Is not classification of entrepreneurs according to the types of business?

The Indiranagar ka gunda advertisement featuring Rahul Dravid—former Indian captain—became an Internet sensation. It was an ad for the credit card bill payment application called Cred. Kunal Shah, an MBA dropout, is the brain behind the enterprise. Cred has also turned into a unicorn start-up (valued at over $1 billion).

Shah had launched several other ventures in the past. He shut down PaisaBack to set up FreeCharge which he sold to venture into Cred. Entrepreneurs take risks all the time. With the passion to create change, there are various types of entrepreneurs who have emerged over the years. Different kinds of entrepreneurs pursue their entrepreneurial journeys differently. But first, let’s understand what the terms ‘entrepreneur’ and ‘entrepreneurship’ mean.

Understanding Entrepreneur And Entrepreneurship

Entrepreneurs are visionaries who can convert an idea into a business, big or small. Entrepreneurship is the process of initiating, developing and operating a business from the ground up. Innovation and digital advancements have sped up the need and significance of entrepreneurship. It has brought forward-thinking individuals to the fore who possess the drive to turn a business vision into reality.

There are several characteristics of an entrepreneur that set them apart from others. They’re creative, self-starting and flexible risk-takers who anticipate business needs and bring new ideas into the market. They play a key role in the economy as they take risks on innovative ideas. While the odds of success may not always be promising, they encourage change and out-of-the-box thinking among industries.

Exploring The Types Of Entrepreneurship

Although the characteristics of entrepreneurship remain universal—development, launching and running a business—there are different types of entrepreneurship.

1. Small Business Entrepreneurship

People in small businesses are most likely to make profits that support their families and households. They don’t seek large-scale profits or funding and often own or run their own business. The staff comprises local employees and family members. Some examples include restaurant owners, hairdressers and plumbers.

1. Large Business Entrepreneurship

In some cases, big enterprises acquire smaller enterprises and expand their business into different market segments. Even small businesses can turn into large-scale enterprises as they continue to grow rapidly. Disney (the multinational mass media and entertainment conglomerate) is a common example; it acquired Pixar and grew in scale.

1. Scalable Start-up Entrepreneurship

Scalable start-up businesses have become one of the most effective ways to create business solutions that are missing from the market. A majority of these businesses are technology-focused and rely on mobile-based applications to launch their products and services. They seek rapid expansion and receive venture funding to support and sustain themselves. Popular examples include Uber, Facebook and Airbnb.

Not all types of entrepreneurship are focused on generating profits. Many enterprises focus on solving social problems through their products and services. Such entrepreneurs are primarily dedicated to making the world a better place with their business solutions.  They dedicate themselves to working toward social good. Nonprofit organizations are perfect examples of social entrepreneurship.

1. Innovative Entrepreneurship

People in such enterprises are constantly coming up with new ideas and inventions. They take these ideas and pursue them through business ventures. They’re highly passionate and motivated and often aim to change lives for the better. They make their products and services stand out through their unique offerings. Steve Jobs, for example, revolutionized the mobile phone industry and created new benchmarks.

Various kinds of entrepreneurship act as a lens to understand different types of entrepreneurs.

Exploring The Types Of Entrepreneurs

You can classify different types of entrepreneurs, depending on the nature of business, the stages of development and motivational aspects. Let’s discuss each of them.

Classification Of Entrepreneurs: Nature Of Business

In relation to the nature of businesses and business environments, here the various types of entrepreneur:

They come up with new ideas for products and services and start a venture to pursue those ideas. They can be found either in small business units or big enterprises. Within large enterprises, individuals leading important projects are business entrepreneurs.

They exhibit innovative skills in the organization and management of corporate undertakings. They develop new business, products and services in an existing organization. They create opportunities for business growth.

They are focused on providing services to customers and clients. They generate profits by rendering services. For example, someone who runs a hotel is a service entrepreneur.

They focus on industrial and production activities. They identify customer needs and expectations and manufacture products that meet those demands. They’re product-oriented.

They focus on changing society by solving recurring challenges that need unique business solutions. They focus on social issues and aren’t profit-oriented. An example of this could be someone who creates an assisted living facility for seniors.

Classification Of Entrepreneurs: Stages Of Development

According to stages of social and economic development, there are several types of entrepreneurs.

1. First Generation Entrepreneur

They set up an enterprise, thanks to their innovative skills, idea and vision. They combine various factors of production and adopt innovative ideas to produce products and services that are suitable for the market. They start a business completely on their own.

They’re also known as dynamic or modern entrepreneurs. To meet changing industry and market demands, one needs to stay updated. Innovative entrepreneurs look for changes and ways to respond to those changes.

They inherit a family business or gain experience by working closely with their families. Sometimes they diversify and seek new opportunities in the family business. For example, Mukesh Ambani—one of the most successful entrepreneurs of India—grew his father’s business. 

Classification Of Entrepreneurs: Motivational Aspects

Depending on the role and motivations of an entrepreneur, let’s see how different types of entrepreneurs run their businesses.

A hustler is someone who is a self-starter and they’re willing to push their boundaries. They start small and have the ultimate goal of growing and becoming bigger in the future. They’re highly motivated by their dreams and aspirations and develop a laser-sharp focus to concentrate on long-term goals. They will try anything to succeed and therefore, come across both setbacks and opportunities.

They are always looking to make a product or service better. They are part innovators and part hustlers. They know how to make an existing idea better. This helps them gain a competitive edge in the market. For example, before TikTok entered and dominated the market, there were several other applications such as Musically. However, the people at TikTok provided a more accessible version and secured major market shares.

Despite having an idea, researcher entrepreneurs take time to gather relevant information and make a strong case for their product or service. For them, failure isn’t an option and they’re focused on proving their idea from every angle. They usually take a lot of time to launch their product and make decisions because they prioritize detailed work and deep understanding. They’re a stickler for rules and have a sound plan in place.

From the above list of entrepreneurs, do you know what type of entrepreneur you want to be?

What Type Of Entrepreneur Are You?

No matter what type of entrepreneur you are or you want to be, there are several characteristics and skills that successful entrepreneurs have in common. If you want to pursue your dreams and be the own boss of your enterprise, here are several qualities you should prioritize:

• A clear vision gives purpose and can help you stay focused. Dream big and envision a new reality.

• Solve for challenges in society. Your business idea can be solely profit-oriented but find ways to give back to society.

• Effective entrepreneurs have faith in their ideas, abilities and themselves. Ask the right questions, come up with ways to answer them and prepare to tackle challenges along the way.

• Always get the job done. Being passionate about results is a hallmark of a successful entrepreneur. Conceptualize ideas and turn them into actions that have an impact.

• New businesses need a lot of support and hiring the right people makes a lot of difference. Be open-minded and attract people who are ready to challenge and support your business ideas.

It’s clear that no matter what type of entrepreneur you are, you need to lead yourself on the path of success. Harappa’s Leading Self course will teach you how to take ownership and make room for new learning opportunities. It will help you improve your performance by overcoming internal and external obstacles in the way of your true potential. Cultivate a growth mindset and step outside your comfort zone. Be the entrepreneur you’ve always aspired to be!

Explore Harappa Diaries to learn more about topics related to the LEAD habit such as Meaning Of Entrepreneurship, How To Become An Entrepreneur, Characteristics Of An Entrepreneur & The Latest Skills In Demand to take a step towards becoming your best self.

Which of the following is not a classification entrepreneur?

What are the classification of entrepreneur according to business?

What are the 4 types of business entrepreneurship?

Which is not of an entrepreneur?