While some people prefer to work for a well-established company, others prefer to start their own businesses, where they can bear both the risk and the reward. Those in the latter category may go on to become business owners. Here are four different types of entrepreneurship they could pursue.
What Is an Entrepreneur?
An entrepreneur is someone who starts a new business from the ground up and then stays on to manage it. When starting a new business, entrepreneurs frequently take a financial risk. However, if they have creative ideas, a solid business plan, and adequate funding, they can achieve meaningful success and reap the financial benefits that come with it.
When you think of successful entrepreneurs, you might think of those in the technology industry. However, entrepreneurs can be found outside of Silicon Valley, such as in the arts, medicine, and the nonprofit sector.
The Four Types of Entrepreneurs
Entrepreneurs are classified into four types. Here's how each type of entrepreneurship works in the marketplace:
1. large corporations Entrepreneurship: a large corporation Entrepreneurship begins with the formation of a new company from an existing conglomerate. BAMTech, a digital streaming company founded by Major League Baseball, is one example. BAMTech provided streaming services for Major League Baseball games as well as other streamers. BAMTech was later spun off by MLB as its own company.
2. Scalable startup entrepreneurship: A scalable business begins small but aspires to grow into a large corporation. These types of businesses necessitate the type of entrepreneur who not only has a great new idea but also a strong desire to expand and gain market share. A scalable business is a grocery store that starts with a single location and grows into a regional or national chain through expansion, mergers, and acquisitions.
3. Small business entrepreneurship: This type of entrepreneurship focuses on a single business and has no plans to expand. Small business owners, such as hairdressers and plumbers, as well as owners of single-location retail stores, are examples.
4. Social entrepreneurship: Social entrepreneurs establish new businesses in order to address societal issues and promote social change. They usually set up their businesses as non-profits. These companies aim to raise as much money as possible to fund their charitable endeavors.
How Does Entrepreneurship Work?
Entrepreneurship can be divided into five stages:
1. Idea: Entrepreneurial ventures begin with a business idea, which frequently involves new products, new technologies, improved services, or a solution to a social problem.
2. Plan: The entrepreneur then creates a business plan for their new venture, recommending a business model and a set of objectives.
3. Funding: An entrepreneur will then seek venture capital to fund his or her fledgling business. This could come from professional venture capitalists, small business loans, crowdfunding campaigns, or angel investors such as family and friends.
4. Operations: An entrepreneur can start a business with an idea, a business plan, and funding. Unlike passive investors, entrepreneurs are actively involved in their businesses or non-profits. They frequently serve as the company's first CEO or chair the board of directors.
5. Growth, stability, or dissolution: A successful business can spend many years in the startup phase. It eventually reaches long-term stability, expands, or dissolves.
How to Become an Entrepreneur
To achieve your goals as a small business entrepreneur, scalable business entrepreneur, or social entrepreneur, you must employ a few key tactics:
Accept a certain level of risk tolerance. Being your own boss and starting a business requires a significant amount of risk-taking. Startup entrepreneurs may choose to invest their own money in their businesses rather than working a day job. Although understandable, risk aversion may not be compatible with an entrepreneurial mindset.
Request assistance. Aspiring entrepreneurs should seek mentorship from well-known figures in their industry. Consider the founders and co-founders of businesses you admire. Request that they review your business plan and give you honest feedback. Even if it hurts your ego, keep an open mind to what they say. Learning from the best can help you achieve greater business success.
Improve your financial literacy. Entrepreneurs frequently manage the economic development of their own businesses. They require financial working comfort, from fundraising to managing cash flows to accounting to tax compliance. They must also hire dependable partners who are well-versed in corporate finance. Many innovative ideas die on the vine because the inventor lacks the financial acumen to bring their products to market.
Develop a market understanding. Many business owners develop innovative products to solve problems they have encountered in their own lives. When the entrepreneur's pain points coincide with those of the larger market, it bodes well for the new product. Your business or product may fail if you do not consider what the general public wants.
Accept hard work. The typical entrepreneur is a bootstrapping hustler, someone who works tirelessly to staff and fund their business.
Improve your financial connections. Access to capital is the secret behind the majority of startup successes. This excludes those who do not travel in wealthy social networks. Even if you don't know anyone who can write you a large check, you can generate interest through crowdfunding campaigns, networking events, and cold calls to investors.
