When you hear the word “entrepreneur,” you might think of someone starting up a tech company in their garage and taking it to a multi-million dollar enterprise. However, there are many different types of entrepreneurship, and some remain rather small throughout the lifetime of the company.
Those who start their own businesses have a passion to change the world around them. According to the Small Business Administration (SBA), there are approximately 31.7 million small businesses in the United States. Of course, some entrepreneurs start out large thanks to investor backing. The vast majority, however, begin on a miniscule budget.
What category do you or your idea fall into? In general, entrepreneurs start and run a business. However, there are different ways to get there. There are many basic types of entrepreneurship.
1. Small Business
Probably the most common of the types of entrepreneurship is the small business model. This would be any business with typically less than 500 employees. There is some variation, depending upon the industry. If you’re unsure, check with the IRS to see how they classify you and talk to your local SBA office.
If you open a bakery in your town, you’re considered a small business. If you eventually start your own manufacturing and employ 10,000 bakers, your classification changes. A small business entrepreneur knows they will need the support of their family, community and good old-fashioned work ethic.
Some entrepreneurs come up with a completely new way of doing things or a concept no one else ever thought of. If you’re an inventor or you have a truly unique idea, you may be an innovative entrepreneur.
Some examples of innovative entrepreneurs would be Bill Gates, who invented the Windows Operating system, taking computers from something where you had to know DOS coding to use to a what you see is what you get (WYSIWYG) environment. Mike Lindel of the My Pillow fame, took a common item and added his own twist to it.
No one can keep up with an innovator, because they have unique products and ideas the rest of the world doesn’t offer.
Another of the types of entrepreneurship is the hustler mentality. This is a person who might not have a unique idea or even an unusual product. They simply work harder and smarter than anyone else.
The hustler business owner tends to start small, such as a local real estate agent who began in the industry, started buying rental properties and flipping houses, and eventually worked her way up to a multi-million dollar a year income.
The advantage of a hustler is that no one will outwork this person. They also can start on a shoestring without waiting for investors and build something out of seemingly nothing.
4. Buyer Entrepreneur
Most people will not fall into this type of entrepreneurship. The buyer is already wealthy. They look for opportunities to invest in companies they feel will be successful, acquiring them and letting them continue business as usual with a few tweaks.
In order to invest in other companies, the buyer entrepreneur must already be successful or have the backing of rich investors. An example of this type of business would be Google, who has acquired many smaller companies and gobbles up the competition and unique new ideas.
They say imitation is the sincerest form of flattery, but it doesn’t seem that way when someone takes your business idea and does it better. Out of the types of entrepreneurship, imitators may be the most controversial. The imitator sees a business idea they like and immediately starts wondering how they might improve it.
An example of an imitator would be someone who likes Uber’s model, so they start their own ride sharing app. They don’t like a few things Uber does, so they tweak their policies to improve on the idea.
The researcher entrepreneur studies many different ideas and fully vets all aspects of starting a new business. They know the statistics and the odds of success before they invest a dime. They may even have a list of the potential pitfalls and what trouble areas they’ll run into as the business goes.
Researchers understand the risks involved before they open a company and are likely to be highly successful. However, a big disadvantage of a researcher entrepreneur is they may not have a passion for what they’re doing. They simply choose the least risky venture.
Some people start businesses as a side hustle. They have no desire to quit their day job, but they want a little extra money on the side. They may have a passion for art or some other craft and want to share it with the world. The solopreneur is a one-man or one-woman show. They don’t have any staff and they don’t want to grow beyond a certain point, because they don’t have the time to bother with scaling up.
The solopreneur is one of the types of entrepreneurship which falls into other categories as well. It could be defined as a small business, tech or fall into any other category. The advantage is you can start a solopreneurship inexpensively. The disadvantage is that you’re unlikely to grow past a certain point until you change your model.
8. Social Entrepreneurship
One of the most interesting types of entrepreneurship is social. This is a business that starts because the founders see something in society that needs changed. Perhaps they notice local school children go hungry in the summer. They want to set up a program to feed those kids, so they start a business selling personal chef services and donate the profits to meals for school children.
Some examples of social entrepreneurship include companies such as Cuddle + Kind, where they feed children and give jobs to women in impoverished countries. Boombas is another example of a company that started to help provide socks to those in need of them. Every time they sell a pair of socks, they donate a pair.
This particular type of company isn’t in it only for the profit, but also to help make the world a better place. The owner tends to be idealistic and involved in many aspects of a cause they care deeply about.
Why Type Matters
Understanding what kind of entrepreneur you are helps you know what your strengths and weaknesses are. There are dozens of ways to define a business owner. The ones above are some of the most common models of company structure. What do you relate most to and how can you apply your knowledge toward growing a thriving organization?