I am pretty sure most of this blog’s readers know what entrepreneurship means and what an entrepreneur is. But for the sake of not assuming, let’s briefly discuss the different types of entrepreneurs behind the businesses.
An entrepreneur is defined by Wikipedia as “a person who has possession of a new enterprise, venture or idea and assumes significant accountability for the inherent risks and the outcome”. I define an entrepreneur as anyone who identifies and executes on an opportunity with the intention of growing his or her investment. Entrepreneurship therefore is the activity conducted by the entrepreneur to meet his or her goals and objectives.
What used to be mostly an art is now mostly Science. With extensive studies conducted on success stories overtime, scholars have identified consistent traits that define a successful entrepreneur and characteristics that make entrepreneurship successful. These characteristics apply to different types of entrepreneurs in all areas of business. As a result, major Universities and Colleges today have dedicated entrepreneurship programs for students who aspire to become successful entrepreneurs some day.
Entrepreneurship comes in many forms. It is important to note that although entrepreneurship has a general connotation, the entrepreneur behind any venture has a unique risk profile. In other words, Entrepreneurs choose a level of personal, professional or financial risk to pursue opportunity.
All types of entrepreneurs are like any prudent and responsible human being, they too have a level of risk they are willing to accept. This varies on the individual’s personal situation and the stage of life they are at. For example, a single individual is more likely to bear higher financial risk when compared to a married couple with only one working spouse.
Regardless, all the different types of entrepreneurs identify a market opportunities and fill a void by putting their resources (time, money and otherwise) effectively to accomplish this outcome. Some prefer to access other people’s cash so to minimize personal risk. This type of funding is generally referred to as angel funding, or venture capital / private equity on a much larger level. Others prefer creating something from nothing by investing sweat equity.
Brick and mortar – these are the most common types of entrepreneurs, often times the neighbor down the street who owns a dry cleaners in the community. Similarly it could be a gas station, a restaurant, a clothing store, salon, pizzeria, you name it. This is conventional entrepreneurship in the minds of many, and usually the first avenue a new entrepreneur resorts to in most cases.
Internet based – the modern, more tech savvy types of entrepreneurs are attracted to starting some sort of a business online. Whether it is an info based website, an affiliate based website, a blog, or doing business on ebay, doing business online has several advantages. You can start operating overnight on a very small budget. I tend to classify freelancing / independent consultancy services into the internet based model because most client – consultant introductions take place on the internet.
E-tailer – this is a specific type of an internet entrepreneur who sells merchandise online. Ebayers are considered e-tailers, as are those who own their own websites. E-tailers typically buy up goods in bulk and sell them for a profit online. Others are drop shippers, who sell someone else’s goods and collect a commission for each sale.
Info-preneurs – also another breed of an internet entrepreneur, an info-preneur is someone who profits from selling information. Whether through physical books, audio books, digital or e-books, video tutorials, an info-preneur’s most valuable asset is his or her human capital. He or she is able to sell what they know for a profit through any of the mediums mentioned. I have classified these guys under internet based entrepreneurs because most of them typically sell their products online.
Investors – these types of entrepreneurs are typically ones with some cash who prefer passive investing by buying companies (or stock in companies), investing in real estate properties, trade in the stock market or lend to other entrepreneurs for a return on investment (interest rate). The more sophisticated guys who deal with big dollars are your Venture Capitalists and Private Eqyuity firms.
Some types of entrepreneurs prefer to be Passive while others prefer to be Actively involved in the business. Typically, those early in their entrepreneurship career (who have not won the lottery yet) tend to be Active, while those who are seasoned and have experienced prior success tend to become passive investors and invest some of their previously earned capital in various ventures. This is not a rule by any means, rather a trend you will commonly find among entrepreneurs.
This is a matter of personal opinion. For someone who has travelled quite extensively, in my opinion there is no better and easier place to start a business than the United States of America. A Nation built on the principles of Capitalism, there is no better place than the USA to pursue your entrepreneurial dream.
Business incorporation procedures are very easy, and can typically be handled on your own without having to pay expensive attorney fees. The same goes for obtaining an Employee Identification Number (EIN) – which is your business ID, and opening a business bank account. You can be up and running within a couple weeks. Sure the tax code is a bit complex, but the US also has some of the best CPAs – (totally not a biased statement 😉 ) to help you navigate through the maze.
All that aside, borders and jurisdictions have never stopped entrepreneurs from seizing the opportunity and taking advantage of it. I know you have some level of entrepreneurial spirit inside you, or you wouldn’t be reading this blog. The question is, which type of an entrepreneur are you today? Which one do you want to become?
Read my additional thoughts on the business models different types of entrepreneurs choose to engage in.