Entrepreneurship is often thought of as the act of starting a new business venture. But in reality, there is more than one type of entrepreneurship, each with its own unique characteristics and challenges.
While it is true that the most common form of entrepreneurship is starting a new business from scratch, buying one, or investing in a startup are also forms of entrepreneurship. In fact, there are other types of entrepreneurship that are just as valid and valuable but are often overlooked.
In this article, we will explore four most common types of entrepreneurship, as well as lesser-known ones. From social entrepreneurship to buyer entrepreneurship, we will delve into the different ways entrepreneurs can create value and make an impact in the world.
Whether you are an aspiring entrepreneur with the most innovative ideas, a one, or simply someone who is interested in the world of business, this article will provide valuable insights and inspiration. So, if you are ready to learn more about the different types of entrepreneurship out there, read on!
What is entrepreneurship?
Entrepreneurship is the process of starting, organizing, managing, and assuming the risks of a business venture. It involves identifying a need in the market, developing a business plan to meet that need, and then bringing the plan to fruition by starting and growing the business.
Entrepreneurs are often characterized by their innovation, risk-taking, and ability to bring new ideas and products to the market. They may start their own business from scratch or take over and revitalize an existing business.
Entrepreneurship can be applied to a wide range of industries. These include technology, retail, service, and more. It is often considered a vital component of a strong economy, as entrepreneurs create jobs and drive economic growth.
Why become an entrepreneur?
1. Personal growth
Entrepreneurship can be a challenging and demanding experience, but it can also lead to personal growth and development. Entrepreneurs learn to take risks, manage their time, be resilient, and be creative problem solvers. They learn how to adapt to changes and how to handle failure. Entrepreneurship can also help individuals develop leadership skills, strategic thinking, and decision-making abilities. It can be a very rewarding personal development journey.
2. Impact
Entrepreneurship can also be a way to make a positive impact on society, by creating jobs and addressing social or environmental issues through their business. Entrepreneurs have the ability to create new opportunities for others and to develop products or services that address important social or environmental issues. This can be a gratifying aspect of entrepreneurship, as it allows entrepreneurs to not only create financial success for themselves but also make a positive impact on the world around them.
3. Financial rewards
Entrepreneurs who are successful can potentially earn a significant amount of money, especially if their business grows and becomes successful. Entrepreneurship can be a great way to create financial security and independence, and it can provide an opportunity to build wealth over time. However, it's important to note that not all businesses will be successful and it requires a lot of hard work, dedication, and patience to achieve financial rewards.
4. Independence
Being an entrepreneur allows you to be your own boss and make your own decisions about how to run your business. This can be very appealing for people who enjoy having control over their own destinies. You are in charge of your own success and it gives you the freedom to make decisions and chart your own course. Entrepreneurship allows you to be in control of your own time and schedule, which can be very appealing to people who value flexibility and autonomy.
What are the 4 most common types of entrepreneurship?
1. Small business entrepreneurship
This type of entrepreneurship is focused on starting and growing small, local businesses. Small business entrepreneurs often start with a single idea or product and work to build a customer base and grow their business over time.
Small business entrepreneurship is not focused on expansion, but instead on the small business itself.
Examples of small business entrepreneurship include independent retail stores, restaurants, and service providers. Small business entrepreneurs often have a strong understanding of their local market and customer base and are able to adapt and evolve as the market changes.
They are also able to maintain a strong relationship with their customers, which can be a key factor in the success of their business. However, small business entrepreneurship can also be challenging, as these businesses often have limited resources and may have a harder time competing with larger companies.
2. Scalable startup entrepreneurship
This type of entrepreneurship is focused on starting and growing businesses that have the potential to scale rapidly. Scalable startups often have new products or services that can be replicated and sold to a large number of customers.
Examples of scalable startup entrepreneurship include technology companies, online retailers, and app developers. Scalable startups often require significant investment and resources in order to grow rapidly, and they may also require startup entrepreneurs to have a strong understanding of technology and the digital landscape. However, the potential for rapid growth and the ability to reach a large number of customers can make this type of entrepreneurship very rewarding.
3. Social entrepreneurship
This type of entrepreneurship is focused on using business strategies to address environmental or social problems. Social entrepreneurs often start businesses with the goal of making a positive impact on society, rather than solely generating profits.
Examples of social entrepreneurship include organizations like the Singaporean lifestyle brand The Animal Project. As its name suggests, The Animal Project sells animal-themed products designed by resident artists. Not only do the artists earn royalties from the sales, but at least 50% of profits are also donated to partner charities and nonprofit organizations.
Social entrepreneurship can be very rewarding, as it allows entrepreneurs to make a positive impact on the world while also building a successful business. However, it can also be challenging, as these businesses often have limited resources and may have a harder time competing with larger, more established companies.
4. Large company entrepreneurship
Large company entrepreneurship refers to the process of creating and implementing new and innovative business ideas within existing large organizations. It involves taking calculated risks, implementing new and creative solutions, and driving growth within the company.
Examples of large company entrepreneurship can be found in a variety of industries.
Large companies engage in entrepreneurship as well through new ventures.
In the tech world, large companies such as Google, Microsoft, and Amazon have engaged in large company entrepreneurship through the creation of new products and services. These include Google's self-driving car and Amazon's Alexa. In the retail industry, companies like Walmart and Target have implemented large company entrepreneurship by leveraging their existing customer base and resources to enter into e-commerce and digital markets.
Large companies have resources, established infrastructure, and an existing customer base. These can all be leveraged to drive growth and innovation.
This type of entrepreneurship allows these companies to respond to changes in the market and adapt to new technologies and trends. It also allows them to create new revenue streams, enter new markets, and increase their competitiveness.
Wait, there’s more?
While these four are the most commonly discussed types of entrepreneurship, they are definitely not the only kinds there are out there. Let’s explore 8 more varieties of entrepreneurship.
1. Franchise entrepreneurship
This type of entrepreneurship is focused on starting and operating a business that is part of an existing franchise system. Franchise entrepreneurs purchase the rights to use a proven business model, brand, and support system, rather than starting a business from scratch.
Examples of franchise entrepreneurship include fast food chains like Jollibee, bubble tea brands like Gong Cha, and gym brands like Gymmboxx.
Franchise entrepreneurship can be a good option for those who want to start a business but lack the experience or resources to do so from scratch. The franchisor provides support and guidance to the franchisee, which can help the business to be successful. This can include social media marketing training, operation management, and accounting.
However, franchisees must work within the guidelines provided by the franchisor and may have less flexibility in terms of business decisions like brand marketing.
2. Digital nomad entrepreneurship
Digital nomad entrepreneurship refers to the practice of running a business while traveling and working remotely.
Any skill is monetizable if you have the right tools to connect you to the right audience.
Digital nomads are entrepreneurs who use technology to work remotely, often while traveling or living in different locations. Using tools such as laptops and smartphones, they are able to run their businesses anywhere in the world as long as they have an internet connection.
One of the key benefits of digital nomad entrepreneurship is the flexibility it offers. Digital nomads have the freedom to work from anywhere, which allows them to live and work in places that they find interesting or inspiring. Additionally, digital nomads are often able to set their own schedules, which can help them achieve a better work-life balance.
A great example of a digital nomad entrepreneur is Christian LeBlanc, best known for his YouTube Channel, Lost LeBlanc. He started off as an amateur travel vlogger and eventually became the owner of one of the biggest travel YouTube channels out there. Because of the flexibility his job provides, he is able to explore other endeavors like building a villa in Bali and running a YouTube creator academy.
Apart from being a social media influencer and property investor, other forms of digital nomad entrepreneurship include providing consulting services, running a virtual marketing agency, or running an e-commerce store.
3. Legacy entrepreneurship
Legacy entrepreneurship is a type of entrepreneurship that is focused on creating a lasting impact on society, not just financial gain.
Entrepreneurs of legacy entrepreneurs are driven by a desire to make a difference in the world, and their business ventures are often focused on solving social or environmental problems. They often strive to create businesses that will outlive them, and that will continue to make a positive impact on the world even after they are gone.
One of the key characteristics of legacy entrepreneurship is the focus on creating a sustainable business model. Legacy entrepreneurs often strive to create businesses that will be able to operate independently and continue to make a positive impact on the world even after the entrepreneur is no longer involved. This often involves investing in long-term projects and building a strong, dedicated team.
Some examples of legacy entrepreneurship can be found in a wide variety of industries. These can include:
- Environmental conservation: Legacy entrepreneurs may start businesses focused on preserving natural resources, such as renewable energy companies, or organizations that work to protect endangered species and habitats.
- Education and mentorship: Legacy entrepreneurs may start businesses or organizations that focus on providing education and mentorship opportunities to underprivileged or marginalized communities.
- Affordable housing: Legacy entrepreneurs may start businesses or organizations that focus on providing affordable housing and other essential services to low-income communities.
- Social enterprise: Legacy entrepreneurs may start social enterprise businesses that address societal issues such as poverty, hunger, and inequality, while still being financially sustainable
- Philanthropy: Legacy entrepreneurs may start foundations or other organizations that focus on philanthropic giving, often to support the causes they care about
- Impact investing: Legacy entrepreneurs may start impact investing funds or platforms, that invest in companies and projects that generate measurable social or environmental impact alongside financial returns.
4. Buyer entrepreneurship
Buyer entrepreneurship refers to the practice of creating value by acquiring and integrating existing businesses, rather than starting new ventures from scratch.
Buyer entrepreneurs are individuals or organizations that identify and purchase existing businesses with the goal of improving and growing them. These entrepreneurs are often experts in identifying undervalued assets and creating value through strategic operations and management.
Take Alex Hormozi for example. He runs acquisitions.com, a company that helps other business owners find and acquire profitable businesses. In doing so, he helps businesses acquire new capabilities to scale their existing businesses.
One of the key benefits of buyer entrepreneurship is the ability to scale a business quickly and efficiently. Buyer entrepreneurs can acquire existing companies and resources, which can give them a head start in terms of customers, employees, and other assets.
Additionally, buyer entrepreneurs often have access to capital and can use it to purchase and grow businesses more quickly than if they had to start from scratch.
Examples of buyer entrepreneurship include:
- Private equity: Private equity firms are buyer entrepreneurs that acquire and grow companies through leveraged buyouts. They use their capital and expertise to purchase and improve undervalued companies, often with the goal of selling them at a higher value later.
- Consolidation: In some industries, buyer entrepreneurs will acquire multiple companies in the same field and combine them to create a larger, more efficient organization. This can be seen in industries like manufacturing, where companies will acquire competitors to gain market share and improve their economies of scale.
- Turnaround: Buyer entrepreneurs also focus on acquiring struggling companies and using their expertise to turn them around and make them profitable again. They often focus on improving operations, cutting costs, and growing revenue.
- Roll-up: Some buyer entrepreneurs will acquire multiple companies in the same field and combine them to create a larger, more efficient organization. This can be seen in industries like retail, where companies will acquire multiple smaller stores and combine them to create a larger retail chain.
5. Imitative entrepreneurship
They say imitation is the best form of flattery. Case in point, enter imitative entrepreneurship.
It refers to the practice of starting a business by copying or adapting existing business models, products, or services. Just look no further beyond Asia to see the number of tech companies trying to emulate Uber’s success. Think Grab, Gojek, and DiDi.
Don’t back out just because you see that someone else has already turned an idea into a business. Chances are, there are some market needs they cannot cover.
Imitative entrepreneurs often look to successful businesses in their industry and replicate their strategies and practices in order to achieve similar success. This can include things like copying a business's marketing strategies, product offerings, or distribution channels.
One of the key benefits of imitative entrepreneurship is the ability to reduce risk. Imitative entrepreneurs are able to learn from the successes and failures of existing businesses, which can help them avoid common mistakes and increase their chances of success. Additionally, imitative entrepreneurs often have a lower barrier to entry, as they can leverage existing infrastructure and resources.
Do you have a better idea of the different types of entrepreneurship now?
The world of entrepreneurship is vast and varied, with many different types of entrepreneurs and business models.
While the traditional forms of entrepreneurship are well-known and widely recognized, there are many other types of entrepreneurship that are just as valid and valuable.
The five additional types of entrepreneurship we have explored in this article – franchise, legacy, buyer, imitative, and digital nomad entrepreneurship – offer a wide range of opportunities for entrepreneurs to create value and make an impact in the world.
By understanding the different forms of entrepreneurship that exist, we can broaden our understanding of what it means to be an entrepreneur and inspire more people to think differently about the possibilities available to them. You don’t have to be the most innovative entrepreneur to be successful.
And regardless of where you are in your entrepreneurship journey, understanding the different types of entrepreneurship is essential to understanding the different ways to create value and make a difference in the world.
In the end, it is important to remember that there is no one-size-fits-all solution and that entrepreneurs should find the type of entrepreneurship that best suits their skills, passions, and goals.
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