What’s the difference between a manager and an entrepreneur? Or is there a difference at all in the first place?

Let’s put it this way. Imagine that you have extra capital, and you decide to invest in a food franchise business. Are you now an entrepreneur?

The bad news is… not really. You are an investor because you’ve just invested in a business. And if you decide to run the business yourself, then you are now a manager.

But entrepreneur? Sorry, not quite. This is because you did not add any “insight” into the business in the first place. There is no innovation, no new idea, no risk to ride. Oh sure there would be some risk involved, but these would simply be the typical risks that are inherent in doing business. Not the risks that come from trying out something totally new.

You can now probably infer that entrepreneurship involves creating a new business concept. So in this case, the person who developed the franchise package would be the entrepreneur, and not the guys who are buying into the franchise.

So is there any way that a person who is buying into a franchise can be a true entrepreneur? Well, yes. Here are a couple of possibilities:

1. You know that a particular business franchise would actually work in an area where everybody else claims that it would never work. So your insight here, your contribution if you will, is your possibly knowing something that nobody else knows about the area. So yes, starting a franchise in an area that people wouldn’t have thought of getting into makes you an entrepreneur to some degree. But just barely.

2. You tweak or adjust or change the franchise because you know that it could work even better if only you do this or that. So your insight here, your contribution if you will, is your possibly knowing something that nobody else knows about the potential of the business. The catch, of course, is that you might end up violating the terms of your franchise if you do this. Then again, you can do what Ray Krock did (with McDonald’s) and buy out the entire franchise concept so that you can make it even better.

So what you are probably concluding by now is that entrepreneurship involves insight. It involves knowing something that not everybody knows, and building a business to prove that you are right.