Owning a business isn’t for everyone. It’s a high-stakes, high-pressure, long-hours profession regardless of the business. It’s also hard on personal relationships. The divorce rate for business owners is higher than the general population, and even more so among dual-entrepreneurial marriages.

Business owners are also more likely to suffer health issues brought on by the stress and long hours. Heart disease, weight gain, and restless nights all hitch a ride on their backs. And yet the number of small businesses continues to grow. In fact, more applications were filed for new businesses in 2021 than any in other year on record.

Now for the good news. Owning a business can be a smokin’ job! It scratches the competitive itch and feeds the adrenaline rush that drives so many entrepreneurs.

This helps explain why 10% of the U.S. population owns a business. 2022 set a record for the number of new businesses that were actually started in the U.S. at 5.4 million—in spite of the economic headwinds these new owners faced with inflation, continued supply chain issues, and the challenges of finding workers to staff their companies.

But owning a business is very different from leading one and, unfortunately, many business owners struggle with this transition. Some of them never make it, which might help explain why nearly 90% of all businesses (depending on whose data you read) never scale above $1M in annual revenue. These owners don’t need to grow larger because there are fewer people to lead. In my opinion, it also helps explain the high failure rate of new businesses and why so many owners get burned out and choose to leave—they’ve never learned to lead a business.

So, what exactly is the difference between owning a business and leading one? To start with, you don’t have to be a business owner to be a business leader. Companies large and small have outstanding leaders who aren’t owners. Conversely, you don’t have to be a leader to own a business. No doubt we can all cite examples of successful businesses run by people we would never want to follow.

Fundamentally, owning a business simply means that you are in control of the operational and financial aspects of an entity that produces and sells goods or services for profit. It can be a one-person operation doing ecommerce, freelance writing, offering personal services, or working in the trades. According to the U.S. Census Bureau, this represents almost 75% of small businesses.

If you employ people and aspire to grow, this is where leading a business enters the picture. If you’re in this group, it’s important to understand that the skills needed to launch and run a smaller company aren’t the same as those needed for a larger one.

The rub comes in when an owner wants to grow a larger company or is currently running a larger one that demands leadership skills and all they have to offer are ownership skills. The owner must decide whether to develop the skills needed to lead a larger organization or to stay where they are. Neither is wrong, it’s simply a choice.

In Part II of this series, I’ll go deeper into the difference between owning and leading a business and identify the transitions I’ll be discussing in this series.