5 Common Types of Entrepreneurship

Not all businesses are created equal, and an entrepreneurial venture can be defined based on its size or mission. So which type of entrepreneurship works best for you? 

This handy guide examines the five main types of entrepreneurship, giving examples of each so you can better understand where you and your business fit in. 

1. Small Business

A small business is exactly what it sounds like: a business that’s smaller than a massive national conglomerate and plans to stay that way. This is the only entrepreneurship category with specific legal restrictions and benefits and is likely how you’ll start out. 

Small businesses are overseen by the US Small Business Administration (SBA) and can apply for small business loans and other federal programs. Though the employment and revenue criteria for a small business vary by industry, the SBA viewed 99.9% of US companies as small businesses in 2021. 

Next time you’re in the city, take a moment to look around at all the small businesses: a food truck, a mom-and-pop diner, a local laundromat, a real estate broker, and more! 

2. Scalable Startup

If a small business has serious aspirations, it’s probably a scalable startup. A scalable startup entrepreneur creates a unique product or service and focuses on quickly scaling their operations to expand into other markets. 

These companies often get into manufacturing or software development, where costs are low. Scalable startups usually partner with investors who provide funding in the hopes that the business will grow rapidly and provide a return on investment. 

Uber is a good example of a scalable startup. Once the company had completed the software and mobile app, its managers didn’t need to do much to get drivers in each new city to sign up, attract riders and spur company growth. 

3. Large Company Entrepreneurship

When your small business or scalable startup has grown to its natural limits and your market is saturated, what do you do as an entrepreneur? The next step is large company entrepreneurship, in which an established business grows by continuously releasing and adapting new products to meet changing market demands. 

These new products can come externally by acquiring smaller businesses or internally through in-house development.

An example of a large company entrepreneurial venture is PepsiCo. Though Pepsi might dominate the soft drinks industry with its signature drink, it developed and released Zero Sugar Pepsi to attract more health-conscious consumers and acquired Gatorade to attract athletes.

4. Social Entrepreneurship

A social entrepreneur focuses their business on solving a social issue such as pollution or food insecurity. Rather than organizing volunteers and events like nonprofit charities, a social entrepreneur’s aid is inherent in their business plan – they might sell portable water filters or donate a pair of glasses for each one they sell. 

Though they’re allowed to collect profits, monetary gain is secondary to their goal of doing good.

An example of a social entrepreneurial venture is Lush Cosmetics, known for its organic, cruelty-free products. Among other things, they seek to end animal testing in the cosmetics industry and reduce packaging waste.

5. Innovation Entrepreneurship

Innovation entrepreneurship is just what it sounds like – the entrepreneur seeks to constantly create and sell new and improved products. Unlike a scalable startup that focuses on mass-producing one single product, innovative entrepreneurship grows by constantly working to develop new products. 

This type of entrepreneurship isn’t for the faint of heart – you’ll likely need to work tirelessly to create new products and beat competitors to market. The classic example of an innovation entrepreneur is Steve Jobs: from the iPod to the Apple Watch, each new Apple product has been a groundbreaking, industry-creating technology.