands-on, but have fast growth trajectories. Calling yourself a founder conveys to your earliest employees that you intend to take a bootstrapping approach to your growth and be highly involved in the day-to-day work—all of which can improve the camaraderie and teamwork between you and your staff.
Keep in mind that a founder is defined as the person who originated or started the business, so it’s not an appropriate fit if you purchased an existing business or bought shares in an established company.
If you’re looking for something a little more official than owner but you don’t feel up to the level of CEO, you might consider the title of principal. Although it may conjure memories of middle school detention, principal is a common small business owner title, particularly for owners of small agencies or consulting businesses.
7. X Director or Director of X
Do you prefer a business position title that gives you the authority of ownership but is more descriptive of the daily role you play within your business? Consider a title that includes the word “director,” such as:
- Managing director
- Technical director
- Creative director
- Director of operations
8. Managing Member or Managing Partner
If you want to convey that you’re the one making your company’s major decisions—and not just taking a backseat to your business operations—you can use the terms “managing member” or “managing partner.” Both of these terms imply that you have the status of an owner but also clue people in on your actual responsibilities. For some owners, however, these terms might sound too much like legalese.
If you’re running the day-to-day operations of your small business and that requires a lot of business management work, you might choose to give yourself the title of administrator. This title is descriptive of your work while still stating that you have authority over the business.
If you don’t consider yourself CEO material but want the status of a business owner with a C-level title, consider creating your own. You can choose to be the chief of anything within your company. Here are some of the creative examples we’ve seen:
- Chief accountant
- Chief plumber
- Chief executive philosopher
- Chief disrupter
11. Non-Prestigious, Descriptive Titles
If none of these conventional business position titles feel right for your personality or the role you play within your company, you can get a little creative. Instead of choosing an established title, create your own. Feel free to choose a title that downplays the prestige of your role as business owner, if that feels uncomfortable to you, while also being descriptive of what you do.
This strategy is particularly useful if creating a team-oriented culture is important to how your business runs. Choosing a business title that removes the sense of hierarchy from your ranks will help everyone focus on doing whatever it takes to get the job done, without getting stopped up by intimidation or fear.
12. Silly or Creative Titles
If you work in a creative industry, you can take a lot of license with your small business owner title. You might craft something that’s even a little silly. As long as you think it fits what you do and the personality of your business, the sky’s the limit.