Entrepreneur vs freelance consultant, startup vs small business,

Two readers, Sachin Garg and Prashant Bairy, respectively, asked questions about:

1. the difference between Entrepreneurs and freelance consultants (this blog refered to the "subtle difference" between the two), and
2. the difference between startups and small businesses

While these may seem like rather inconsequential semantic differences, i thought it would be interesting to dig a little deeper, figure out if there indeed are differences between the terms, and to share my views:

1. Entrepreneurs and freelance consultants
A few good links to understand the etymological meaning difference between the two terms are:

• Wikipedia:http://en.wikipedia.org/wiki/Freelancer and http://en.wikipedia.org/wiki/Entrepreneur
• Dictionary.com - http://dictionary.reference.com/browse/freelancer and http://dictionary.reference.com/browse/entrepreneur
• Another interesting link, http://en.wikipedia.org/wiki/Self-employment, explains the difference between self-employment (a super-set of freelancing) and business ownership (a qualifier for entrepreneurship).

Now, the next question could be, if the difference is so great (freelance consultant provides his individual skill for a fee and is therefore like an employee "soldier of fortune", while an entrepreneur is trying to build an enterprise, with considerable risk, initiative and responsibility), then why did I say the difference is "subtle"? To this, my answer would be, that many entrepreneurial ventures, especially bootstrapped ones, begin as freelance consultancy operations... i.e. the entrepreneur begins as a freelancer, but slowly expands, adds people, processes and capabilities beyond his direct individual output, to create an enterprise. Since in real life, a freelancer may gradually morph into an entrepreneur (depending on his vision, preferences, capabilities, opportunities etc), I suggest that the difference could often be subtle. You may find freelancers who call themselves entrepreneurs, and that is not wrong, if indeed they are on that path... but you would probably never find an entrepreneur, who calls himself a freelancer.

2. Startups and small businesses Have attempted to explain through a diagram:


















Thanks for your questions, hope this is useful to other readers as well!