Types of Entrepreneurship
Entrepreneurs have a passion for developing new entrepreneurial opportunities and bringing change to the world. They always lead their enterprises and help them achieve new business heights. There are many different categories where entrepreneurs can start their business ventures. Because there are different types of businesses, there are also different types of entrepreneurship.
Therefore, to choose the right business venture, it is necessary to know all common entrepreneurship types. It also helps in being successful and reducing risks or uncertainties. In this article, we are discussing the most common types of entrepreneurship with definitions and characteristics. Before discussing the different entrepreneurship types, let us first understand entrepreneurship and its common characteristics:
What is Entrepreneurship?
Entrepreneurship refers to a process that primarily involves developing, launching, and distributing products or services to establish any business venture. It also includes various risks or uncertainties; however, an entrepreneur works to overcome them and incorporate their skills to earn profits. An entrepreneur is defined as an individual or group of people who launch and operate their own business.
In economics, entrepreneurship can be incorporated into a combination of land, labor, various natural resources and capital. It can help in getting good profits. The most common example of entrepreneurship is the beginning of a new business venture.
Characteristics of Entrepreneurship
Many people try to become entrepreneurs, but not everyone is successful. There are many essential characteristics of entrepreneurship that make a person a successful entrepreneur. Some of the common characteristics are discussed below:
Risk-Taking Ability: When it comes to starting any business venture, there is always a risk associated with it. For successful entrepreneurship, an entrepreneur must have the courage to take risks and the patience to achieve better results. Additionally, they should also have a strategy to evaluate the risks and overcome any such situation.
Innovation: Innovation is one of the important components of entrepreneurship. An entrepreneur must incorporate innovative ideas. New ideas help earn more profits related to launching new products to make operational business process changes to delivery strategies.
Clear Visionary: To be a successful entrepreneur, one must have a clear vision. This means that an entrepreneur should know various business processes, including management, production, distribution, etc.
Leadership Quality: Without leadership quality, it isn't easy to manage any business venture properly. Once a business is established, an entrepreneur needs to employ more employees to turn his ideas into reality. Leadership quality is very important to guide employees to follow proper procedures and make good use of resources.
Open-Minded: Venturing with an open mind can benefit. Therefore, it is essential to keep looking for new opportunities where the business can be expanded or have greater profits or better market visibility.
Flexible: Being flexible to try out new ideas, products or processes can sometimes provide great results. While there are risks, it can also be beneficial if applied carefully. An entrepreneur should be open to adapting to business changes according to the market's needs or whenever he has a chance to defeat the competitors.
Knowledge about products: It is the most important part of entrepreneurship. An entrepreneur should be aware of the products that he or his company is offering with market requirements. It should be periodically evaluated whether the current offerings are satisfying customer demands or whether some changes need to be implemented to follow the latest trends in the market to meet customer needs.
Types of Entrepreneurship
Entrepreneurship types are mainly defined based on different business models. Although each type has almost the same challenges, there are different strategic methods to overcome them. There are many entrepreneurship types; however, it is mainly classified into the following four types:
Let us now understand each type in detail:
What is Small Business Entrepreneurship?
This type of entrepreneurship is the most common and widely seen worldwide. The reason for this is that most of the enterprises are small types of businesses. With small business entrepreneurship, people usually want to earn enough profit to feed their families and meet their basic needs. This type of entrepreneurship is mostly owned and operated by an individual unlikely to expand the business on a large scale. In this entrepreneurship, the business owner usually employs local employees or family members.
In small business entrepreneurship, businesses such as local grocery stores, tea shops, plumbers, electricians, barbers, carpenters, consultants, and more are considered. However, they should not be formed into a nationwide series or franchise by one person. Entrepreneurs typically invest in small business entrepreneurship using their savings or small loans from banks, or friends or family.
Characteristics of Small Business Entrepreneurship
The following are some common characteristics of small business entrepreneurship:
What is Scalable Startup Entrepreneurship?
Scalable startups are not as popular as small business entrepreneurship. Entrepreneurs who create this type of entrepreneurship have the idea of making changes in the world. Although enterprises in scalable startups typically start on a smaller scale, they often attract plenty of media and other outside investors who work to encourage and support those who build something different and new. This means that scalable startups typically receive funding that they use for growth, development, and research. They hire the best employees and work towards the experimental model.
With money and continued growth, such enterprises become large and popular. Besides, entrepreneurs work primarily to find things missing in the market and then develop something new to fill that missing gap. Scalable startup entrepreneurship typically seeks rapid expansion over time and earns huge profits. Some of the most popular examples of scalable startup entrepreneurship are Facebook and Instagram.
Characteristics of Scalable Startup Entrepreneurship
The following are some common characteristics of scalable startup entrepreneurship:
What is Large Company Entrepreneurship?
Enterprises having a fixed set of life-cycles are covered under large company entrepreneurship. This means that such enterprises are responsible for creating new products, services or technologies from time to time due to changes in market needs and competitive atmosphere. Many of this type of entrepreneurship arise from small business entrepreneurship. As far as a small business grows over time, it can expand further and turn into large company entrepreneurship. Such companies usually hire advanced professionals who can help maintain their innovation and quality.
If a large company acquires small business entrepreneurship, then a small business is called large company entrepreneurship. These companies usually aim to launch more products or services revolving around their core products. However, to cope with rapid technological changes, they also try to produce innovative products to attract new customers in the developing market. Companies such as Google, Microsoft, and Adobe come to the category of large company entrepreneurship.
Characteristics of Large Company Entrepreneurship
The following are some common characteristics of large company entrepreneurship:
What is Social Entrepreneurship?
Social entrepreneurship involves entrepreneurship, where an entrepreneur sets up an enterprise primarily to produce products and services that can be profitable to solve social problems. In simple words, enterprises providing innovative solutions to solve community-based issues fall under social entrepreneurship. Social entrepreneurs are more focused on implementing positive social changes with their products and services rather than generating more profit. Generally, they start as non-profit businesses or enterprises and push themselves to work towards social good.
Characteristics of Social Entrepreneurship
The following are some common characteristics of social entrepreneurship:
Other Types of Entrepreneurship
Apart from the above types of entrepreneurship, some other popular types are discussed below:
Innovative entrepreneurship involves enterprises in which entrepreneurs come up with innovations and inventions. They are more focused on creating products based on their new ideas. They keep working to create what people want to achieve in the market. Such products and services ultimately help people improve their lifestyles and make it easier. The entrepreneurs behind such entrepreneurship are called innovators and are highly motivated and passionate. They work in such a way as to create products or services that can stand apart from all other competing things in the market, even from all things in a particular category. People like Bill Gates and Steve Jobs created innovative entrepreneurship ventures.
Entrepreneurs who focus on continuously working hard for their goals are known as hustlers, and the enterprises run by them fall under the category of hustler entrepreneurship. Hustler entrepreneurs usually start their ventures on a small scale, expanding further through continuous efforts and hard work. They are considered to be self-motivated people who work to achieve their goals without any excuse. No matter what effort and hard work they put in, they keep working until they achieve them. Furthermore, such entrepreneurs do not give up so easily and learn from experience to improve.
Imitators refer to entrepreneurs who learn from other entrepreneurs. This means that imitators use another business concept and set up their business venture. These business enterprises come to the category of the imitator entrepreneurship. However, imitators tend to focus on improving product quality by filling the fault of others. They learn from and fix mistakes made by others, creating a new and improved version of the product. Using this method, they are more likely to make more profits in a very short period. Besides, imitators are also referred to as entrepreneurs who have the quality of both innovator and hustler. This is because they develop new ideas to improve products and work hard, yet they start their venture by copying from others.
Researchers are very cautious type of entrepreneurs, and they take enough time to start any business venture. Meanwhile, they conduct many research and studies to understand all aspects of the particular business. They do this because they believe in a practical mode rather than a conceptual model of business. By doing proper research, they minimize the risks of failing to the maximum extent possible. They are likely to earn more profits over time and grow their business. Any enterprise established using such methods falls into the category of researcher entrepreneurship. Researchers usually rely on experimental data, facts, and logic to ensure that what they will do will also help them succeed.
Buyer entrepreneurship usually involves the type of enterprise that is acquired by the individual. In this case, an individual is called a buyer entrepreneur. These types of entrepreneurs do not start business ventures on their own. Instead, they analyze and find enterprises that may be more successful shortly. They then purchase such ventures and make management or structural changes to improve the particular enterprise's products or services. Doing this helps them to grow their business and earn more profit. Buyer entrepreneurship is not considered risky because buyers usually buy well-established business ventures. Typically, buyers have better vision and expertise to acquire enterprises that are most likely to be successful.