Entrepreneur: What Is It and What Types Are There?

There are people who walk among us with a unique vision for life. They are bold and brave. They want to make a change. And they have the grit to withstand all obstacles to make their vision come alive. 

Two centuries ago, people bartered and apprenticed for their professions only to stay in them for the rest of their lives. 

Entrepreneurs, on the other hand, are innovators. Those who are not satisfied with the status quo. They’re on a mission to change the world and even the way we think about certain things. 

But what is an entrepreneur? Let’s take a closer look.

What Is an Entrepreneur?

Let’s start from the basics. What’s an entrepreneur in the first place? The majority of definitions of this term talk about idea development via careful market evaluation, starting a business, filling a gap in the market, and scaling or growing to meet more needs whilst making a profit.

The U.S. The Economic Development Administrationdefines entrepreneurs as individuals who “catalyse growth, create jobs, and increase U.S. competitiveness”. 

In short, aspiring entrepreneurs start a business venture and establish business ownership by turning their ideas into reality. No matter whether the goal is to create their own small business or to set up large entrepreneurial ventures, the role of the entrepreneur is to take an idea with commercial value and bring it to life for others to take advantage of. 

In a lot of cases, entrepreneurs who are small business owners invest their own money into the new business or rely on small business loans. They develop the business idea by conducting market research and being able to identify trends and market demand. 

With a solid business plan and a proven marketing strategy, entrepreneurs can overcome industry challenges and run a successful business whilst creating a personal brand and achieving financial security. 

Now that we’ve covered the entrepreneur’s meaning, let’s look at how the process of entrepreneurship, which is the practice of being an entrepreneur, works.

How Does Entrepreneurship Work?

Now that we’ve defined what an entrepreneur is you’re probably asking yourself how entrepreneurship works in essence.

To answer this question, it’s key to note that there are different types of entrepreneurs. 

These are the startups and the small business entrepreneurs. 

Startups entrepreneurs are disruptors in the market. They take a societal problem, a common point that they’ve identified, and resolve it with the ultimate aim of scaling the business and making a profit.

Small business entrepreneurs, on the other hand, are those who range from freelancers to retailers and shop owners. These are the small business owners who start and run coffee shops, restaurants, hotels, B&Bs, and more. 

The latter have taken an idea that works and have replicated it, giving it their own twist to again make a profit by offering customers a product or a service that’s in demand. 

Naturally, entrepreneurs tend to grow and scale their small businesses or startup ventures in different ways, based on their available resources, goals, and other factors.

Entrepreneurship Types

Speaking of entrepreneurship types, let’s delve deeper into this fascinating topic. 

Below, we take a look at some of the most common types of entrepreneurship and point out their differences. We cover cultural, ethnic, feminist, and other approaches to entrepreneurship.

Cultural

Cultural activities can be turned into business enterprises, and cultural entrepreneurship is one way to do so. 

Here, based on entrepreneurship, cultural products and services are designed and delivered. Examples of such products can be artistic works and paintings, theatre plays or literary pieces while cultural services may include, for instance, events in the music, film or sports industry. 

The entrepreneurs involved in this type of activity are often considered “cultural change agents”. 

Ethnic

Another type of entrepreneurship is ethnic. It is essentially creating a new business for ethnic minorities or one that will serve a specific community or leverage unique cultural skills, products, or networks. 

Examples of such business ventures may include creating food or beverages aimed towards a specific cultural group or the development of AI products which preserve the language of diaspora communities spread around the world.

Feminist

These are “for women, by women” enterprises with the goal of reaching equality through collaboration to improve the lives of women around the world. 

Oftentimes, female entrepreneurs start such new businesses that are aimed towards the specific needs of women such as gynaecological health products or women-only social media platforms. 

Institutional

The creation and transformation of new or existing organisations is the main goal of an institutional entrepreneur. 

This can be done by pooling resources together or inspecting their human resources as factors for changing institutions or creating new ones. 

Millennial

The Millennial generation was born between the years 1981 and 1996 and is one of the first to have grown up with technological advancements. 

The individuals in this group are curious and adaptive and can generate great ideas for others. One example of a Millennial entrepreneur who has turned into one of the most eminent industry leaders is Facebook’s Mark Zuckerberg. 

Nascent

A word that means “just coming into existence and displaying signs of a future potential” can also refer to entrepreneurs who are in the beginning phases of developing their businesses. 

This may mean solidifying ideas, covering business expenses for purchasing inventory, hiring staff, renting premises, choosing a legal structure, and more. We can relate this type of entrepreneurship to pretty much any small business owner who is just getting started. 

Project-Based

Project-based enterprises usually have a set lifespan and once the project is complete, an entrepreneur continues to apply their efforts elsewhere to another project.

For example, in construction, once a house or a building is complete, there’s no more work to be done. Therefore, the entrepreneur needs to look at other opportunities to continue generating revenue and profits. 

Social

Although not necessarily profit-driven or oriented, social entrepreneurship refers to an entrepreneur’s interest in a social, cultural, or environmental cause. 

Under this form of entrepreneurship, the business can manifest itself in non-profit projects or projects with a more social cause. 

One example is a restaurant with a social cause that has a for-profit aim, which is then pumped into a community of homeless people who are employed at the restaurant to help them earn a living. 

Biosphere

Finally, the biosphere model of entrepreneurship is one where the entrepreneur will consider aspects that are beneficial to the biosphere or environment. 

Under this “business model”, they will try to capitalise on these opportunities to make a profit while helping the environment in a chosen way.

History of Entrepreneurship

While it’s difficult to pin down exactly when entrepreneurship started,there are some emerging themes in the history of entrepreneurship that are worth looking at.

These are the factors of trade, the advent of stable communities and specialisation, the formation of markets, and the developing needs for independent career paths. 

We look at each one in turn. 

Trade

It is believed that merchants and traders were the first entrepreneurs and their success was the foundation of entrepreneurship as we know it today. 

Largely driven by advancements in communication between countries and improvements in transportation, trade developed and spread across communities and borders, while generating wealth and opportunities. 

Stable Communities and Specialisation

From tribes to stable communities, leaders of such communities developed strong leadership skills, which is a characteristic that entrepreneurs of this day and age possess. The idea of communities also has not gone away as nowadays many businesses seek to be the leaders of their own groups of fans. 

Furthermore, as the earliest civilizations were forming, humans were discovering different tools or crafts and realised they could exchange them for food and resources. This prompted them to specialise in a given niche, which has still maintained its essence even nowadays. Modern-day entrepreneurs are, indeed, still relying on human creativity to create a unique idea and concentrating on its fulfilment. 

Market Formation

After stable communities, markets started forming actively. There came an ever greater need for improved ideas, innovation, and leadership. One reason for this was the increased competition and the aim of gaining higher profit shares.

Risk-taking, as a characteristic of entrepreneurship, also gained traction.

Independent Career Paths

Job security became an ever more important element in terms of survival and well-being and living a settled life. 

However, some individuals (think entrepreneurs) either faced difficulties in finding jobs or sought to leave jobs and careers to pursue self-employment and give life to their own ideas by creating a new business. 

Perks and Challenges

Being a curious, creative, ambitious, and innovative entrepreneur comes with a variety of advantages, but that’s not to say there aren’t challenges, too. 

As a starting point, entrepreneurs create jobs, innovate, create change, and give back to society. As their own leaders, they can work flexible hours from anywhere. They also often create new economic growth, which adds to the national income and budget, which is then spent on social expenditures, amongst other things. 

However, this also means that by being their own boss, all the responsibilities of their business fall on their shoulders. 

While entrepreneurs may be motivated by a desire to make a difference, their ambitions can sometimes face resistance, where breaking into a particular industry can be daunting. Many would-be entrepreneurs feel this pressure but persist because they don’t fit well in a traditional corporate setting and would rather build something independently.

Setting up a business also requires significant investment capital to cover expenses. This makes fund management incredibly important, while unnecessary costs must be cut down to a minimum. 

Not to mention that financially supporting a growing business can demand specific financial resources, like venture capital. 

From public liability insurance to business income insurance and data breach policies, your new entrepreneurial dream also requires proper protection.

What Are Some Examples of Good Entrepreneurs?

A “good” entrepreneur is hard to define, but it is possible to measure their business’ success in order to determine their levels of success. 

Some examples of good entrepreneurs include the well-known Walt Disney from The Walt Disney Company.

Some particular challenges he faced included theft of his work and many commercial failures. Despite this, Disney continued to persevere and remained committed to his vision, ultimately resulting in his success. 

Mark Zuckerberg, well-known as the founder of Facebook, also faced significant challenges before starting one of the world’s biggest social media platforms. Remaining true to his vision, he is now worth over $80 billion.

Other successful entrepreneurs that are also popular for their achievements are Jeff Bezos, the founder of the ecommerce marketplace Amazon, and Sara Blakely, who started the Spanx brand in 1998, creating women’s wear. 

What Characteristics Does an Entrepreneur Have?

Few entrepreneurs thrive in the marketplace without the entrepreneurial personal attributes. 

Here are some of the commonly encountered character traits of an entrepreneur:

• Versatility;
• Flexibility, 
• Money savvy;
• Resilient;
• Focused; 
• Business smart;
• Effective communicators.

These, apart from other characteristics, are what sets them apart from the average self-starter.

Successful entrepreneurs usually have a very clear vision of where they’re going, and a determination to get there bolsters this. They find opportunities in challenges, and they’re happy and committed to solving problems. 

This makes them inspiring leaders to look up to as they drive processes forward for both commercial success and societal change.

How to Become an Entrepreneur

There are many routes to becoming an entrepreneur and there’s no one set way of going about it. 

However, some common themes emerge when it comes to the starting of the process of entrepreneurship, and one of these is starting out by ensuring there’s financial stability. This does not mean going after quick money, but ensuring that value is provided to end customers whilst growing a steady stream of revenue to help expand and scale the business further. 

Another theme is building a diverse skill set. When starting out, an entrepreneur will be the boss, the secretary, customer support, a delivery person, and more, taking on all the roles possible in their business as they set out to hire more staff. 

From bookkeeping, accounting, and finance to production, deliveries, and customer service, an entrepreneur needs to be familiar with it all, hire employees to carry out these tasks or be willing to personally do most of them. Even the simplest tasks such as getting a business bank card or opening a new merchant account for processing payments at their new store, requires the attention of entrepreneurs.  

This means they need to have a deep knowledge of all the tasks required to run their business or at least be willing to learn most of them and to hire staff that can do this for them at a later stage. 

Next up is staying motivated and continuous learning. This can come through the consumption of content across multiple channels. 

Whether it’s reading books or listening to podcasts, enriching one’s knowledge and entrepreneurial skills is a crucial part of staying competitive. Discovering trends and new ideas, building on one’s knowledge base, and gaining a fresh perspective on problems they can solve is a great step to staying ahead of the curve. 

Networking is another key component of starting up as an entrepreneur. It’s crucial for them to get together with like-minded individuals who can help support them through mentorship and advice. Meeting the right people can help an entrepreneur make new contacts, discover a new client base, find the right suppliers or financiers, and more. 

Finally, entrepreneurs need to lead by example. They’re the leaders of their businesses and carrying out daily tasks will not lead to success. They need to ensure they’re always thinking ahead, working hard, and motivating employees to achieve their full potential.

It’s worth noting that these are traits of former successful entrepreneurs. In a lot of individuals, entrepreneurship is a natural trait that can be further developed and refined to achieve higher results with other human characteristics and skills. 

Conclusion

Entering the world of entrepreneurship can seem like a daunting task for some, while for others, it’s interesting and exciting. 

Entrepreneurship comes with many advantages, the least of which is flexibility and more freedom to make choices that are best for the business. While there are some downsides, too, it’s crucial for entrepreneurs to focus on solving customer pain points or addressing societal issues to help them get ahead.

The world of entrepreneurship these days comes with intense competition. There are over 500 million entrepreneurs around the world. Therefore, constant innovation is needed to ensure that they continue to stay ahead of the curve and remain competitive.