Did you know that there are different types of entrepreneurs?
Each type of entrepreneurship reflects unique challenges, opportunities, and skills that will impact how you run your business. Understanding which entrepreneur you will be (or currently are) prepares you to take the right steps and risks.
So, which type of entrepreneur should you become? Let’s explore your options and find out.
What are types of entrepreneurship?
Entrepreneurship is the process of planning, starting, and running a business. These principles are present in every type of entrepreneur. Where entrepreneurs differ depends on the kind of business, their reasons for owning a business, and their goals. These factors will influence the skills, business challenges, and resources necessary to succeed.
Recommended Reading: 7 real reasons why entrepreneurs start their businesses
The 12 different types of entrepreneurs
All entrepreneurs aren’t the same. They are unique individuals who bring various personality traits and skills to their businesses. Even though a single type can strictly define some entrepreneurs, most are a combination.
Pay close attention to discover what type/s of entrepreneur best describes you:
1. The Hustler
Do you constantly work hard and find it even harder to take a break? Then you’re probably a “hustler.” These entrepreneurs live for the grind and are driven to make it independently. They often start small and, through raw determination and creativity, can grow their businesses.
Hustlers are very active networkers, always looking for an opportunity to land customers or secure new deals. Never lacking in confidence, these entrepreneurs are the ultimate risk-takers and must be very careful about overselling themselves or the capabilities of their businesses.
Entrepreneurs who can come up with new ideas or inventions that fill a need or improve quality of life play a significant role in our society. They don’t just sell products and services. Innovative entrepreneurs are looking to change the whole game, often revolutionizing entire industries.
Innovators tend to be more product-focused and are highly driven perfectionists, with little time (or patience) for anything mediocre. While innovators are some of the most famous and respected entrepreneurs, their quest for perfection often leaves those around them feeling slighted or abused.
If you’re an innovator, just be mindful that everyone might not see your vision exactly as you do, and you’ll need others to help you. So be respectful and lighten up.
Recommended Reading: 6 ways emotional intelligence serves entrepreneurs
Many entrepreneurs aren’t quite innovators. Instead, they have a knack for taking existing business ideas and improving or adjusting them—some of the biggest names you can think of fall into this category.
The incredible success of imitators has proven that you don’t have to reinvent the wheel, just improve it or make it easier to use. Are there any businesses where you see an opportunity to do something different or in a better way?
Waiting and observing innovators who take the brunt of the risk allows imitators to devise solutions and improvements over the original. However, imitators will always be one step behind, which in some cases, might cause them to miss out on an opportunity.
4. Social entrepreneur
Money can’t buy happiness. That’s the position of many entrepreneurs, but some take it a step further: making money should be about improving the lives of others.
Social entrepreneurs aren’t in it for profits or wealth. Their goal is to change the world. Whether it’s reducing poverty, ending homelessness, or fighting climate change—social entrepreneurs are, first and foremost, committed to a cause.
While starting a business to support a worthy cause is admirable, the venture still requires focus and serious processes to be sustainable and reach the desired social or environmental impact. If you’re a social entrepreneur, you must never forget that you’re running a business first.
Conducting research is a necessary step for every entrepreneur. Some are obsessed with data and unwilling to be driven by instincts or gut feelings. For “researchers,” the data makes the decisions. Researchers tend to favor the “tried and proven” over innovation.
Researchers’ complete reliance on data-driven decision-making does have its merits but can be restrictive if there’s no room for creativity or human impulse. Strictly adhering to data can impede a researcher’s ability to assess breakthroughs for which there simply isn’t any data to support—resulting in missed lucrative, sometimes game-changing, opportunities.
Recommended Reading: 17 key business metrics you should track
Sellers are entrepreneurs looking to start, grow their businesses, and sell them as quickly as possible. They aren’t interested in the long haul, preferring to flip their companies and repeat the process to make as much money as they desire.
While sellers tend to do exceptionally well in the short term, their motivation could lead to a premature exit from a successful business, significantly reducing their return on investment. Focusing solely on selling can leave entrepreneurs without significant income-generating assets. Without them, sellers are potentially limiting their ability to invest in other companies.
It’s a trade-off: sell and reap the immediate benefits now, or take the risk of holding and hope the business continues to grow. If you’re a seller, you should weigh this decision carefully and look for a healthy mix.
Experienced entrepreneurs may eventually become buyers: scoping the landscape for businesses to invest in or acquire. Many buyers look for companies where their talent and skills can improve or position small enterprises for growth. Once they’ve pushed it into growth, it allows them to sell for an even greater return on their initial investment.
One of the main drawbacks for buyers looking to invest is often a lack of direct input. It can be frustrating not being able to directly influence the day-to-day actions of a business relying on your money. To be a serious buyer, you’ll need to be ok taking on a behind-the-scenes/consultative role or make it known that you intend to be hands-on before purchasing.
As for complete acquisitions, buyers need to be careful. Having previous success can lead to overconfidence and investments that should have been left alone. What worked five years ago might not work now.
If you’re a buyer, take your time and conduct thorough research to ensure the management team is competent and will protect your investment, or in the case of an acquisition, that you’re fully capable of meeting the challenges of your new business.
Do you prefer a one-person show, where you’re the boss and employee and don’t want to expand or hire staff? If that’s you, then you’re a solopreneur.
Solopreneurs are rabidly independent. They prefer to keep their operations small, which makes them easier to control rather than growing their businesses.
Many professionals, such as doctors, lawyers, and contractors, are solopreneurs. And even though their businesses can be very lucrative, their unwillingness to grow can result in missed opportunities. That’s not necessarily a negative thing. Just remember that if you start solo and are pursuing growth, you’ll eventually need more people.
9. Small business entrepreneur
Most entrepreneurs aren’t thinking about taking a company public or becoming billionaires. They’re driven by the desire to provide for their families, work on their own time, and ideally create long-term generational wealth.
Small businesses are the backbone of most economies, growing slowly over decades as they are passed down from generation to generation. Many medium to large businesses in operation today were once small businesses that grew bigger.
If leaving behind a legacy your family members can inherit is what you desire, you must ensure proper succession planning. It’s also a good idea to involve your children in your business early. Hence, they develop an appreciation of your vision and the opportunities they will have to make the company much more significant in the future.
10. Scalable startup
Are you working on the next big app or tech-related platform? You’re likely a scalable startup, and you’re looking to acquire funding as quickly as possible, right?
Being in this category places you on a fast track: You will quickly find financial success or heartbreaking failure. For every Facebook or Amazon, thousands of promising startups burn out, leaving once confident and optimistic entrepreneurs bitter and too timid to try again.
Scalable startups are typically extremely risky. Their attractiveness as an investment is based solely on potential. They may take years of losses before realizing a profit.
As a scale startup entrepreneur, you’ll likely need several investor funding rounds. But if you don’t wholeheartedly believe in your idea, why would any investor give you their money?
Take your time and try to stay humble. If it doesn’t work out, know that your effort wasn’t in vain. There are lessons for you to learn, which, if heeded, can help you to create something even better.
Recommended Reading: Why entrepreneurs should take risks
11. Large company
Entrepreneurs whose companies have enjoyed considerable success often look for new opportunities to expand their businesses. Acquiring smaller businesses is a proven way to add new revenue streams by integrating existing products and services.
Like buyers, large companies must be cautious in acquiring smaller companies. Buying the wrong company can drain resources and distract managers from their core businesses, causing potentially irreversible damage.
12. Financial backer
Whether you call them “angel Investors” or “venture capitalists,” financial backers focus on money and helping other entrepreneurs succeed. They’re entrepreneurs who aren’t looking to get involved in day-to-day operations but only want a return on their investment.
Do you have money to invest in someone else’s idea or business? What kind of return are you expecting? If you’re a financial backer, you need to know exactly how much you can afford to invest, how much you can lose, and what you expect as a return.
What type of entrepreneur are you?
You need to take the time to understand the type of entrepreneur you are. It will impact your outlook, approach, necessary skills, and the challenges you’ll experience.
Being an entrepreneur takes guts, not just to start a business, but to be honest with yourself in analyzing who you are. The most successful entrepreneurs are those who take the time to understand themselves fully. To know their goals, how they want to work, and how they will approach adversity.
Are you ready to start your journey as an entrepreneur? Get started by writing your business plan and outlining what your business will be.