Entrepreneurship isn’t a one-size-fits all model. There are different kinds of small businesses, and there are different kinds of entrepreneurs. Below is a list of the seven most common types of entrepreneurs. Which type – or combination of types – are you?
Home-based entrepreneurs are self-employed. They run their business alone or with just a few employees, with headquarters being their own home or a home office. These business owners love the flexibility and autonomy of working from home, as well as the freedom to arrange their own schedules. These businesses usually don’t have a storefront, street advertising signs, or customer parking.
Examples: Bookkeepers, tutors, and graphic designers.
Internet-based entrepreneurs run their business online and use virtual technologies to support business activities. The business can provide a service or sell a product through a website. Some internet-based businesses can be home-based businesses too.
Examples: Virtual assistants, marketplace sites such as eBay and Etsy.
Lifestyle entrepreneurs rank furthering their own personal goals second to making a large profit. Lifestyle entrepreneurs can pursue a cash-generating hobby during their spare time, or even start a business based on an interest. These businesses usually aren’t intended to be high growth, and usually have few employees.
Examples: A secondhand book store, or a small market stall selling homemade baked goods.
4) High potential
High potential entrepreneurs usually run companies employing between 20 and 500 people. These companies are often very fast-paced, with high growth rates, developing the latest technologies and innovations. Most start-up activity by high potential entrepreneurs is technology and internet related. They are often able to get funding easier than other sorts of businesses
Examples: Quickly-growing technology companies and large IT businesses.
Social entrepreneurs are passionate about making a positive impact on the world around them. They create a business to provide solutions to social issues. They are also called non-profit or philanthropist entrepreneurs. Funding for social entrepreneurs typically comes from non-profit organizations, foundations, governments and non-governmental organizations.
Examples: KickStart International and the Grameen Bank.
6) Venture capital
Venture capitalists invest in businesses, through managerial and technical expertise, as well as with money. Venture capitalists are very picky about the companies they invest in, and as much as 98% of firms seeking funds are rejected. Aside from individual angels and venture capitalists, venture capital firms also exist.
Examples: Seen on CBC’s Dragons’ Den, as well as in large companies like those in Silicon Valley.
7) Franchise format
With direction and support of the franchisor, franchise format entrepreneurs open a franchise or chain in their local business area. These entrepreneurs follow the structures of their franchise and experience less freedom and autonomy than other types of entrepreneurs. However, they also enjoy the reduced risk of being part of an established franchise.
Examples: Century 21, Goodyear Tires, and Tim Hortons.