5 Types of Entrepreneurial Businesses We Recommend: Which One Will You Start

Entrepreneurial Business Introduction

Entrepreneurship isn’t just running a business; rather, it is a name given to anything done to change the world. An entrepreneur is a world-changer, an innovator, and an opportunist. Now you might be wondering what entrepreneurship is. Let us explain to you in a little more detail!

Entrepreneurship is launching, developing, and running a business venture along with its financial risk. Such business ventures are valuable for economic development as it allows a country to expand its businesses and resources in the global market.

However, most people perceive entrepreneurship as one-dimensional, and they do not think about its various types. Today, we have decided to clear this confusion for you and explain different types of entrepreneurial businesses in hopes that you can start a profitable business venture and achieve a successful business.

All entrepreneurial businesses need digital marketing in this day and age, so regardless of what structure you choose after reading this article, I have a course for you!

What Is Entrepreneurship?

Entrepreneurship is the process of designing, launching, and running a business venture. It involves taking calculated risks, innovating, and adapting to changing market conditions. Entrepreneurs are the driving force behind economic development, as they create jobs, stimulate innovation, and increase competition. By identifying opportunities and leveraging resources, entrepreneurs can turn their visions into reality, contributing to the overall growth and prosperity of the economy.

Definition and Importance of Entrepreneurship

Entrepreneurship is a vital component of a country’s economic growth and development. It allows individuals to turn their ideas into reality, creating new products, services, and jobs. Entrepreneurs are constantly seeking new ways to improve their offerings, which drives innovation and keeps the market dynamic. The ripple effect of successful entrepreneurial ventures can lead to significant advancements in technology, healthcare, education, and other critical sectors, ultimately enhancing the quality of life for many.

Benefits of Starting Your Own Business

Starting your own business can be a rewarding and challenging experience. Some of the benefits of entrepreneurship include:

• Autonomy: As an entrepreneur, you have the freedom to make your own decisions and run your business as you see fit. This independence allows you to shape your business according to your vision and values.

• Unlimited earning potential: Your earning potential is directly tied to your hard work and dedication. Unlike a salaried job, where income is fixed, entrepreneurship offers the possibility of substantial financial rewards.

• Innovation: Entrepreneurship allows you to bring new ideas and products to the market, which can lead to innovation and growth. By addressing unmet needs and solving problems, you can make a significant impact.

• Job creation: Entrepreneurship creates jobs, not only for the entrepreneur but also for their employees. This job creation helps reduce unemployment and stimulates economic development.

Types of Entrepreneurial Businesses

In this section, we will cover the different types of entrepreneurship and examples of entrepreneurship in that category. We hope this is helpful in deciding what resonates for you.

Small Business Entrepreneurship

It is common to see that more small businesses are running than more prominent companies in today’s growing world. Foundational elements such as financial stability, networking, and skill diversification are crucial for achieving a successful business. We can even roughly guess that about 75 % of companies are small businesses. Such companies hire a large workforce, and these businesses also make enough profits to make a living and support their families.

However, these types of businesses fail to capture attention from fundraising organizations, and mostly these small businesses have to ask for capital from their friends and families if needed.

Examples of Small Businesses:

• Hairdressers

• Grocery Stores

• Electricians

• Carpenters

• Plumbers

• Consultants

• I recommend Kajabi for coaches and consultants.

Scalable Startup Entrepreneurship

Entrepreneurs set up their own companies in this example of an entrepreneurship business, believing that their visions will positively change the world. Startups usually get funding from venture capitalists, and they prefer to hire the best employees. Ensuring adequate funding and forming professional connections are critical components for a successful business.

In short, such entrepreneurs focus on developing a reputable business model that can grow. When they succeed in this first step, they search for venture capitalists to help them start and grow their idea. However, these businesses usually make a small proportion due to risk capital and outsize returns.

Typically you will find that the most scalable startup entrepreneurship is in technology industrial ventures.

Examples of Scalable Startups:

• Facebook

• Instagram

• Online Shopping Companies

• I highly recommend Shopify for any e-commerce store

• Other online business

Characteristics and Benefits of Scalable Startups

Scalable startups are businesses that have the potential to grow rapidly and become large companies. Some characteristics of scalable startups include:

• A unique value proposition: Scalable startups offer a product or service that is unique and valuable to their customers. This distinctiveness sets them apart from competitors and attracts a loyal customer base.

• A large market: Scalable startups have a large market to tap into, which allows them to grow rapidly. The expansive market potential provides numerous opportunities for expansion and revenue generation.

• A strong team: Scalable startups have a strong team of employees who are dedicated to the company’s mission. A cohesive and skilled team is crucial for executing the business strategy and achieving growth.

The benefits of scalable startups include:

• Rapid growth: Scalable startups have the potential to grow rapidly, which can lead to increased revenue and profits. This growth trajectory can attract investors and provide substantial returns.

• Increased valuation: Scalable startups can increase in value over time, making them attractive to investors. A higher valuation can facilitate additional funding and strategic partnerships.

• Job creation: Scalable startups create jobs, not only for the entrepreneur but also for their employees. This job creation contributes to economic development and community well-being.

Large Company Entrepreneurship

These entrepreneurial businesses focus on sustaining innovations, offering new products that are a variety of their core products. Continuous research and development are crucial for maintaining a successful business. These entrepreneurial businesses must continuously research and develop new products and introduce digitally enabled operations to meet challenging customer demands and technological advancements. Often this is done by partnering with innovative companies or even purchasing those companies as well.

Most large company entrepreneurship is a result of acquisitions and mergers. A quick search of the example companies listed below will show you what I mean.

Examples of Large Company Entrepreneurship:

• Google

• Microsoft

• Samsung

Social Entrepreneurship

These entrepreneurial businesses focus on creating those products which provide services to people and solve their social needs and problems. Social entrepreneurs want to change the world and make it a better place rather than just accumulating profits and acquiring wealth. Such entrepreneurial businesses can be non-profit, profit, or hybrid.

Their success is the widespread use of ethical practices, including impact investing, conscious consumerism, and corporate social responsibilities. The success of social entrepreneurship can also be measured by the widespread use of ethical practices, contributing to a successful business.

Examples of Social Entrepreneurship:

• Microfinance Institutions

• Educational Programs

• Banking Services

• Welfare Services

Definition and Examples of Social Entrepreneurship

Social entrepreneurship is a type of entrepreneurship that focuses on creating social value rather than just generating profits. Social entrepreneurs use business principles to solve social problems, such as poverty, education, and healthcare. They aim to make the world a better place by addressing pressing social issues through innovative solutions.

Examples of social entrepreneurship include:

• Microfinance institutions: These institutions provide small loans to individuals who cannot access traditional banking services. By offering financial support, they empower people to start their own businesses and improve their livelihoods.

• Educational programs: These programs provide education and training to individuals who may not have access to traditional educational institutions. By enhancing skills and knowledge, they open up new opportunities for personal and professional growth.

• Healthcare services: These services provide healthcare to individuals who may not have access to traditional healthcare services. By improving access to medical care, they contribute to better health outcomes and overall well-being.

Jack of All Trades Entrepreneurship

Jack of all trades entrepreneurship refers to entrepreneurs who have a wide range of skills and expertise. These entrepreneurs are able to adapt to changing market conditions and are not limited to one specific industry or product. Their versatility allows them to explore various opportunities and pivot when necessary.

Some benefits of jack of all trades entrepreneurship include:

• Flexibility: Jack of all trades entrepreneurs are able to adapt to changing market conditions and are not limited to one specific industry or product. This flexibility enables them to seize new opportunities and navigate challenges effectively.

• Innovation: Jack of all trades entrepreneurs are able to bring new ideas and products to the market, which can lead to innovation and growth. Their diverse skill set and experience foster creativity and problem-solving.

• Autonomy: Jack of all trades entrepreneurs have the freedom to make their own decisions and run their business as they see fit. This autonomy allows them to pursue their passions and align their business with their personal values.

By understanding the different types of entrepreneurial businesses and their unique characteristics, you can make an informed decision about which path to take. Whether you choose to start a small business, a scalable startup, or a social enterprise, the key is to align your business with your strengths, passions, and goals.

Importance of Entrepreneurial Businesses

We all have thought about this and wondered why entrepreneurship is so in demand and appealing. Foundational elements such as financial stability and networking are crucial for achieving a successful business. So, we even considered making you aware of its paramount importance for a country and oneself.

Entrepreneurial Businesses create jobs and reduce the country’s unemployment rate, hence supporting a country’s economy. Moreover, as this business venture grows, more positions develop, and poverty among the people lessens.

Entrepreneurial Businesses create change because these entrepreneurs always make a product that provides a solution to people’s everyday problems. In short, their ambitions and ideas are the game-changer of the world.

Entrepreneurial Businesses help to provide and help societies. Most people assume that Entrepreneurial Businesses are just focused on making money, but in reality, the more money they make, the more taxes they will have to pay, and there will be more funds for social services.

Factors That Might Affect your Entrepreneurial Businesses

Some factors always seem to hinder your path to success. Understanding and mitigating these factors are essential for achieving a successful business. Some of them are mentioned below!

• Number one is the political factor because if a country’s political situation is not great, your business might not grow or even lose.

• Legal considerations represent another crucial aspect to bear in mind. Ensuring your business operates within legal parameters holds paramount importance. This means following all the regulations and keeping your business and customers safe from legal problems. One smart way to do this is by using strong identity verification. You can use identity verification software, like the one from Jumio, to check the identity of your customers and partners. This helps stop any fake or dishonest activities and makes your business more secure. When you use this kind of technology, you not only do what’s required by law but also build trust with everyone involved in your business.

• Taxation is another to take care of because if you are running an Entrepreneurial Business, you would like to have as much profit as possible to expand your business further. However, if taxes are high in the country where you run your Entrepreneurial Business, your hard work may go to the government as taxes.

  There are countries that allow you to make an investment in order to gain citizenship and therefore start a business.

• The availability of Capital is the only thing that will lead your idea of opening your new business venture or not. You cannot offer jobs or set up your business without any money!

Now, let us discuss further what other types or sub-types of Entrepreneurial Businesses can exist.

Sole Proprietorships

Sole proprietorships are one of the common types of entrepreneurial businesses you would encounter in your daily lives. Usually, small businesses are categorized under sole proprietorships, but some large entrepreneurial firms can also be sole proprietorships.

So, what is a sole proprietorship? Generally, for a person who owns a business and is personally responsible for it, there is no legal significance between the owner and the industry in small, entrepreneurial companies.

Advantages and Disadvantages

Such entrepreneurial businesses are popular because of the ease and simplicity of their setups. Small businesses are included in sole proprietorship because such entrepreneurial companies require nominal costs. Moreover, a sole proprietor needs to secure local licenses to carry out their businesses.

On the other hand, there are some problems with sole proprietorship types of entrepreneurial ventures because the company owner is liable for all the business's debts. If that owner runs into financial trouble, he can be a victim of lawsuits from creditors. If those lawsuits are successful, the owner will be in pain as they have to pay all the debts from their own pockets.

Examples of Sole Proprietorships

• A single Person Art Studio

• A local Grocery

• An IT Consultation Service

Partnerships

Partnerships are another sub-type of entrepreneurial businesses, and, commonly, you will see such entrepreneurial ventures on large companies. Now let us define this!

As from the word Partners, you can have a general guess that more than one person runs this entrepreneurial business. In definition, we can say that it is a legal form of operating a trade between two or more people. All the business partners will share management and profits, and such businesses are further categorized in general and limited partnerships.

Advantages and Disadvantages

In general partnerships, the partners are responsible for managing a company and even debts and other obligations. While in limited partnerships, the partners act as investors. They do not have any control over the company, and they are not subjected to any liabilities that general partners might have. A partnership business can even be run by a mix of limited and public partnerships.

If a person does not have any experience in the administrative area, then partnership entrepreneurial businesses are not a good idea because they require filings and regulatory complexities.

Examples of Partnerships

• Red Bull and GoPro

• Sherwin-Williams and Pottery Barn

• West Elm and Casper

• Dr. Pepper and Bonne Belle

LLCs

The full form of LLC is a ‘Limited Liability Company.' This entrepreneurial business model is mostly used in the United States of America. In such an entrepreneurial business structure, owners are not personally responsible for a company's liabilities and debts. Moreover, these entrepreneurial businesses can be considered hybrids resulting from a corporation with those of a partnership and corporation businesses or sole proprietorship and corporation businesses. It is an entrepreneurial business model that combines the pass-through taxation of partnership and sole proprietorship with the limited liability of a corporation.

Advantages and Disadvantages

The LLC'S benefits include no limit or restriction on the number of members allowed in this entrepreneurial business. Members even have flexibility in structuring the company management. Furthermore, it does not require as much annual paperwork or formalities as corporations need, and owners are free from debts and liabilities.

However, these entrepreneurial businesses are expensive to form and have a limited life. Lastly, ownership is typically harder to be transferred within a corporation.

Examples of LLCs

• Amazon

• Chrysler

Corporations

This is another subtype of a large entrepreneurial business. A corporation can be considered an organization made up of people or different companies. The government has authorized them, states to act as a single entity, and is even recognized in law for specific purposes. This type of entrepreneurial business is guided by a group of officers known as the board of directors.

Such corporations are the most beneficial types of entrepreneurial businesses because these corporations exist as separate entities. A corporation does not own the right to vote and some other limitations, but apart from that, a corporation carries all the legal rights an individual has.

Advantages and Disadvantages

Some benefits of corporations are that the shareholders of a corporation are only liable up to the amount of investment they have made. Due to this, the personal assets of a person are protected. Such entrepreneurial businesses can even raise money by selling shares or issuing bonds. Moreover, it allows the transfer of ownership as well.

On the contrary, there are some drawbacks to such entrepreneurial businesses. You might even have to pay double taxes, and there can be excessive tax filings as well. Moreover, it can be quite tricky to manage such entrepreneurial businesses independently.

Examples of Corporations

• Microsoft

• Google

• Apple

• Exxon Mobile

Franchises

Now, let us talk about what franchises are. It is just a type of license that a part that we can call a franchise acquires. They are allowed to have access to a business's proprietary knowledge, trademark, and processes so that the party can sell that similar product or provide that same service under the original business's name. They have to pay franchisors an initial start-up fee and annual licensing fees. These Franchises lead us to our new discussion.

Why is it better to purchase franchises rather than build the business from scratch?

First of all, the risk of having a business failure is near to a minimum because if you start a business by franchising, your business model will be based on a proven, tested idea. If it is too good to be true, you can check how successful other franchises were.

Secondly, as the parent company will already establish the products and services, you would not worry about marketing, and there would be no need for market testing. Moreover, you would already use a recognized brand name and a trademark. When the real business owner promotes their brand, your franchise will automatically be improved, and you will get more customers. Such perks are nearly zero if you start building your business from scratch.

Thirdly, the franchisor will also be ready to give you support and even training and help set up the business. The owner will also readily give you advice on the go, which undoubtedly will aid you in profiting more and more.

Fourthly, as franchises are a kind of small business, association with a recognized brand allows the franchises to compete with big brands, and you may even get exclusive rights from the franchisor itself.

What's more, banks will also be ready to lend you money to purchase a franchise with a good reputation, and hence financing will also be easy to do. Furthermore, relationships with other franchisors and suppliers will already be established, and you could use their support to grow more.

What are the disadvantages of franchises over building a business from scratch?

First of all, you would not have your brand or identity as you will be using the brand name of your franchisor. Moreover, franchisors even have the right to implement restrictions on a franchise and how it can be run, making you handicapped when using your ideas and implementing them.

The costs of purchasing a franchise may be a lot higher than you would have expected. You may have to pay continuing management service fees, apart from the initial cost, and even agree on buying things and products from the franchisor.

Thirdly, you may find it challenging to sell your franchise because you have no power without the franchiser's approval. Moreover, if franchisors go out of business, then so do you.

Lastly, your profits might be shared with your franchisor, restricting you from making vast sums of money and benefits.

Your own eyes can witness some examples of such businesses and franchises. You might have seen McDonald's and KFC fast-food restaurants when you are on the road. These are franchises bought by different people and running in different places. These people used these franchises as an alternative to building their businesses from scratch.

We recommend you purchase a franchise rather than build your business from scratch. By running a franchise, you will learn the ethics and rules of a company and different business strategies, which you can later imply to your business and build without any hindrance. Having experience is the knowledge to succeed in the field of marketing.

Exploring Global Entrepreneurial Opportunities

Entrepreneurship isn't confined to local markets; it often involves exploring opportunities on a global scale. For instance, programs like the Caribbean CBI (Citizenship by Investment) offer entrepreneurs a unique chance to expand their ventures internationally. These programs not only provide access to new markets but also offer benefits like global mobility and favorable business environments. By leveraging such opportunities, entrepreneurs can diversify their investments and tap into emerging markets, fostering innovation and growth.

Conclusion

In a nutshell, Entrepreneurial Businesses are of several types, and it depends on you to choose. If you are a risk-taker and have enough capital, you can go for a large business venture, or if you desire to use your money carefully, then going for small businesses is what you should be doing. Business & entrepreneurship is never one size fits all. It deals with a lot of risk-taking and failures but those just spark new ideas. Take those new ideas and turn them into new business ventures. I gave a lot of examples of entrepreneurship. Get family members involved to help you brainstorm what you are good at. Remember, you can always have multiple businesses! I usually have more than one business going at any given time. Successful entrepreneurs are not made overnight!

Need help deciding which structure is best for you?

There are so many different kinds of small businesses. If you want to be a successful entrepreneur with your own business, we can help you brainstorm ideas based on your personal and business needs.  Feel free to book a business consulting call.