Your thoughts, experience, and career trajectory seem to be moving you toward various types of entrepreneurship, yet you wonder if you’re cut out for it. True, the potential rewards are great, personally and financially, but the pitfalls give you pause.
You may already know that more than nine of every ten new businesses fail, and you are appropriately sobered by that daunting statistic.
You’re a risk-taker. Your professional track record indicates a nonstop drive toward success. You don’t like the idea of operating successfully within an insulated bubble. Instead, you’re all about finding ways to contribute to solving real-world problems.
The 4 Primary Types of Entrepreneurs
If that sounds like you, consider the four most common types of entrepreneurs. Ask yourself some basic questions as you do your research, collect assets, and marshall your talents.
Since the overwhelming majority of entrepreneurs will choose to become small business owners, this category will be covered first and in the greatest detail.
1. Small Business Owner/Operator
Far and away, small business owners/operators are the most common type of entrepreneur. Small- to medium-sized businesses (SMBs) represent more than 99% of all entrepreneurial enterprises.
This type of opportunity is vastly appealing for many reasons, though enhanced freedom consistently ranks near the top. There’s no shortage of hard workers who prefer to be their own boss, and SMBs play a crucial role in keeping the economy healthy.
PRIMARY CHARACTERISTICS OF THE SUCCESSFUL SMB OWNER/OPERATOR
However, being your own boss is also something of a double-edged sword. Being your own boss means you are typically your sole source of accountability.
This is the primary reason “hard worker” should be considered the No. 1 non-negotiable characteristic before considering this as a career objective. If you’re not a self-starter, think long and hard before you begin investing in opening a new business.
Ask Yourself: Am I truly a self-starter at heart? Do others who know me well agree with that self-assessment?
There are several personality tests you can take, many of which are free and accessible online. Submitting yourself to the process can provide great insight.
You will need capital and a business plan, of course. But always remember that the primary asset you bring to any venture is yourself. Every successful enterprise starts with at least one tireless, indefatigable champion.
Another valuable trait common to the successful SMB entrepreneur is the ability to pivot and adapt to changing conditions.
The past few years have provided a hard lesson regarding what happens when an immediate need for flexibility encounters entrenched resistance. The three-month period of February through April 2020 represented the single most significant loss of business owners ever, with 3.3 million shuttering their operations.
In the 21st century, resisting change with a “We’ve always done it this way!” attitude just won’t cut it.
Ask Yourself: What is my immediate response when confronted with changes I did not anticipate? Do I tend to get more emotional than analytical?
An instinctive emotional response doesn’t preclude you from SMB success. Instead, you are merely trying to become more self-aware and make allowances for any weaknesses you discover.
For example, let’s say you know you tend to react much faster than you respond. Knowing this to be true about yourself, you could institute a self-policing policy to counteract this tendency. Anytime a decision is required in the face of unanticipated circumstances, you simply force yourself to go on a 20-minute walk before responding.
The final must-have personality characteristic for the would-be small business entrepreneur is persistence.
Many are familiar with the famous quote of Thomas Edison, who took a very different approach to his lack of immediate success:
“I have not failed. I’ve just found 10,000 ways that won’t work.”
As a budding entrepreneur, you will undoubtedly encounter obstacles and setbacks. Keep your vision in mind as you move forward, adjusting expectations as needed.
Ask Yourself: How do I respond to frustration and failure?
Pay attention not only to what is being said but also to your emotional response to it. Do you get defensive? Do you immediately begin refuting the assertions?
2. Agent of Social Change
There’s a lot of interest in social advocacy. More and more professionals are not content with only earning a good living.
The sweet spot is finding work that harnesses your skill set and makes a positive contribution. Being driven by a cause more significant than oneself helps keep the fire stoked when facing setbacks.
PRIMARY CHARACTERISTICS OF AN ENTREPRENEURIAL AGENT OF CHANGE
If you find yourself relentlessly questioning established customs and practices that almost everyone else seems to accept, you just might have what it takes to be a successful agent of change. This is especially true when long-accepted behaviors come with a trade-off that causes serious downstream problems.
Ask Yourself: What am I passionate about? What opportunities might there be to effect positive change and simultaneously make a profit?
Are you aware of any downsides to the industry in which you make your living? What sorts of complaints do others make about your business?
Social entrepreneurs tend to pay close attention whenever they encounter issues that many will brush off as “someone else’s job.”
Entrepreneurs who seek to become agents of positive change anticipate opposition but are not easily dissuaded by naysayers. Instead, they sift through feedback, looking for any random pearls of wisdom they might have overlooked.
In short, this type of entrepreneur finds value where others might come up empty.
3. Innovator Within a Larger Company
For many mid-career professionals, working to effect mutually beneficial change within a larger company is a more viable option. This avenue is especially appealing to those who may not be in a position to take on the risks associated with solo entrepreneurship.
Possible innovations might include working with the C-suite decision-makers to partner with a local nonprofit, starting a foundation closely aligned with company products and services, or suggesting alternative uses for resources that might lie dormant occasionally.
PRIMARY CHARACTERISTICS OF A LARGE-COMPANY INNOVATOR
Certainly, spotting areas of waste within any organization is an opportunity either to repurpose unused resources or at least reduce future supply orders. An entrepreneurial spirit keeps one eye on the bottom line while actively considering the welfare of its community.
Above all, a large-company entrepreneur will be equally skilled at cultivating relationships with executives and factory floor employees. The ability to form a coalition of supportive employees across an entire organization is a primary feature of this type of innovator.
Ask Yourself: Is my company making a positive impact on the local community? Which efforts am I personally willing to spearhead?
Beyond providing jobs and an expanded tax base, where can this company reasonably hope to make a dent without jeopardizing revenues? Is my company already participating in local efforts to improve sustainability, affordable housing, or overall quality of life? How can these efforts be augmented or enhanced?
4. Founder of a Scalable Enterprise
This type of entrepreneur starts a new venture with an existing exit strategy. In other words, the success of their startup is only the first step in a chain.
After the new business has launched, the founder works to shore up the stability of the “mother ship.” The initial offering is then available to potential investors looking to replicate its success. Ultimately, the founder may even plan to divest themselves and move on to another challenge.
Benchmarks for moving forward with a scalable enterprise would be a high margin of profit, pent-up demand for the product or service, and enthusiasm on the part of potential investors.
Silicon Valley, for example, serves as the most obvious case in point. Many of today’s technology giants started in someone’s garage or spare bedroom, only to scale up as revenue, interest, and market response grew.
PRIMARY CHARACTERISTICS OF THE FOUNDER OF A SCALABLE ENTERPRISE
Of all four types of entrepreneurs, seeking to be the founder of a scalable startup is almost certainly the riskiest. While you could easily have a great idea that hasn’t been exploited to its full potential, it’s a safe bet that competition will be intense and unrelenting.
Entrepreneurs who scale successfully tend to be that rare type who is equally adept at both right- and left-brain thinking. If not, they tend to have a partner with whatever skill set they lack.
Ask Yourself: Do I have an idea for a product or service that could significantly improve other people’s lives? Have I come up with something that is both innovative and unique? How might this concept play out in other markets?
Do I have access to the people and resources I need to pull this off? Have I found enthusiastic partners? Who is laying their money on the table? Am I willing to face intense competition and keep plowing forward?
Scalable businesses typically require more investment on the front end. As a business grows, the percentage of profit should go up.
Various Opportunities, Various Types of Entrepreneurs
Of course, these four primary types of entrepreneurs are not fixed and immovable.
For example, an innovator in a large company might one day cross over to founding their own business. Some entrepreneurs will do both at the same time. There are literally as many different paths to entrepreneurial success as there are innovators willing to dive in.
Start with a fearless and rigorous self-assessment. Be realistic about who you are and what drives you.
The challenges associated with entrepreneurship will require intrinsic motivation as you plan, pivot, regroup, and ultimately succeed.
Source: Kimberly Zhang