Entrepreneurs enjoy numerous benefits, such as having the liberty of being their own boss, and benefit others by supplying jobs and contributing to the economy. Developing an entrepreneurial mindset and aspiring to start a business is excellent, but you must first consider the different types of entrepreneurship, and decide which one best suits you.
But before we dive into anything, let’s first define entrepreneurship and understand what it entails.
What is entrepreneurship?
Entrepreneurship is the creation of a business and bringing innovative ideas into the market. They fill gaps in the market and solve problems that many share. This process usually involves creating a new product or service in hopes of generating profit.
This also means that entrepreneurs will have to take on the financial risk that comes with any business venture. However, this means that entrepreneurs also enjoy the majority of the benefits if the business is to succeed.
Entrepreneurs aim to introduce their ideas and passions to the world. These individuals must foster a set of skills to be effective leaders and innovators. Because there are so many types of entrepreneurship, they must choose one that best complements them and stick to it.
The 7 different types of entrepreneurship
People have varying aspirations for the business they want to create. For some, this may mean achieving success through a mix of hard work and dedication, while others may think that existing capital can help them find success.
There are different types of entrepreneurship that involve different situations, such as starting a business from scratch to buying existing businesses. Whatever type of entrepreneurship you pick, make sure that it is compatible with you and your vision.
Let’s take a look at the 7 different types of entrepreneurship, as well as examples of each.
1. Small business entrepreneurship
The first type of entrepreneurship we’ll discuss is small business entrepreneurship. This form of entrepreneurship makes up the majority of businesses and is often the first step people take in their entrepreneurial journey. In fact, 99.9% of all businesses in America are small businesses.
Small business entrepreneurship is when a person starts and runs their own business, either on their own or with the help of others. They typically use their own money to operate their business, seeking to make enough money to support their family and lifestyle.
Examples
- Local stores (grocery stores, pawn shops, etc.)
- Plumbing business
- Restaurant
2. Intrapreneurship
Intrapreneurship is acting as an entrepreneur while working within an organization.
Companies that encourage intrapreneurship are ones that inspire their employees to adopt an entrepreneurial mindset, thinking of new ideas or ways to improve business practices, products, or services.
Intrapreneurship allows employees to take on entrepreneurship without the financial risk since projects are dependent on the company’s funding.
Examples
Many companies separate successful ideas into product lines. For example:
- Sony’s PlayStation
- McDonald’s Happy Meal
- Amazon Prime
3. Scalable startup entrepreneurship
Scalable startups develop a business idea with the intention of swift expansion. They dream big, attempting to grow in rapid succession and become profitable.
Scalable startups seek to expand in the market and serve a larger customer base. Typically, these entrepreneurs will pursue aid through the likes of venture capitalists, who often favor this form of business.
Examples
There are a plethora of businesses that are massive now but started with small-scale operations. These include:
- Apple
- McDonald’s
4. Social entrepreneurship
Social entrepreneurship involves a business model concerned with a particular social issue. They are geared more toward problems in our society, such as student debt, finding scholarships, or poverty.
Since they focus on social change, their definition of success can be different, often tracking their success based on their progress on a certain issue rather than profits amassed.
Examples
Some social entrepreneurs may choose to start a nonprofit, while others choose to start a profitable company that gives back to their community. Examples of social entrepreneurship include:
- Educational programs (CollegeBoard)
- Youth/community service programs (4-H)
- Eco-friendly companies (lush)
5. Innovative entrepreneurship
Innovative entrepreneurs focus on creating a unique idea for a business, product, or service. They seek innovative solutions that others have failed to come up with.
Innovative entrepreneurs aim to make their products and services stand out from the competition and challenge the status quo in their industry.
Examples
- Steve Jobs (Apple)
- Bill Gates (Microsoft)
- Mark Zuckerberg (Facebook)
6. Buyer entrepreneurship
Buyer entrepreneurship is a type of entrepreneurship that involves a wealthy individual utilizing their wealth to buy businesses in hopes of making a profit. Instead of starting a business themselves, they will invest in other businesses.
These companies seek out promising businesses and aim to acquire them. Additionally, the company makes any management or structural changes that they feel are necessary.
Examples
- Venture capitalist firms (Sequoia Capital)
- Investors
7. Large company entrepreneurship
Large company entrepreneurship aims to grow a large company from an existing business model. It involves creating new products, services, and ideas based on already existing market demand.
This is often practiced as a result of a large company’s products nearing the end of its’ life cycle. The company focuses on creating new products that meet the changing customer demand and reestablish a brand as more relevant and valuable.
Examples
Large companies aim to expand their market equity by investing in new ideas and new technologies. Examples of large companies that have done this include:
- Samsung
- Amazon
There are numerous types of entrepreneurship to choose from. Whatever type you choose, make sure that it suits both your vision and current situation.
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