8 julio, 2024

The 12 Types of Entrepreneurship and their Characteristics

The types of entrepreneurship They refer to different classifications related to the characteristics that determine the development of a new business idea. Each way of undertaking has its particular characteristics.

It is necessary to take into account that not all ventures pursue the same objectives. All entrepreneurs, business ideas and management and innovation methods are different; for this reason there are different classifications.

Each entrepreneur or group of entrepreneurs has a way of starting a business or idea. It depends on the personality of the entrepreneurs, the socioeconomic conditions, the available resources, even luck.

In any case, starting a business is always something complicated that requires perseverance and sacrifice. Knowing the most common classes can help the entrepreneur to better understand the process and approach it better.

Types of entrepreneurship according to size

– Small businesses

Small businesses are all those in which the owner runs his business and works with a couple of employees, usually family members. They are businesses such as grocery stores, hairdressers, carpenters, plumbers, electricians, among others.

Most of these ventures are barely profitable. They are considered successful when they meet the objective of supporting the family and providing a minimum of benefits.

– Scalable ventures

Scalable ventures are small companies at the beginning, but they are conceived as projects that can achieve great growth.

This is the case of technological innovation ventures, which can achieve great growth in a short period of time. This is why there are venture capitalists, betting large sums of money on ostensibly fledgling businesses.

These projects are based on the creation of business models that are repeatable and scalable. Once they find the appropriate model, venture capital becomes necessary for their rapid expansion.

The scalable ventures that are currently being developed in innovation clusters —such as Silicon Valley, Shanghai, Israel, among others— are a very small percentage of global ventures.

However, they currently receive the majority of venture capital due to the outsized returns they achieve once they are up and running.

– Large ventures

It refers to large companies with finite life cycles. This type of venture must maintain constant innovation in its products and services in order to grow.

For this reason, they must be in a continuous process of research and understanding of changes in the market.

The changing tastes of customers, new technologies, changes in legislation and the innovation of competitors must be criteria to take into account for a large venture to stay alive.

– Social enterprises

These are ventures whose central purpose is not to capture a specific market share, but to contribute to social development.

They are often not-for-profit companies and are focused on innovation in the fields of education, human rights, health and the environment.

Types of ventures according to innovation

– Innovative entrepreneurship

They are ventures in which a research and development process leads to innovation.

This constitutes a strong competitive advantage when entering the market, because it guarantees an impact based on the needs of the target audience of the product or service.

Usually this type of entrepreneurship is usually related to science and technology. Therefore, they are companies that require high financing to be able to develop the research process and the subsequent creation of the goods.

– Opportunistic entrepreneurship

It refers to those ventures that arise in a context where an urgent need or a clear business opportunity can be identified.

This undertaking requires a high sensitivity to detect, exploit and execute opportunities.

– Incubator entrepreneurship

It refers to those ventures that are not based on emerging opportunities, but on a whole process of prior incubation. Therefore, they focus on satisfying those market needs that are permanent and well known.

This type of entrepreneurship has a long process of research, growth and development. However, being based on permanent conditions, its results can be relatively predictable and therefore its results can be more stable.

This is usually a method also used by large companies that are already positioned in the market, which use it to stay current.

Under this approach, entrepreneurs allocate a part of their budget to incubate new products to offer them within a certain period of time.

– Imitation entrepreneurship

This type of entrepreneurship consists of imitating a product or service that is already successful in the market. It can occur through the creation of a new product or through a franchise.

In the case of new products, what is sought is to imitate those aspects of a product that have already proven to be successful. However, in all cases, new aspects must be included that allow users to offer added value.

In the case of the franchise, the venture focuses on an already created business model. In some cases, the only innovation consists in adjusting marketing details according to the region where the product is launched.

Types of entrepreneurship according to the entrepreneur

– Private entrepreneurship

It refers to those companies that are developed through private capital.

Within this type of venture, the initial investment can come from the entrepreneurs themselves (in the case of small businesses) or from venture investors (when it comes to larger projects).

On the other hand, in certain countries it is also possible to find cases where the public sector provides financial subsidies for the creation of private companies.

– Public entrepreneurship

It refers to those undertakings developed by the public sector through its different development agencies.

In all countries it is possible to find this type of public initiatives, focused on covering the deficiencies in the offer of private entrepreneurs.

– Individual entrepreneurship

Individual entrepreneurship is that developed by a single person or a family.

This type of entrepreneurship is usually more frequent in the case of small companies, and it is unusual for it to include research and development processes.

– Mass Entrepreneurship

This type of entrepreneurship occurs in social contexts where there is a favorable climate for the creation of new companies.

This favorable context can occur thanks to stimuli from the government. However, it can also occur conditioned by other social, economic, scientific or technological aspects that are generated in a specific place.

References

Casnocha, B. (2011). «The Four Types of Entrepreneurship» in Ben Casnocha. Recovered from Ben Casnocha: casnocha.com
Chand, S. (SF). “Entrepreneurship: Characteristics, Importance, Types, and Functions of Entrepreneurship” in Your Article Library. Retrieved from Your Article Library: yourarticlelibrary.com
edunote. (SF). “Nine Types of Entrepreneurship” in iEdu Note. Retrieved from iEdu Note: iedunote.com
Mote, S. (2017). “Four Types of Entrepreneurship: Because One Definition Does Not Fit All” at KC Source Link. Retrieved from KC Source Link: kcsourcelink.com

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