The word "Entrepreneur" conjures up many images, beliefs, and stereotypes. For some, the word points them to determined, ruthless businessmen like Donald Trump or Carlos Slim. For others, it might mean free-spirited, people-focussed folks like Oprah Winfrey or Richard Branson. Perhaps we're thinking of the introverted geeks like Bill Gates or Steve Jobs. Or maybe the humble and reserved Warren Buffet.
They're all great entrepreneurs in their own right.
But entrepreneurship is much more than personality tendencies, though our approaches and behaviors do play a major role in determining the type of industry, business, or business model, one is most likely to succeed in.
There are at least 9 types of entrepreneurs - and while some may disagree with the term and how it's used here, in some small way each of the following 9 carry a little bit of that thing we call "entrepreneur" in them.
1. Small Business Owners/Self-Employed - The most basic unit of entrepreneurship is the classic mom-and-pop shop. These guys wear all the hats and do multiple jobs to keep their typically-small operation afloat. While I'm sure most doctors and attorneys would resent being labeled as such, most of them are operators in their own small businesses. While there are exceptions, almost every successful business starts out at this fundamental, basic level.
2. Small Team Developers- For those who succeed in expanding their small mom-and-pop operations beyond themselves as owner-operators, the work turns to training and developing others. Team building becomes the next phase, and those who succeed here know the value of delegation, accountability, and in many cases, dealing with the people-drama issues of all sorts.
3. Innovators & Inventors - For those who venture out into new and uncharted territory, there's the innovator or inventor. Think of innovators as those who create new business models, which typically have a far higher likelihood of success than those who simply come up with a new invention. There are millions of new inventions and patents that are developed each year, and only 1 out of 500 of those will actually pay for the development costs, let alone make a profit. However, those who invent new business models, or what W. Chan Kim would call "
Blue Ocean Strategies" will increase their likelihood of success in business significantly.
4. Brand Expanders - These business types use joint-ventures, strategic business relationships, and in many cases, a classical franchise model to expand their brand or system. Those who do well with these types of businesses are typically marketing-driven, strategic, big-picture thinkers.
5. Economies of Scalers - These types do well in manufacturing or in creating efficiencies on a large scale. Those capable of getting inputs in bulk for low cost, while creating outputs efficiently and profitably as the market demands do well here. These types of businesses require strict attention to detail.
6. Capital Switchboarders - These types are capable of bringing together and integrating money with opportunities. Like those of the Economies of Scalers, Capital Switchboards require strict attention to detail, as leverage is nearly always employed in sustaining this type of business. Banks, insurance companies, or even venture capital groups are all examples of capital switchboards.
7. Acquirers - These types pursue the course of buying other businesses, typically as a means of diversification from a core-business. They buy their way into other industries, shrinking the risk and learning curve that would normally be required to start a business from scratch. Buying into unfamiliar territory posses many risks however - the most notable being the lack of focus such a course engenders.
8. Conglomerators - These types buy into a diverse portfolio of businesses. Unlike the Acquirers, however, they rely more upon the management of the business remaining intact. They're more receptive to the idea of being a minority owner, buying the idea that owning 5 percent of a great company is better than owning 100 percent of a mediocre company.
9. Buy-Fix-Sell Dealers - These are the classic takeover artists. Whether it's a takeover of a publicly traded company to clean house of entrenched management, or a bankrupt private company in need of restructuring to survive, these types get in for cheap, do their work, and if they're successful, get out at a profit.
In determining the type of business you wish to build or buy, keep in mind the 9 types of approches used by successful enterprenuers.