What are the 4 Types of Entrepreneurship?
With the rise of the gig economy and increased demand for contract workers, there are more freelance workers than ever. But entrepreneurs have always existed. A 2018-2019 report from the Global Entrepreneurship Monitor (GEM), sponsored by Babson College and Baruch College, found that 27 million working-age Americans were starting or running new businesses. To put it in context, this represents almost 14 percent of all working-age Americans.
You may be thinking of starting a business yourself but did you know that there are four main types of entrepreneurs? Or maybe you need to rewind and start with what is entrepreneurship?
What is an entrepreneur?
An entrepreneur is a person who is taking steps to launch, develop and run a business venture while taking on the financial risks associated with running a business. When you consider that the percentage of startups that fail after four years in the U.S. is over 50 percent, you get an idea of the risks. Entrepreneurship is a very important part of the economy and there are always going to be people willing to follow their dreams.
What are the 4 types of entrepreneurship?
It turns out that there is more than one kind of entrepreneurship. Let’s take a look at the four major types.
1. Small business entrepreneurship
In the U.S., 99.7 percent of all companies are small businesses and they provide employment for half of all non-governmental workers. These businesses exist to provide services like hairdressing, carpet repair, etc. and provide a living to the business owner(s) and their employees. Small businesses are typically funded by personal savings, loans or gifts from family or friends, and small business loans.
2. Large company entrepreneurship
Large companies sometimes run into situations where they want to develop new products that are variants of their core product(s) in order to meet changing consumer demand. Companies may accomplish this goal by partnering with or buying innovative companies. Think large tech companies, etc.
3. Scalable startup entrepreneurship
Scalable startup is for entrepreneurs who believe that they have discovered or created the next “big thing.” They seek funding from venture capitalists that allow them to make investments like hiring great employees to launch their idea. Once the business model is created, they must seek further venture capital funding to grow the business. This is a high risk, high reward/failure situation.
4. Social entrepreneurship
A social entrepreneur seeks to create and provide products and services that better society. Their main goal is to solve social needs and problems, rather than to focus on profit or become wealthy. Social startups can be non-profit, profit or a hybrid. Examples include businesses that are working to provide special tents to homeless people.
As an entrepreneur grows their business, they may be ready to hire employees and provide employee benefits. Money is tight for most small businesses and startups, not to mention a lack of time to handle anything outside of growing the business. PEOs area a great solution for entrepreneurship! When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!