7 types of entrepreneurs

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?

1) Home-based

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.

2) Internet-based

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.

3) Lifestyle

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.

5) Social

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.

 

 

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The seven types of entrepreneurs

types_of_entrepreneursJust like there isn’t one type of business, there isn’t just one type of entrepreneur. Entrepreneurship can be experienced in a range of different ways. Here are seven of the most common types of entrepreneurs.

Home-based entrepreneurs

Home-based entrepreneurs are self-employed, working alone or with just a few employees. As you can probably guess, the business is based out of their own home or in a home office. Flexibility and autonomy are what these business owners crave. Also, the freedom to do things like arrange a child’s dentist appointment or run errands at lunchtime is a must. These businesses typically don’t have a storefront, street advertising signs or customer parking. Examples of home-based businesses include bookkeepers, photographers and graphic designers.

Internet-based entrepreneurs

Internet-based entrepreneurs run their business online and use information and communication 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 of internet-based businesses include Amazon.com, eBay and iTunes.

Lifestyle entrepreneurs

Lifestyle entrepreneurs create a business to further their own personal goals instead of make a lot of money. These entrepreneurs may pursue a cash-generating hobby during their spare time or create a business around one of their interests. These businesses usually aren’t intended to be high growth, and usually have few employees. Examples of lifestyle businesses include a secondhand book store, or a small market stall selling homemade baked goods.

High potential entrepreneurs

High potential entrepreneurs usually run large companies employing somewhere between 20 and 500 people. These companies are often very fast-paced and experience high growth rates. They often develop and produce the latest technologies and innovations. Most start-up activity involving high potential entrepreneurs is technology and internet related. Access to funding is often easier for these companies. Examples of high potential businesses include quickly-growing technology companies and large internet technology businesses.

Franchise format entrepreneurs

Franchise format entrepreneurs open a franchise or chain in the local business area, complete with support and direction from the franchisor. These entrepreneurs stay within the lines and structures of their franchise and appreciate the lower risk that follows. They are not concerned with the lack of freedom and autonomy that comes with owning a franchised business. There are a wide variety of franchises ranging from service franchising like Century 21 real estate, product franchising like Goodyear Tire Stores and business format franchising like Tim Hortons.

Venture capital entrepreneurs

Venture capitalists invest in ventures, through managerial and technical expertise as well as with actual money. Venture capitalists are very selective about which companies to 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 of venture capitalists can be seen on CBC’s Dragons’ Den, as well as in large companies like those in Silicon Valley.

Social entrepreneurs

A social entrepreneur measures success by the impact that he or she has on society. Highly passionate, the greater good of the community is their primary interest and they create a business to provide solutions to social issues. These entrepreneurs 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 include KickStart international and the Grameen Bank.

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Perks and snags of internet or home-based businesses

You’re thinking of starting a home-based or internet business and have been daydreaming of finally making your own schedule and doing only the things you want to do. But wait! Running a home-based business or internet business can be very liberating, but there are some things to keep in mind before you dive in. Here are some perks and snags associated with internet and home-based businesses:

Perks of a Home-Based Business

  1. You’re able to work around things like doctor’s appointments, going to the gym and walking the dog. If you work from home, you may be able to take time out to do more enjoyable tasks like taking a long lunch with a friend, dipping into the pool or taking a walk around your neighbourhood. These breaks might help you to be more productive when you get back to your work. Working from home, or working with an internet-based business, allows you to have more flexibility in your workday.
  2. The dress code is not an issue. As long as you don’t have to meet with clients or customers, you can work in jeans, sweatpants or even pyjamas. If you conduct video conferences on a regular basis, you may only need to wear something work appropriate from the waist up – be careful not to rest your feet on your desk and reveal your bunny slippers!
  3. Working from home or running an internet-based business can potentially save you a lot of money. Aside from the cost of commuting, you could save on childcare costs and office rental fees. You’ll also save time not having to drive two hours into the city and back through rush hour traffic – which can also help save your sanity!
  4. Canada Revenue Agency allows you to write off some of your home expenses as a tax deduction when you work from home. These can include supplies, equipment and the space of your home office itself. Visit their website for more details.

Snags of a Home-Based Business

  1. Working from home, without any coworkers or managers to hold you accountable, means you’re going to need a lot of self-control. There are countless distractions: family; friends; visitors; pets; cleaning; cooking; phone calls; not to mention your comfortable couch and your Netflix queue. Working from home may present too many interruptions for you to be successful and productive in your home-based business. You may also find it difficult to leave your work behind at the end of the day since your work is always just in the other room. You’ll need extra willpower to step away from your computer.
  2. Depending on the relationships your business has, it may be difficult to appear credible to suppliers or customers if you’re working out of your home. You may have to hold meetings at the local coffee shop or restaurant, which may not be the way that some businesses or customers prefer to operate.  Investigate virtual office locations or find out if there are organizations in your area that rent boardroom space.
  3. Zoning regulations in your area may prevent you from operating certain types of businesses from your home. Check your city’s government regulations to make sure you can legally run a home-based business.
  4. If the internet goes down or your phone system is on the blink, it’s down to you to fix it. Calling the building superintendent won’t be an option, which can be especially frustrating when your business relies on these types of communication.

Here are some tips for successfully working from home as well as a list of permits and expenses for home-based businesses.

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