Are you wondering what is the difference between entrepreneur and intrapreneur is? Keep reading to fully understand these two business terms, find out the major differences between the two, and allow this information to help you decide if you are interested in becoming either an entrepreneur or an intrapreneur.
- What is an Entrepreneur?
- What is an Intrapreneur?
- 10 Key Differences Between an Entrepreneur and an Intrapreneur
What is an Entrepreneur?
An entrepreneur is an individual who comes up with the core concept of a business and brings that business to market. This means they do everything from generating the initial idea, creating a business plan, securing capital, and making all decisions related to the business.
They will reap the financial rewards if the business takes off and becomes profitable, however, they also are the one who is taking all the risk on an unproven venture.
What is an Intrapreneur?
An intrapreneur is similar to an entrepreneur as they have a leadership role and come up with new and innovative ideas for business.
However, one of the main differences is they are employed by a company and their ideas and work are for payment from that company (hourly, salary, contracted pay).
They do not take any risk if their ideas are implemented, but they also do not have the possibility of the same financial rewards if their idea turns into a successful business.
10 Key Differences Between an Entrepreneur and an Intrapreneur
There are many differences between intrapreneurs and entrepreneurs, so we are going to break down some key differences in an easy to grasp list.
1. Their Main Objective
One of the biggest differences between these two groups of people is the main objective by which they work and come up with ideas.
An entrepreneur is all about creating a brand-new business and bringing it to market. They are either attempting to come up with a brand-new idea or an idea that has a new twist, something different that will make their business stand out and apart from all the others.
An intrapreneur already works for a company and therefore does not have the main objective of bringing a whole new business to market – no, they are trying to improve the business they already work in.
There are several ways new ideas can do this including generating additional revenue, making a business that is primarily known for one thing have a catalog of different items and categories they are known for, or even bringing a whole new generation of consumers to re-look at this business after coming up with a new innovative and fresh idea that will appeal to a whole different demographic.
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2. Their Primary Motivation
An entrepreneur is someone who is starting their own business and going everything from coming up with an idea, figuring out every detail on how to make the idea come to life, and watching this idea grow as a business.
They are an individual who is not working for anyone else. Their primary motivation maybe themselves. They do not want to work for anyone else, and they want to have greater say in how they make their money.
They get to have more of a choice in how their income is made by deciding what type of business to create and run. Besides the lure of independence, they are also motivated by innovation and financial gain for themselves.
An intrapreneurs primary motivation does not have to be related to their own financial interests at all as they do not work for themselves.
An intrapreneur is all about the company they work for – ensuring that the ideas they come up with and have a part in implementing are successful and will provide more profit and revenue for the company that employs them.
This will help secure their job and place at the company. They also may be involved in how the company operates and runs the day-to-day operations, not just coming up with new ideas for products or new divisions of the company.
3. Their Associated Risk
The amount of risk an entrepreneur takes is one of the biggest differences. Every risk for every decision is on the shoulders of the entrepreneur. On the other hand, an intrapreneur has little to no risk.
The only risk they have is the same in any other job, if they do not perform they could get poor raises and other financial compensation and could even lose their job. Their position allows the majority of the risk to be on the company, not themselves.
So what types of risk are we actually talking about – what risk does an entrepreneur have? Here is a short list to think about:
- Economic Risks – This is one of the biggest and what most people think about when thinking about risks entrepreneurs take. If you are an entrepreneur you are responsible for coming up with or raising the capital needed to bring your business to market and continue to run it. There are a lot of expenses related to business from product creative, fulfillment, brick and mortar locations, marketing, insurance, employee salaries, and health insurance just to name a few. Everything is the entrepreneurs’ responsibility.
- Compliance Risk – There are countless regulations and laws that must be followed regardless of the type of business. It is the owners’ responsibility to know them, understand them and follow them.
- Reputation Risk – When you run your own business you are putting your reputation on the line. Your reputation will come into play for every decision you make. This is of course true for your overall business model and the products you produce or sell. However, your reputation can be damaged in other ways like how you conduct yourself in public or on social media, the type of people you hire, the decisions you make, and how you respond to any type of negative publicity.
- The Comfort Versus Competition Risk – There have been many companies that were once highly successful, but they did not change with the times, or they just assumed they would always be on top of the business world. Other companies and entrepreneurs are always waiting in the wings trying to find a way to take your customers away. If you come too complacent about your and your companies success, it is highly probable that you will not remain successful.
- The Mental and Emotional Risk – Most people who create their own businesses look at them as their babies. They put everything they had into creating them. With that being said you may feel a lot more emotionally drained if something were to happen to negatively affect your business. I am sure you have known people or heard stories of people who mortgaged their home or put every last dollar into a business trying to save it. Yes, that is part of the financial risk, but it is more than that, and it can give you overall negative feelings that affect your day-to-day health.
4. The Rewards
Just like the entrepreneurs take all the risk, their reward potential is so much greater. This is not to say that an intrapreneur cannot reap big rewards, it just is not something you can necessarily plan for or count on.
However, an intrapreneur may get a huge raise, stock options, or lucrative bonuses. Of course, the type of work and innovation that they bring to a job today could later be put on a resume to find a much higher paying position.
Now the entrepreneur does have a ton of risk, but if their company becomes successful their own rewards could be through the roof. What is a very success depends on the person. One entrepreneur may just feel successful by replacing a previous job’s income with income from their own business.
Others look at financial success as being able to pay themselves hundreds of thousands to millions a year.
Some companies are bought out by other companies and can but sold for a few hundred thousand up to prices in the hundreds of millions or even billions in some rare cases. That kind of financial success is not even a possibility for an intrapreneur.
Of course, there are other types of success and rewards besides financial. Entrepreneurs are independent, they make all the decisions and their only boss is their customers. They have the personal satisfaction of creating a successful business on their own.
There are many types of rewards that an entrepreneur may be shooting for and may achieve.
5. Who Do You Work For?
Finally, the last major difference is who you work for. An entrepreneur works for themselves, primarily. An argument can be made that they also work for their customer base or the general market – but at the end of the day, they are their own boss.
An intrapreneur works for a company and has a boss to answer to. That means they have a set of guidelines and goals they must adhere to and meet that someone other than themselves has set.
We have touched upon the five major differences between intrapreneurs and entrepreneurs – now we should briefly mention some other differences. These are smaller in nature, but still important to consider.
6. The Approach
The approach is how you look at things, how you approach your everyday job, and what drives your decision-making.
Entrepreneurs have an intuitive approach which means they are using their intuition to read the situation, to see patterns, and use these patterns to make decisions and find solutions quickly and efficiently.
Intrapreneurs tend to use more of a restorative approach, one where the focus of their decision-making comes from repairing any potential harm being done or done in the past.
This makes more sense as they have a long history of a specific brand and whereas they are also trying to come up with new ideas and to be innovative, they are also brand managers.
7. Personal Ambition
It is not accurate to say entrepreneurs have ambition and intrapreneurs do not. However, most entrepreneurs are highly driven by their ambition to create something new, give back to society, be innovative, or make a lot of money.
Intrapreneurs can be ambitious, but it is usually more related to their own career path or to make the company they work for becoming more successful.
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8. Personal Motivation
Again, anyone in a high-powered or high-paying position probably has a good amount of motivation.
However, an entrepreneur must be among the most motivated business people as they always have to be thinking of the business including what to do today, tomorrow, 6 months out, 5 months out, etc.
They have to remain motivated regardless of how their business is going, what is going on in their personal life or the world in general.
There are more time restraints on an intrapreneur than on an entrepreneur. Sure, time-restraints could be placed on becoming successful in a specific amount of time, meeting seasonal demands, or meeting personal goals – but these are self-placed.
Intrapreneurs have actually time-restraints put on them by their employers on how long to come up with a good idea, how long implementation should take, and how long they have to turn a profit.
If you hate being supervised, being an entrepreneur is the way to go. You are your own boss. You make all the decisions. When you are an intrapreneur you have at least one direct supervisor.
Depending on the size of your company, there may be many other supervisors above that person, so you need to answer too many people.
If you work for a large company traded on the stock market, your innovation path and decision-making may also be controlled by how the shareholders may feel about what direction you are taking the company.
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As you can see there are many differences between an entrepreneur and an intrapreneur. Although they do have some similar mindsets and job functions like the ability to create new things and be innovative, having leadership abilities, and striving for the most successful outcome in any venture, there are so many differences in how they look at these tasks and how they go about accomplishing their goals.
If you are thinking about where to take your career going forward, understanding the similarities and differences between entrepreneurs and intrapreneurs is an important step to deciding what you want to do and what would best fit your own personality.