TYPES OF ENTREPRENEURSHIP
When thinking about the many types of entrepreneurship, this is a big reason I decided to become a business coach. I love the variety of the amazing small business owners that I coach.
An entrepreneur is someone with the ability and desire to start up, administer and succeed at a particular business, bearing the associated risks to make a profit. When we hear of entrepreneurs, we often think of individuals who establish new business ventures regardless of the risks.
Entrepreneurs are often regarded as a hub of innovation, as they bring new ideas and innovation to the market. They break cycles of monotony in processes and products. They combine resources like land, labor, capital to generate new goods/services.
There are various types of entrepreneurship, classified based on several factors. In this article, we will be exploring the nine different types of entrepreneurs. But before we get into it, let’s see some common characteristics among entrepreneurs. Check out this information on employer of record services.
Characteristics of Entrepreneurship:
Before we proceed, it is worth mentioning that not all entrepreneurs succeed in their ventures and being an entrepreneur doesn’t automatically make one successful. However, most successful entrepreneurs have some traits in common. Here are a few of them.
They take risks
The associated risks with starting a new business venture are pretty considerable, as there are chances of failure. Entrepreneurs, therefore, need to be bold and very courageous. They also need to evaluate the risks and benefits of a new venture and make relevant conclusions about whether it is worth engaging. Taking risks is what being an entrepreneur is all about.
They are innovative
Entrepreneurs are a hub of new ideas. They think differently and outside the box too. Their innovative ideas are capable of generating new revenue streams for their companies. This could involve introducing a new product to the market, augmenting an existing product in the market, or establishing a new market for products. They could also positively impact the production process, making it more efficient, thereby maximizing profits.
They possess visionary and leadership quality
To be successful entails having a clear vision of the new venture, and successful entrepreneurs have this quality.
Having the vision is one thing, and materializing it is quite another. Thus, successful entrepreneurs can combine available resources towards the attainment of set goals and objectives. They possess unparalleled leadership skills in guiding and influencing employees in the path of success.
They are usually open-minded
Successful entrepreneurs can recognize circumstances as opportunities with the potential to benefit the company positively.
They are flexible
Successful entrepreneurs aren’t rigid; they are flexible and open to change when the need arises. They are ready to embrace a new path or product when necessary.
Nine Types of Entrepreneurship
Entrepreneurs materialize ideas into reality. They create jobs and have a tangible impact on the economy. There are many entrepreneur types, each with a distinct characteristic and path, defined by their personality, ability, and surrounding environment.
There isn’t a universally accepted distinction in the types of entrepreneurs, as the types differ from region to region based on the country and the sectors active in that country. The most common, however, are,
- Small Business Entrepreneurs
- Large Company Entrepreneurs
- Scalable start-up Entrepreneurs
- Social Entrepreneurs
- Fabian Entrepreneurs
- Drone Entrepreneurs
With the many types of entrepreneurship I would venture to say that when you factor in the many different styles, talents and personalities, there is a different type for every business on the planet! But to simplify the list, we will discuss the 9 types. Each of these distinct categories of entrepreneurs has different rules of business success. Still, they usually go through similar tussles regarding finance, people, marketing, and even self-management issues.
Let us explore some of the more prominent types of entrepreneurs, what makes them unique, their roles, and how they impact the business’s success.
As the name implies, innovators describe the class of entrepreneurs that develop entirely new ideas and transform those seemingly far-fetched ideas into viable business opportunities.
These entrepreneurs usually change peoples’ perceptions of things, opening up their understanding to view and think differently. As a general trend, innovative entrepreneurs are usually passionate about their cause, sometimes coming off as obsessive, and are deeply intrinsically motivated because of their business ideas’ uniqueness.
As a unique characteristic, innovating entrepreneurs usually introduce new goods/ / services and new production methods, create new markets, and completely restructure an enterprise for greater productivity.
Being innovative also applies to their ability to devise new approaches and ways to market their products. They use unique strategies that separate their companies from the crows and help them stand out with product differentiation strategies. And it doesn’t end there. They may not only stand out from the crowd but have the potential to create a new crowd, changing the status quo in significant ways.
Advantages of Innovative Entrepreneurship
- They usually receive all the credit for the business’s success, as they bear the brunt.
- They create the rules of engagement.
- During the initial days of the business, they would, very often, face minimal competition
Disadvantages of Innovative Entrepreneurship:
- Birthing a new idea to reality would usually necessitate vast amounts of capital.
- They often encounter significant resistance and opposition from current shareholders.
- Their job always requires patience as the timeline for success is a lot longer than usual.
- They can work only when a certain development level is already achieved, and people look forward to changing and improving.
This type of entrepreneurship’s unique attribute is their ability to visualize a new pattern of thinking and discover new ways of doing things, which sets them apart from the crowd of entrepreneurs and makes them largely successful. However, innovators’ burden reflects the amount of patience, commitment, and required capital to bring about innovation.
As a mark distinction from innovators who go through the pain to develop new ideas as fuel for the business process, hustling entrepreneurs invest hard work. They are not afraid to get on their blue-collar suits and get their hands dirty. Unlike the innovative type of entrepreneurship that looks to significant capital to implement their new vision, hustlers usually start small and focus on investing hard work and effort to grow their businesses. These entrepreneurs pay attention to a small start-up and look to grow it steadily with the hope of becoming more prominent in the future.
With their dream, hustlers find the motivation and the commitment to work very hard to realize them. They are usually very focused individuals who’d stop at nothing to achieve their dreams. They would quickly get rid of any distractions in their path, preferring to take risks and the discomforting path than indulge in pleasure and comfort. Think of the famous Mark Cuban, as an example here, who started at a very young age selling trash bags, postage stamps, and newspapers. His company later progressed to a goldmine which the internet giant Yahoo later purchased.
Advantages of Hustler Entrepreneurship
- they are the most hardworking of all types of entrepreneurs. They will outwork most
- they usually don’t give up easily and will usually develop thick skin.
- Having a thick skin also implies they’d see challenges, rejection, disappointments, and failures as a part of the journey.
Disadvantages Hustler Entrepreneurship
- Having to invest such gruesome amounts of hard work means they are more likely to burn out.
- The degree of work they engage in can also wear out their team members, who may not have the same agility of work ethic.
- Some hustlers may overlook the need to accumulate capital as they’d prefer to invest their labor in working harder.
This type of entrepreneur usually never gives up. It also means they are usually more willing than most to try just about anything to succeed. Though they may succeed, the number of trials and errors may become significant, and the time taken to achieve their dreams daily increase.
Fabian entrepreneurs are a type of entrepreneurs that are generally stereotypic concerning change. They are generally skeptical about implementing changes in the business.
Fabian entrepreneurs do not initiate new ideas but can copy innovations only after being fully satisfied with the innovative entrepreneur’s already implemented initiative. Fabian entrepreneurs are more imitators than initiators.
Imitators are those who copy others (captain obvious!) Fabian entrepreneurship, thus, involves copying the trends and patterns of other businesses and making improvements upon them. Fabian entrepreneurs can copy other business ideas or products and improve upon them to gain the upper hand and dominate the market.
This type of entrepreneur usually has great readiness to adopt successful approaches already implemented by successful innovative entrepreneurs. Though they may not innovate themselves, they also do not copy and implement without making some adjustments and improvements to suit their context and agendas. In developing nations, such entrepreneurs are pretty instrumental in driving in a new wind of change. They can adopt new strategies and techniques from other successful entrepreneurs and usher in combining factors of production foreign to their economy, but not to already developed regions.
Imitators incorporate attributes of innovative and hustling types of entrepreneurship. They do not seek to maintain the status quo but seek to change things, and they ride on a great deal of confidence and handwork in what they strive to achieve.
Advantages of Imitators
- Modifying and adapting an already-existent and tested idea is a lot easier and less strenuous.
- Adapting an already tested idea also makes it possible to compare your results with the original developer and implementer of the idea.
- Taking the route of imitating makes it possible to avoid mistakes that would have been made in initiating a new idea.
Disadvantages of Imitators
- The ideas of imitators always appear to be in the shadow of the original.
- They are always behind, trying to reach up to already set standards.
It can be a great idea to adapt an existing idea to suit one’s context in developing a business. The associated risks with imitation aren’t as much as initiating a new venture altogether, but it might not acclaim all the credit for the initiative when the copied idea finally succeeds.
Even when an individual has an idea, there needs to be adequate research to gather relevant information, which takes time. This is where research entrepreneurs come in.
Researchers take the time to get all the necessary information before engaging an idea. To them, there isn’t any room for failure since they know all there is to know about the venture they’re engaging in.
Researcher entrepreneurs go the route of information gathering because they believe a business has a higher chance of success when there is an in-depth understanding of all aspects of the business. That is why they put in the work to seek out the knowledge. Consequently, they usually take a great deal of time to launch new products or make new decisions because they need great knowledge foundations upon which to act. They, thus, rely heavily on facts and existing data than intuition and instincts.
For researcher entrepreneurs, there should be no room for errors.
Advantages Researcher Entrepreneurship
- They consider and plan for as many foreseeable contingencies as possible
- Their business and financial plans are usually well thought out, detailed, and substantiated with relevant data.
- They rely on data and facts rather than instincts for decision-making.
- They usually wouldn’t make a move until they feel they have adequate knowledge of the market.
- Because of the immense research, they are less likely to make mistakes or fail in business.
Disadvantages of Researcher Entrepreneurship
- Since they require extensive research backing their actions and decisions, they usually move slowly.
- They don’t like taking risky ventures, and for new ventures, that will stagnate and hinder the move as every new venture requires some degree of associated risks.
Researcher entrepreneurs invest a great lot of time investigating and digging into existing to substantiate their decisions/actions. That can easily land them in the harmful habit of drooling over the numbers rather than paying attention to the business’s running.
This type of entrepreneurship is very resistant to change. Drone entrepreneurs exhibit great reluctance in accepting change and are very conservative in their methods and procedures.
Drone entrepreneurs exhibit great contentment with the business’s current state and see no need to alter an already perfect system of operation. They will, thus, prefer to maintain an inefficient production process even though they are suffering losses than to introduce changes of any kind.
Advantages of Drone Entrepreneurship
- They are more stable in their operations and can’t be influenced by temporal trends.
- They quickly get content and can wave off unnecessary pressures for change
Disadvantages of drone Entrepreneurship
- Stereotypic attitudes can birth stagnation in the business
- They run the risk of having irrelevant businesses in their failure to embrace changes.
Buyers have a characteristic feature as entrepreneurs – their wealth. They have the money and are specialized in buying off profitable businesses.
Buyers scan through and identify valuable businesses. They then assess the business’s viability and, based on their conclusions, move to buy the business and get a competent individual to run and grow the business actively.
Advantages of Buyer Entrepreneurship
- The risks associated with purchasing an already established business are minimal.
- This type of entrepreneurship has little worry for innovation as it jumps on already implemented innovation.
- Rather than building from the foundation up, buyers can easily focus on developing an already-started venture.
- There already exists a market, and buyers inherit the products’ market when they purchase a business.
Disadvantages of being a Business Buyer
- The cost of acquiring a business can sometimes be very costly, and buyers often pay high prices for profitable businesses.
- There is still a degree of associated risks involved in buying businesses with problems that are underestimated or you think can be easily handled. That may not always be the case.
Small Business Entrepreneurship
Small business entrepreneurship is a type of entrepreneurship that involves the ownership and running of one’s small-scale business.
Most businesses today are small businesses. This type of entrepreneur toggles capital and profit sufficient to take care of self, household, and other basic needs. They don’t go for large-scale ventures or capital-demanding businesses. They would, most often, hire family or local community members.
Funding for such small businesses comes from gifts, small-scale loans, or savings.
Advantages of Small Business Entrepreneurship
- Requires very little capital to become a small business entrepreneur
- Work with smaller teams of individuals
Disadvantages of Small Business Entrepreneurship
- Profits from these businesses are small
- It May sometimes not be recognized by official government programs.
Large Company Entrepreneurship
Large-scale entrepreneurs work with companies with a finite amount of life cycles in this size-based classification, larger-scale businesses. This type of entrepreneurship requires professionals with innovative skills to sustains business.
Large companies usually introduce new products to meet customer demands and grow from small businesses under the right growth conditions. Small businesses can also become large companies if an already large company buys them over.
Advantages of Large Company Entrepreneurship
- Prominent company entrepreneurs are innovative. They can bring new ideas and sustain company relevance for generations
Disadvantages of Large Company Entrepreneurship
- Requires more professional skills and innovations, thus limiting the range of persons that can become prominent company entrepreneurs
Scalable Start-Up Entrepreneurship
When entrepreneurs believe that their company can change the world, they become scalable start-up entrepreneurs. They are often funded by venture capitalists and must need hire professionals with specialized skills.
This type of entrepreneur has an eye to identify needs in the market and provide adequate solutions as a business idea. Most cases of scalable businesses are technology-based and have global impacts, like Facebook.
Scalable start-up entrepreneurs require investors who believe in their idea and can appreciate out-of-the-box thinking. Their need to work with just the best and brightest in a specialty can sometimes make this entrepreneur picky. They also would need incredible amounts of capital to fund their ideas.
Advantages of Scalable Start-Up Entrepreneurship
- They are innovative and can think outside the box
- They usually have a great degree of confidence in what they do.
Disadvantages of Scalable Start-Up Entrepreneurship
- They require more professional teams of individuals to work with and can be very picky
- Their notions of changing the world with an idea can sometimes depict them as crazy, especially if they fail.
- They require significant amounts of capital to start and fund their ideas
When an entrepreneur focuses on solving social problems by supplying particular goods and services, they are social entrepreneurs. They aim to make the world better by their goods/services they supply. Their focus isn’t the amount of profit they make but the degree of a positive impact on the world.
Social entrepreneurs will, most often, engage in non-profit companies and NGOs, dedicating themselves towards the social welfare of humanity.
Advantages of Social Entrepreneurship
- They focus on the social well-being of humanity
- Their focus isn’t profit-making but making the world a better place
Disadvantages of Social Entrepreneurship
- Having a social well-being perspective means their decisions and actions may not always favor the company’s growth.
- Social causes may not attract as many investors as profit-making ventures.
Importance of Entrepreneurship:
The activities of entrepreneurs generate employment opportunities for the public. They create new jobs for both skilled and unskilled labor.
Increase Public Standards of Living
Entrepreneurship harnesses and promotes innovation. Such innovation is the drive behind introducing new products, services, technology, and qualities of goods to the market. Their innovation, thus, enhances the standards of living of the general public.
There is bound to be development in society when there are increased employment rates and better living standards. Facilities for investment like education, sanitation, markets, infrastructure, etc., become highlighted for development. By their activities, entrepreneurs promote social and community development, leading to a better quality of life.
Increase Income Levels
Entrepreneurship also provides more opportunities for individuals to raise more money for themselves and their loved ones, thus raising income levels in the community. Increased income levels mean increased expenditures on essential commodities and luxury commodities, thus raising general living standards.
Promote research and development
Entrepreneurship is a hub for innovation, and by the work of entrepreneurs, new products and services come on the scene. But these new products need to be adequately researched before they can be introduced for public consumption. As such, entrepreneurs invest in research ventures and dispense towards research institutions and universities. Their drive promotes research and, consequently, development in the economy.
Now that we’ve discussed some of the types of entrepreneurship, check out this article on the Top 10 Best Business Tools for Entrepreneurs!