Different Types of Entrepreneurships
Entrepreneurship is the process of creating a new enterprise, or building upon an existing one, with the aim of providing a product or service to customers for profit, while accepting and managing the risks that come with it. There are four main categories of entrepreneurship:
Small business entrepreneurship
A small business refers to a business with no major expansion plans in the mid-term. It is also the most common type of entrepreneurship. Small businesses usually own their business and tend to first utilise their own funds and manpower. They only turn to alternative financial sources such as bank loans if they are unable to sustain the business on their own. Examples of small businesses include a single location restaurant, or a retail shop. Such businesses do not set out to achieve high profit margins, though there is a possibility of expansion on the back of significant success.
Note: In Singapore, Small and Medium Enterprises (SMEs) are defined as companies with fewer than 200 employees, or a turnover of less than $100 million.
Scalable startup entrepreneurship
Scalable startups are companies that innovate with a single unique idea, product, or service, with the intention of continuously growing the company and scaling up. Unlike small businesses, they generally start with high costs and limited revenue, though their eventual aim is to achieve rapid growth and maximise profits. As such, these companies often require heavy funding from venture capitalists and angel investors to drive growth and expansion in multiple markets. Many well-known companies in the technology sector today germinated as scalable startups – such as Amazon, Shopee, Grab and Facebook.
Large business entrepreneurship
Large business entrepreneurship refers to established businesses that practise consistent innovation to create new products and services that meet customers’ evolving needs and expectations. These could include the setting up of new business divisions created within the existing company, or the takeover of smaller businesses with the know-how to meet the needs of existing target markets. For example, Google’s parent company, Alphabet, acquires smaller businesses and further develops and integrates their products into Google services, such as YouTube, Android and Waze.
Social entrepreneurship differs slightly from the other models mentioned here, as social entrepreneurships are more change-driven than profit-driven. These companies are motivated by their desires to make a positive impact in the world and improve the lives of others. Hence, these companies could be for-profit, non-profit, or a hybrid of the two. They also may not follow conventional business approaches. The causes of social entrepreneurships are varied and run the gamut of socio-cultural to environmental to economic issues. For example, enterprises such as The Art Faculty, Project Dignity, and Eighteen Chefs empower the differently abled, less privileged and marginalised communities through employment, while others such as Ocean Sole support marine conservation by repurposing trash from the ocean into flip-flop art.
Empson, Rip. “Yahoo and Google are Both Spending Big Money on Acquisition Sprees and What That Says About Their Futures”. Tech Crunch. Published 29 July 2013, https://techcrunch.com/2013/07/29/yahoo-and-google-are-both-spending-big-money-on-acquisition-sprees-and-what-that-says-about-their-futures/
Gale. “Entrepreneurship: Entrepreneurship Topic Overview”. Accessed 17 August 2022, https://www.gale.com/open-access/entrepreneurship
Hayes, Adam. “Entrepreneur”. Investopedia. Updated 19 July 2022, https://www.investopedia.com/terms/e/entrepreneur.asp
Nalinee. “2020 Singapore SMEs Statistics”. Invoice Interchange. Published 28 May 2020, https://www.invoiceinterchange.com/2020-singapore-smes-statistics/
Needle, Flori. “The Eight Types of Entrepreneurship (& Companies That Exemplify Them)“. Hub Spot. Updated 1 February 2021, https://blog.hubspot.com/sales/types-of-entrepreneurship
Rosoff, Matt. “Google’s Biggest Acquisitions So Far, and What They Became”. Gizmodo. Published 16 August 2011, https://www.gizmodo.com.au/2011/08/googles-16-biggest-acquisitions-so-far-and-what-happened-to-them/