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 Types and importance of
entrepreneurship and
entrepreneurs

Done by:
Nabhan Mayas
Hasan Zabarh

Supervised by:
DR. Mohammed Al-Awlaki
What Is Entrepreneurship?

The process of launching, developing and running a business venture along with
its financial risks is called entrepreneurship.

In simple terms, it is the willingness to launch a new business venture. It is very

important for the economic development of the expanding global marketplace. A
person who undertakes entrepreneurship is called an entrepreneur.
Generally, starting your own business is a tough proposition as 90% of startups
fail each year. However, it comes as no surprise that more and more people
choose to be independent in their professional careers. According to statistics
compiled by dealsunny.com, 2 out of 3 people worldwide think entrepreneurship
is a good choice. Majority of the people think that entrepreneurship has just one
meaning.

Types of Entrepreneurship

1. Small business entrepreneurship

In today’s world, the majority of businesses are still small businesses. In the
U.S, 99.7% of all companies are small businesses and they employ 50% of all
non-governmental workers. They are mostly barely profitable, but they make
profits only to make a living and support their families. Such businesses lack the
scale to attract venture capital and they are funded via friends/family or small
business loans. Examples of small business entrepreneurship include
hairdressers, grocery stores, electricians, carpenters, plumbers, consultants, etc.

2. Scalable Startup Entrepreneurship

In this type of entrepreneurship, entrepreneurs start their company believing that
their vision can change the world. Their funding comes from venture
capitalists and they hire the best employees. Finding a scalable and repeatable
business model is their goal. Once they find it, further funding from venture
capitalists is required for growing their business. Scalable startups only make up
a small proportion of all businesses due to the risk capital and outsize returns.
Examples of scalable startup entrepreneurship include Facebook, Instagram,
Online shopping for electronics, etc.
3. Large Company Entrepreneurship
Large companies through sustaining innovation, offering new products that are
variants around their core products. New products are developed in order to
meet with changing customer needs and advanced technology. Often,
companies do this by partnering with or buying innovative companies. Examples
of large company entrepreneurship include Google, Microsoft, Samsung, etc.

4. Social Entrepreneurship
Social entrepreneurship is where an entrepreneur creates products and services
to solve social needs and problems. Their only goal is to make the world a better
place and not to make profits or acquire wealth. They can be non-profit, profit or
hybrid. One example of social entrepreneurship is an organization
named Safepoint Trust by Marc Koska, which works to redesign medical tools
and introduce inexpensive non-reusable syringes for underfunded clinics around
the world. This organization was able to deliver 4 billion safe injections across 40
countries with their breakthrough Auto-Disable syringes.

Importance of Entrepreneurship
Haven’t we all wondered at least once in our lives why entrepreneurship is so
appealing to the majority? Why is it so important?

▪ Entrepreneurs create jobs: Entrepreneurs, in addition to employing

themselves, also create a number of job opportunities with their business
venture. And as their businesses grow, more job opportunities are created,
thereby reducing unemployment.(Al-Awlaqi, Aamer, & Habtoor, 2018)
▪ Entrepreneurs create change: When an entrepreneur makes a product in the
hopes of solving a problem or when they explore a new idea, it brings a
change into the world. Their ambitions and ideas thus improve the world.
▪ Entrepreneurs give to the society: It is a common notion that the rich are
greedy, but it is mostly wrong. The more money they make, the more in taxes
they pay which in turn funds social services. Some entrepreneurs as we
know, like Bill Gates, the founder of Microsoft, are the biggest donors to
charities and non-profits.
Factors affecting entrepreneurship
As much appealing the idea of entrepreneurship may seem, there are a few
factors to be kept in mind before choosing when and where to start your
business. Some of the factors that affect entrepreneurship are:

▪ Political Factors: The market in a place can be capitalistic, communistic or a

mixture of both. Capitalism requires innovation while communism requires
entrepreneurs and the political class to be well connected with each other.
Ideally, a country should be capitalistic for entrepreneurship to flourish in the
region.
▪ Legal Factors: The strength and fairness of the judicial system in a country
has a big role to play in the quality of entrepreneurship. This is because
entrepreneurs in many cases might require the courts to enforce the
contracts agreed between two parties. But in many countries, such contracts
are not enforced properly, and this risk prevents the development of
entrepreneurship in those countries.
▪ Taxation: Governments sometimes resort to excessive taxation as they
adopt the policy of taking from the rich and giving it to the poor. However, the
basic principle of entrepreneurship believes in the survival of the fittest and
the excessive taxation rule contradicts it. Hence, entrepreneurs want to set
up businesses in places where there is very little interference from the
government on taxation.
▪ Capital Availability: Capital is the first requirement to start risky ventures
and they might also require instant capital to scale up the business once an
idea becomes successful. Therefore, entrepreneurship helps the economies
to grow in those countries where there is a well-developed system of
providing capital at every stage i.e. seed capital, venture capital, private
equity as well as stock and bond markets.
▪ Labor and raw materials: Availability of skilled labor and required raw
materials at reasonable prices are an important factor for the launching of a
business venture in a region. Countries like India, Bangladesh and China
have witnessed a huge rise in entrepreneurial activities because of the labor
markets being favorable for them.

Make sure to plan your business startup keeping all these factors in mind to
improve the chances of your success. Any independent individual with leadership
qualities would opt for entrepreneurship in today’s world even though there
comes a lot of risks and responsibilities along with it. “Entrepreneurship is about
being able to face failure, manage failure and succeed after failing”. If you believe
you have the skills and talent to be an entrepreneur, do read our article “How to
Become an Entrepreneur” to guide you in your journey towards success.
 Types of entrepreneurs
Based on the Type of Business:

1. Trading Entrepreneur:
As the name itself suggests, the trading entrepreneur undertake the
trading activities. They procure the finished products from the
manufacturers and sell these to the customers directly or through a
retailer. These serve as the middlemen as wholesalers, dealers, and
retailers between the manufacturers and customers.

2. Manufacturing Entrepreneur:
The manufacturing entrepreneurs manufacture products. They
identify the needs of the customers and, then, explore the resources
and technology to be used to manufacture the products to satisfy the
customers’ needs. In other words, the manufacturing entrepreneurs
convert raw materials into finished products.

3. Agricultural Entrepreneur:
The entrepreneurs who undertake agricultural pursuits are called
agricultural entrepreneurs. They cover a wide spectrum of agricultural
activities like cultivation, marketing of agricultural produce, irrigation,
mechanization, and technology.
Based on the Use of Technology:

1. Technical Entrepreneur:
The entrepreneurs who establish and run science and technology-
based industries are called ‘technical entrepreneurs.’ Speaking
alternatively, these are the entrepreneurs who make use of science and
technology in their enterprises. Expectedly, they use new and
innovative methods of production in their enterprises.

2. Non-Technical Entrepreneur:
Based on the use of technology, the entrepreneurs who are not
technical entrepreneurs are non-technical entrepreneurs. The forte of
their enterprises is not science and technology. They are concerned
with the use of alternative and imitative methods of marketing and
distribution strategies to make their business survive and thrive in the
competitive market.

Based on Ownership:
1. Private Entrepreneur:
A private entrepreneur is one who as an individual sets up a business
enterprise. He / she it’s the sole owner of the enterprise and bears the
entire risk involved in it.

2. State Entrepreneur:
When the trading or industrial venture is undertaken by the State or
the Government, it is called ‘state entrepreneur.’
3. Joint Entrepreneurs:
When a private entrepreneur and the Government jointly run a
business enterprise, it is called ‘joint entrepreneurs.’

Based on Gender:

1. Men Entrepreneurs:
When business enterprises are owned, managed, and controlled by
men, these are called ‘men entrepreneurs.’

2. Women Entrepreneurs:
Women entrepreneurs are defined as the enterprises owned and
controlled by a woman or women having a minimum financial interest
of 51 per cent of the capital and giving at least 51 per cent of
employment generated in the enterprises to women.

Based on the Size of Enterprise:

1. Small-Scale Entrepreneur:
An entrepreneur who has made investment in plant and machinery up
to YE 150 crore is called ‘small-scale entrepreneur.’

2. Medium-Scale Entrepreneur:
The entrepreneur who has made investment in plant and machinery
above YE 150 crore but below YE 800 crore is called ‘medium-scale
entrepreneur.’
3. Large-Scale entrepreneur:

The entrepreneur who has made investment in plant and machinery

more than YE 800 crore is called ‘large-scale entrepreneur.’
 References

Al-Awlaqi, M. A., Aamer, A. M., & Habtoor, N. (2018). The effect of

entrepreneurship training on entrepreneurial orientation: Evidence from a

regression discontinuity design on micro-sized businesses. The International

Journal of Management Education.

https://doi.org/10.1016/j.ijme.2018.11.003

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