What is Entrepreneurship?
In general meaning, entrepreneurship is a combination of innovation and leadership. It deals with structuring the organization and the business set up. The main concentration of entrepreneurship is on employing, managing and developing resources in the most advantageous manner.
Prof. Rio Math has defined entrepreneurship in the following words
Entrepreneurship can be described as
creative and innovative response to the environment
Thus, the main emphasis of entrepreneurship is on INNOVATION. All the activities of entrepreneurship refer to the decisions to make the most out of sources in an innovative way.
Types of Entrepreneurship
Based on the size, productivity and growth entrepreneurship is divided into various heads. Here, we are going to converse about the major types of entrepreneurship. These are
- Small business entrepreneurship
- Scalable entrepreneurship
- Large company entrepreneurship
- Social entrepreneurship
1. Small Scale Entrepreneurship
Small scale entrepreneurship is the first among the types of entrepreneurship. It means a business that is set up at a small level with less capital and few employees. These are privately owned businesses and have three further branches.
What is a corporation? A corporation is a group of people or companies which is legally recognized to act as a single entity.
What is Partnership? Partnership is a form of organization where two or more individuals share the ownership of business unit. They form a legal agreement containing the rights, duties and responsibilities of every partner. This agreement is called partnership deed.
They share all the profits and losses respective to the decided ratios. Partnerships can be formed between individuals as well as companies.
What is a Sole Proprietorship? A sole proprietor is a person who generates the idea of starting a business all by him. He creates the resources, manages the factors of production, arranges the finances and takes all the risks solely. He is also responsible for all the actions and reactions of his decisions. Hence, enjoys all the profits alone.
Some examples of small business entrepreneurship are grocery stores, doctors, electricians, plumbers, hairdressers, and consultants etc.
2. Scalable Entrepreneurship
Scalability is the capacity of the functioning of a business that can be changed in size and scale. In business, scalability is the ability to handle the growth of business and increasing demand. It also refers to modeling the business for obtaining increased profit ratios to the increase in sales. Scalability entrepreneurship stands at second among the major types of entrepreneurship.
Scalable entrepreneurship means taking the business to the next level. These entrepreneurs have a broad vision of innovation and evolution. They believe that their ideas can change the business scene. Entrepreneurs consider scalability as an important ingredient while choosing the business model.
Rapid growth and success of the business depend upon the most practical model that allows the entrepreneur to maximize sale generation, increase profits gradually while holding the cost of production in control.
This entrepreneurship takes support from venture capitalists. Venture capitalists are firms that support small businesses financially for expanding their business operations. They take the risk of investment because they know that the growth and profitability of scalable entrepreneurship are calculated.
Examples for such kind of businesses are Facebook, Instagram, online shopping etc.
3. Large Company Entrepreneurship
A large company can be defined as a progressive business unit. It has sustainability in the market. Large companies have the capacity of developing new products according to the changes in the demands and needs of the consumers. That is why they fix into the category of major types of entrepreneurship.
Large company entrepreneurship, as explained by its name, is large in size. It has large number of employees and a high turnover rate.
But, the grass is not always green. Large companies, where have the advantage of large productions and high profits then, on the contrary, they also face the pressure of mass productions as a result of the sudden changes in the demands of the customers or any environmental change that required the production of innovative products and finding markets for their distribution.
Google, Microsoft, Samsung are the prominent examples of large company entrepreneurship.
4. Social Entrepreneurship
Social entrepreneurship is a set up based on a vision to produce goods and services that help in catering the social needs and problems. These types of entrepreneurship work for the betterment of society. Many social entrepreneurship deal with the social, cultural and environmental issues faced by society.
Social entrepreneurship has more emphasis on the needs of society; it does not mean they are not profit-motivated. Social entrepreneurship should not be mistaken as a non-profit organization, except a few exemptions.
Adam Smith explained in his famous book “The Wealth of Nation” (1776)
It is not from the benevolence of the butcher,
the brewer or the baker that we expect our dinner,
but their regard from their own self interest
Smith believed that pursuing for one’s own best interest leads towards others benefit.
The list of social entrepreneurship is quite long. Some prominent names with world-changing mission include
- WGAC (building toilets for the people of underdeveloped countries).
- Sevenly (One of the biggest contributors of donations).
- Kiva, Traback, Belu water, Catchafire and many more.
It is not justified to rank any of the types as the best one, the more convenient or profitable than the other. Every entrepreneur has different limitations and each type of entrepreneurship has room to entertain the entrepreneurs from different financial segments.