Updated: Apr 22
Becoming an entrepreneur requires passion, perseverance and zeal. Whether you have just started and opened a business, or are developing an existing one, understanding the types of entrepreneurship is an important part of your journey to success.
By focusing on the unique differences of entrepreneurship, you will be able to meet your company's challenges with a deeper awareness of how you should handle them and what types of resources you need. From choosing the type of business you want to develop, to creating a website that targets the right audience, there are many steps you need to take to become a successful entrepreneur.
What are the types of entrepreneurship?
While the basic principles of entrepreneurship are the same - planning, starting and running a business - the distinct nuances and skills needed vary depending on the type of business you plan to start. Becoming an entrepreneur requires the ability to define these differences, and find the unique elements needed.
Traditionally, entrepreneurship is categorized into four main types: small businesses, scalable startups, large businesses, and social entrepreneurs. These models cover the basics of starting a business and focus more on the company itself, rather than the characteristics of the entrepreneur. But just as the world continues to change, so do companies. This means new opportunities for risk-taking and innovative game changers to pave the way in various entrepreneurial ways.
With this in mind, although there are quite a few similarities when it comes to the challenges that all business owners will face, there are certain types of entrepreneurship defined by the entrepreneur's skills, attributes and personality traits. Ultimately, it is the way you choose to run your business that sets them apart.
10 most common types of entrepreneurship:
Small business entrepreneurship
Scalable start-up entrepreneurship
Entrepreneurship in a large company
01. Entrepreneurship for small businesses
This type of entrepreneurship refers to any kind of small business created by one person, with no goal of expanding or franchising. For example, if you are planning to open a nail salon, a general store or a taco truck, your goal would be to start a single store. You will probably plan to hire local employees or even family members to get your business up and running, and you will need to invest your resources directly in the business.
In this type of business, you only earn if your business does, which means you have to be very driven, responsible and committed to your vision. In 2020, there were 33.7 million small businesses in the United States, which accounted for 99.9% of the companies, which proves that small business entrepreneurship is on the rise.
02. Scalable startup entrepreneurship
Anchored in the idea of changing the world, scalable startups focus on how they can create a business model that is both repeatable and scalable (more sales with more resources). From the beginning, this entrepreneurial style begins with the hope of rapid expansion and great profit returns. Many startups have a similar "garage to riches" narrative, which begins with a simple idea that is brought to life by the perseverance of entrepreneurs with the support of investors. Amazon, Google and Apple are all examples of groundbreaking startups that have changed the world.
To establish a successful startup, you need to be aware of how much money you have (which is often supported by venture capital investors) and the human resources behind your business. The key to starting this type of business model is knowing the long-term plans for profitability and the ways your business will grow, both for the sake of investors and your own.
Unlike an entrepreneur, who is also an entrepreneur, designer and manager of a business, an intrapreneur is a self-motivated and action-oriented employee who thinks out of the box and works as an entrepreneur in a company. Intrapreneurship is a way companies can support and encourage employees who have an entrepreneurial spirit.
Shutterstock, for example, hosts an annual 24-hour hackathon that lets employees pursue innovative ideas that will benefit the company. Another example of an intrapreneurial innovation is Facebook's "Like" button, which was also created in a similar hackathon event, which is now an integral part of the brand.
04. Large Business Entrepreneurship
Entrepreneurship in large companies refers to companies such as Disney, Google, Toyota and Microsoft that have limited life cycles, as in that they continue to innovate and offer consumers new products that are variants around their core product line.
A characteristic of this type of entrepreneurship is that it is not about starting a new business, rather creating new products or subsidiaries in an existing company, or acquiring smaller businesses (as when Facebook bought Instagram and WhatsApp). More specifically, these divisions are focused on reaching new markets, expanding the customer base and expanding the business.
Another part of entrepreneurship in large companies is a commitment to build corporate culture, and ensure that all employees are part of the growth as a company expands.
05. Imitative Entrepreneurship
Imitation is the best form of flattery, and an imitating entrepreneur (also referred to as an adoptive entrepreneur) is one who copies what successful innovative entrepreneurs have done in the past, often with lower financial risk and limited resources.
If you use an imitative entrepreneurial style, you are essentially copying an idea, but finding ways to improve it. By noticing the mistakes of others and finding creative ways to make a business better, you can become a lucrative entrepreneur.
06. Innovative entrepreneurship
Innovative entrepreneurs, as the name implies, are constantly trying to invent the next big thing. If you have cutting-edge ideas on how to start a business or specific services and products that can become business ventures, you can be an innovative entrepreneur.
As an innovator, you know that you must always be aware of current market conditions to find original and creative ways to disrupt them. Innovation refers not only to product ideas, but also the ways in which the business is run. Innovative entrepreneurship changes the status quo and pushes boundaries.
07. Buyer Entrepreneurship
You have probably heard the saying "money makes money", and for a buying entrepreneur this is definitely true. Instead of figuring out how to raise money for a business, a buying entrepreneur buys either a developing or well-established company and helps them thrive.
Unlike investors, a buyer entrepreneur is involved both financially and personally in the business, stays active and directly helps the investment to grow. It is not uncommon for buying contractors to hand over management to someone else at some point, but they always maintain an active part in the businesses they buy.
08. Research entrepreneurship
Researchers rely on facts, data and the belief that with the right preparation and knowledge, they will be more likely to succeed. If this sounds like you, this is exactly what research entrepreneurship is all about - a good business idea combined with academic research, and an understanding of how to stretch limited resources to the maximum.
Take a look at Nobel Prize winner and physicist, Theodor Hänsch, a research founder who co-founded MenloSystems, took his winning optical frequency comb technology and uses it to create products for the market.
09. Hustler Entrepreneurship
Do not let the name knock you off, a professional refers to a self-starter, a highly motivated person who is driven to succeed. This type of entrepreneurship style grows directly from the entrepreneur, who must be confident, fearless and have a strict work ethic.
If you're the type of person who can sell anything to anyone, is always aware of the next big thing and is able to recognize opportunities, after all, you may just be a tough guy.
10. Social entrepreneurship
Social entrepreneurs are innovators whose main goal is to create products and services that both benefit the world and make money. Social entrepreneurship is related to non-profit, for-profit or hybrid companies that are committed to social or environmental change. Some examples include educational programs, microfinance institutions and companies offering banking services in undeveloped countries.
Tom's shoes were a pioneer in social entrepreneurship, starting in 2006 and offering a one-on-one sales model that provided a pair of shoes to a child in need for every pair of shoes sold. What distinguishes social entrepreneurship from other types is the goal of success, in that the goal is not only focused on financial gain, but also on the social impact.
Freddy Fix borrowed from Wix