For many generations, the concept of a steady 9-to-5 job was the most popular. Individuals felt it offered stability and security, a regular salary, and other perks. However, India has been witnessing a significant shift. Thousands have turned towards entrepreneurship, and government measures, new mindsets, and technological innovations have exacerbated this change.
If you want to start your own business, several factors must be considered. These include the various types of entrepreneurs and which one you want to be, your product or service, audience, and funding. This article examines the different types of entrepreneurs, their key differences, and why they are essential.
What is an Entrepreneur?
An entrepreneur is an individual who desires and can plan, manage, and successfully establish a new business venture or startup. Entrepreneurs are considered innovators who bring novel concepts to the market, replacing old or outdated measures with new inventions and offering new solutions to problems. There are various types of entrepreneurs, ranging from large-scale corporations to smaller home-based businesses.
What are the Types of Entrepreneurs?
There are various classifications of entrepreneurs. Classifications depend on the criteria being assessed, such as the size of the business, the business model, or the product. Below, we look at two different types of classifications of entrepreneurs.
1. Based on approach
The first classification we look at is by Clarence H. Danhof. It classifies 4 types of entrepreneurs based on their approach and model.
– Innovative Entrepreneur
Innovative entrepreneurs are visionaries. They are constantly developing new ideas, looking for new opportunities, and creating new groundbreaking products and services. They are recognised for their creativity, risk-taking mindsets, and tendency to deviate from more traditional business models.
An example of an innovative entrepreneur is Mark Zuckerburg, the cofounder of Facebook (now Meta). He was responsible for completely transforming how humans used the internet to stay connected and communicate with others across the globe.
They have bigger risk appetites, and their products/services typically take longer to develop. While they are more creative than other entrepreneurs, they face more significant uncertainties and risks.
– Imitative Entrepreneur
In contrast to innovative entrepreneurs, imitative entrepreneurs focus more on replicating and building off pre-established business models, ideas, products, and services. They can successfully identify and recreate successful business models. An excellent example of these entrepreneurs are franchise owners, who can replicate existing brand concepts and operate multiple outlets. While they lack novelty, they can still be successful by utilising proven business models and concepts.
Compared to innovative entrepreneurs, they have a moderate risk appetite and focus less on originality and more on improving existing ideas. While they take less time to develop and establish, they risk being overshadowed by existing competitors. To succeed, they need to differentiate themselves within the market.
– Fabian Entrepreneur
Fabian entrepreneurs differ from both of the earlier variations. They tend to take a more careful and calculated approach to entrepreneurship, gradually advancing and mitigating risks. They take more time to analyse market conditions, study customer demands, and examine resource availability before making their next moves. They prioritise long-term stability over rapid growth. They have a very low risk tolerance and could face challenges against more innovative competitors. However, they will take up innovations and changes if needed for survival.
– Drone Entrepreneurs
The final classification of an entrepreneur is the drone type. They typically avoid new opportunities and do not capitalise on them. They stick to traditional business methods and do not adapt their processes even when facing losses. They have almost no risk tolerance and run the risk of failure because of their inability to adapt to market changes.
2. Based on business model
– Small Business
In India, there are more than 63 million small businesses. These companies have share capital worth less than Rs. 4 crores. They generally have fewer employees and locations and lower revenue than their larger counterparts. Some examples include self-employed individuals, restaurants, catering businesses, and more.
– Scalable Startups
Scalable startups are businesses that grow rapidly and become highly profitable quickly. They are fewer in number than small businesses but generally become highly successful and popular. They can attract many investors, allowing them to scale quickly.
– Intrapreneurship
Intrapreneurships occur when employees within an existing organisation take on entrepreneurial roles and create spin-off products and services that become successful independently. These employees use resources from their current employers, think outside the box, and develop new solutions for existing and future customers. Thanks to their backing from a larger existing company, they have an advantage over other types of entrepreneurship.
– Social Entrepreneurship
Social entrepreneurs are focused on creating positive change in society through their innovations. An excellent example of social entrepreneurs is those who launch non-profit organisations. Their primary purpose is creating positive change in the world rather than profit. Examples of social entrepreneurship include animal conservationists, renewable energy startups, and non-profits that serve underprivileged communities.
The Bottom Line
Entrepreneurship is an excellent idea in India, thanks to a large, growing market, relatively low set-up costs, the availability of skilled professionals and raw materials, government backing, and more. Entrepreneurs must consider several factors when setting up their businesses, such as their approach, business models, and (perhaps most importantly) funding.
This is where business loans come in. If you want to start your business, consider Tata Capital for help. We offer competitive business loan interest rates, flexible tenures, and doorstep services. For more information, head to the Tata Capital website or download the app today!
FAQs
The four main types of entrepreneurship are small businesses, scalable startups, intrapreneurships, and social entrepreneurship. They differ based on their size, revenue, profit, and goals.
There are many different types of entrepreneurs. The main 4 classifications include innovative, imitative, Fabian, and Drone entrepreneurs.
One of the most common types of entrepreneurs is the small business entrepreneur. They typically have limited workforces, smaller audience bases, and lower revenue.
18 March 2025
5 mins read
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