If you are reading this article, then there are chances that you are an entrepreneur seeking to expand your business or an employee seeking self-employment.
The desire to be self-employed, leading to various types of entrepreneurship, continues to revolutionize the workforce and workspace today. Nowadays, people prefer entrepreneurship to the conventional 9-5 because of its flexibility, even though you end up working twice as much.
Each type of entrepreneurship has its own set of goals, desires, and metrics of success. Some forms of entrepreneurship aspire for quick development or growth from an existing company model. Others forms create earnings to maintain the entrepreneur’s lifestyle with no aspirations for expansion.
Knowing the many types of entrepreneurship and whether one(s) correspond with your business goals will help you make better educated decisions regarding your company’s future.
This article will cover entrepreneurship, the different types, and other nuances within the entrepreneurial path. Therefore, if you are interested in such information, keep reading to learn more.
What is entrepreneurship?
Entrepreneurship as we have come to know goes back 20,000 years according to many records. And like other things with just lofty history, the definition of the term has been debated countless times. However, In context or summary of modern day entrepreneurship, when you decide and are willing to start a new business, bearing its risks to make a profit, you have engaged in entrepreneurship or at least one of the types of entrepreneurship.
Essentially, the route to self-employment is shrouded in uncertainty and powered by the entrepreneur’s drive, ingenuity, and optimism. And while it opens the part to work flexibility and more profit, its uncertainty and sheer workload makes it a dreaded yet highly profiting venture.
Types of entrepreneurship
We can only have the various types of entrepreneurship based on the types of entrepreneurs there are. Therefore, here are the five types of entrepreneurship you should know about – to help you identify where you are or choose where you want to be.
The startup as a type of entrepreneurship depends on and works with raw talent. Essentially, it is relatively demanding and often requires extensive investment capital to drive the project. In addition, startups function by attracting investors who know how to support original thinkers. As a result, entrepreneurs in this niche focus on scalable businesses and experimental models, causing them to be more interested in hiring the most intelligent people as employees for their unique talent. An excellent example is the beginning of Uber and how it ultimately expanded and took the taxi business to a different level.
Scalable startup entrepreneurs have great dreams, focused on creative ideas that will allow them to grow their firm and make as much profit as possible as rapidly as feasible.
Most scalable startup founders:
- Identify a market gap and concentrate on filling it.
- Attempt to build a scalable firm that is poised to grow and service a broader market.
- Have strong margins and a lean and agile team ready to pivot as the firm expands.
With a high profit motive, scalable startup entrepreneurs frequently seek venture funding to aid in their quick development. Scalable firms are frequently preferred by venture investors. They provide a speedy return on investment. When the emphasis is on expansion, critical performance criteria may include gross margins and customer satisfaction.
The small business
Those who run small businesses have no intention to expand and create other firms. Essentially, they are subsistence businesses that make a small descent living and usually made up of family members and friends. Typical examples of small businesses are local restaurants, grocery shops, hairdressers, dry cleaners, etc. Usually, funding for small businesses comes from small loans and contributions from family and friends.
Small business owners are focused on starting and running their own company, either on their own or with the assistance of family members. This category of types of entrepreneurs includes numerous small-business owners, as well as consultants.
Owners of small businesses:
- Attempt to earn a livelihood through their commercial operations and produce enough profit to sustain their family and way of life.
- Normally, they are not concerned with quick development and expansion.
- Instead of seeking investors, companies may decide to obtain a company loan for funding.
Small business entrepreneurship has the potential to turn into large company entrepreneurship when the firm expands swiftly, is purchased by another larger company, or a family member takes the helm and wishes to grow the company.
Big business entrepreneurship
These are types of entrepreneurship that build on and improve the products and services of their smaller counterparts. Essentially, big businesses have a predefined lifecycle. They thrive on the new and innovative products they can offer, such as adding more unique features to boost their existing products or services like incorporating technological advancement, etc.
Similarly, unlike brick-and-mortar stores, most businesses are beginning to incorporate online invoices to phase out the regular paper invoices for clients. Also, generating online paystubs makes financial documentation for employers a lot easier due to online pay stub generators. As a result, there is better accountability, making for more business expansion due to improved operational processes. Many businesses already use these business models to automate and save cost and you should too.
Some firms expand organically over time, whereas large company entrepreneurship attempts to build a huge company from an existing business model.
Entrepreneurship in large corporations:
- focuses on profit generation, allowing the company owner to maintain their lifestyle while also supporting the business’s continuous growth
- Aims to expand the existing company model, which separates it from innovative ownership, which strives to provide an entirely new idea to the market.
A huge firm entrepreneur may purchase an established company delivering new services as the consumer base of a business expands and evolves. This enables the larger corporation to satisfy new client demands.
The innovative types of entrepreneurship
This type of entrepreneurship forms the league of pacesetters for the industrial world. Essentially, entrepreneurs in this category are passionate about new ideas and inventions to convert into viable businesses.
Innovative entrepreneurs start firms with the goal of bringing entirely new items or ideas to market.
- Innovative entrepreneurs are creative problem solvers who develop new goods, services, and solutions to better the lives of their clients.
- Are frequently motivated by a global goal or vision
- Consider how their concept or product will affect society.
- Disruptors are those who can shift the business environment in their field or produce new technologies that have an impact on society.
Each type of entrepreneurship has its own set of goals, priorities, and success measurements. Knowing the various forms of entrepreneurship will allow you to tailor your business strategy and activities properly.
The social type of entrepreneurship
They are primarily solution-oriented businesses whose primary focus is solving social problems and less profit-making. Generally, most nonprofit organizations fit into this entrepreneurial category. They seek to solve the issues of society like increasing access to food, education, and other finer things of life.
Social entrepreneurs, motivated by a desire to give back to the society, attempt to provide answers to significant societal problems, which may include:
- Reducing societal inequality
- Taking an interest in environmental issues
- Economic development that is more egalitarian
Some social entrepreneurs may establish a nonprofit organization, but others pursue profitable economic enterprises that benefit the community.
Social entrepreneurs have a strong vision for the world, and their financial ambitions are based on the company’s mission, which is frequently to affect social change. As a result, a social entrepreneur’s success indicators might be highly weighted on good progress toward a problem rather than financial markers like profit production.
Hence, social entrepreneurs’ intentions differ from those of scalable startup entrepreneurs, who are interested in swiftly growing their firm.
This is where you will find the likes of Warren Buffet. Buyer entrepreneurs are basically wealthy individuals with an eye for profitable ventures. They basically identify promising businesses and look to acquire them. Because these businesses are already established, it’s less risky than building a new business from the ground up. Because, let’s face it, you can do everything right and still fail as a startup, stat shows.
Basic features of the types of entrepreneurship
Certain qualities and characteristics are essential for any business to fit into the various types of entrepreneurship. Below are some general features that most entrepreneurship types have in common.
There is nothing stable or static in entrepreneurship, which is why flexibility is a significant characteristic among the types of entrepreneurship. Thus, succeeding on this path requires openness to change irrespective of the dimension it may come.
Ability to take risks
The cliché that nothing good comes easy justifies the risk involvement of the entrepreneurial path, especially when starting a new business. As a result, every successful business owner must be prepared to undertake some financial and otherwise risks.
Essentially, ideas are the primary commodity of the entrepreneurial sphere. Therefore, every business owner must be ready to engage in several methods to develop new business ideas or improve upon already existing business ideas.
Benefits of choosing a type of entrepreneurship to belong
Although entrepreneurship is a career path that is replete with resistance and challenges, it still has advantages for those tenacious enough to stick with it. Here are some benefits of engaging in entrepreneurship and knowing exactly what type of entrepreneurship you are or want to be.
Personal and professional independence
Entrepreneurship is one career path that allows you to work on your terms, choosing what projects you want and do not want to be involved in. Also, you are at liberty to decide how you intend to pursue a task without interference or compulsion.
Diversification of income sources
In today’s world, where one income stream appears to be ineffective towards catering to people’s needs, entrepreneurship provides an avenue to earn from various sources. Essentially, you earn money according to how much effort and energy you invest.
Contribution to societal advancement
Entrepreneurship does not solely benefit the business owner. It extends to the larger society by creating job opportunities for the populace to deal with the increased unemployment situations. For example, the rise of big and small businesses mitigated the elevated unemployment in the United States, not to mention the gig economy and its workforce revolution.
The different types of entrepreneurship depend on the kinds of entrepreneurs available. Thus this is a constantly expanding topic. It means that shortly, as more skills and niches develop, we will likely have more types of entrepreneurship.
Who is an entrepreneur?
An entrepreneur is a business owner who is willing to take risks to set up a business for a profit. He might achieve this by creating something entirely new or improving upon an already existing feature.
What are businesses and their types?
A business is any organization that engages in commercial, industrial, or professional activities (buying/selling) that may be or not be for a profit. Types of business include sole proprietorship, limited liability companies, partnerships, and corporations.
What skills do entrepreneurs need?
Entrepreneurs need a set of personal and professional skills altogether regarded as entrepreneurial skills if they must succeed. They also need people skills to form alliances with other business owners and build a formidable team for a successful business.