What characteristics come to mind when you think of the word ‘entrepreneur’? What’s the difference between an entrepreneur and a small business owner? Entrepreneurs are often viewed as visionaries, who bring to life new ideas or new methods of production, solve existing problems and have a positive impact on the market.
Once they start a new venture they share characteristics with other small business owners. Both types of ventures involve a risk of some sorts (both financial and personal) but it's an entrepreneur that is often prepared to persist regardless. The success rate isn’t exactly encouraging with over 90% of all startups failing within their first year. Despite this high failure rate, entrepreneurship is becoming increasingly popular, due to an uncertain business climate, an increasing need to work independently, or wanting to make a direct and positive impact on the world.
Whether you dream of turning your passion project into a profitable sole-operated business or bringing a new application to market with a view to scaling up, one thing is for certain: there are many segments of entrepreneurship.
A solopreneur is a sole-trading entrepreneur who doesn’t intend on scaling up or growing their team but instead opts to start their business alone and to operate on an individual basis. The term is different again to a freelancer who often will supply their services to an existing company (although a solopreneur will often operate on a self-employed and freelance basis). Solopreneurs may opt for a complete DIY business model, or they may hire some external contractors to assist with some specialized tasks but without external investors or business partners, they remain in full control of both their vision and operations.
Scalable Startup Entrepreneurship
Whilst many entrepreneurs are in small business, not every small business owner is an entrepreneur. Small businesses can be family run or run between a number of business partners. Startup entrepreneurship has a time-dependent vision, and often with an exit strategy. Small business owners tend to meet community needs whilst startup entrepreneurship will focus not just on solving issues or bringing a new product to market but also to disrupt an existing business model.
Startups have been traditionally applied to the Silicon Valley tech scene but can also mean any typically new or emerging company that is working to solve a problem where the “solution is not obvious and the success is not guaranteed”. A startup can be defined as a business in its early stages of operation with an end goal of becoming economically sustainable. The cycle of a startup will move through various phases including:
- Seed and development - the business idea and resulting development.
- Startup - the official launch of the startup.
- Growth - new customers come on board and cash flow is starting to improve.
- Expansion - a rapid growth in both revenue cash flow.
- Maturity/Possible Exit - stabilizing cash flow, a possibility to expand or a potential buyout.
Can entrepreneurship exist within a corporate framework? With large organizations always on the lookout for their next profitable venture, they’re usually thought of as lacking in agility despite their wealth of resources. However, more and more large organizations are embracing intrapreneurship, which is adopting the behaviors and mentalities of entrepreneurs and applying them within the large organizational context. Large-scale companies have both the benefit and bureaucracy of having a number of managed divisions including finances, operations, human resources and whilst these have long-standing procedures many years of experience, there are often a larger number of barriers in place that can halt or slow progress.
Social entrepreneurship is about applying entrepreneurial principles to solve problems which affect the community. These are mostly social, cultural or environmental-related causes, and the entrepreneur is interested in making a positive impact on society, whilst applying commercially-minded strategies to further their cause.