As we must know at EC, entrepreneurs are individuals who create a new business, bearing most of the risks and enjoying most of the rewards. They play a key role in any economy, using the skills and initiative necessary to anticipate needs and bringing good new ideas to market. The ones that succeed gain rewards in the form of profits, fame, and continued growth opportunities. On the other hand, the ones that fail result in losses and less prevalence in the markets for those involved. Anyone interested in starting and running their own business should consider which entrepreneurial model they prefer. Some academics might categorize entrepreneurs into groups, based on their entrepreneurship skills, characteristics or personality. Nonetheless, academics traditionally categorize entrepreneurship into four main types, which cover the fundamentals of starting a business and focus more on the company itself. The types of entrepreneurs are:
Idea of opening a business without turning it into a large conglomerate or opening many chains. In other words, these refer to any kind of small business that an individual creates, without the goal to expand or franchise. Could be any company, a single-location restaurant, or retail store. These individuals usually invest their own money and succeed if their business turns a profit. They don’t have outside investors and will only take a loan if it helps continue the business. Therefore, entrepreneurs only make a profit if the company does, meaning they need to be very driven, responsible and committed to their vision. In terms of employees, small businesses’ founders normally plan on hiring a few local employees or even family members.
According to Statista, last year there were approximately 5.58 million small and medium-sized enterprises operating in the United Kingdom.
Scalable startups are less common than small businesses. However, they tend to attract a lot of media attention. This type of entrepreneurship wants to change the world. These are companies that start with a simple unique idea that is nurtured and scaled, until it becomes something much larger. As a result, this idea evolves into a unique product or service that hopefully will keep the company growing as time passes. Scalable startups often require investors and large amounts of capital to grow their idea and reach multiple markets. The key to starting this type of business model is knowing the long-term plans for profitability and the ways in which your company will grow, both for the sake of your investors, and your own.
Amazon, Google and Apple are all examples. These began as an idea gotten in an attic, garage, or home office, before eventually scaling into large corporate headquarters.
Large companies have finite life cycles. They are new business divisions that create new products or subsidiaries within an existing company, or acquire smaller businesses. As a result, they keep innovating and offering consumers new products. These are variants around their core product-line, to reach new markets and expand. Changes in customer tastes, new technologies, legislation, new competitors, etc. can create pressure for more disruptive innovations. As a result, large companies need to create entirely new products that can sell to new customers in new markets.
Another component of large company entrepreneurship is a commitment to building company culture. This way companies ensure that all employees are a part of its growth.
According to Statista, the largest companies in the UK, back in 2020, were BP, HSBC and Prudential.
Social entrepreneurs are innovators whose main goal is to create products and services that both benefit the world, and make money. For that reason, they focus on helping communities or the environment through their products and services. These companies relate to nonprofit, for-profit, or hybrid companies and they are committed to social or environmental change. Therefore, their goal is to make the world a better place. To achieve this, social entrepreneurs are willing to take on the risk and effort to create positive changes in society through their initiatives.