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Entrepreneurial Ventures and Exploration of Entrepreneurial Mindset
Introduction
Exploring the entrepreneurial mindset is impossible without clarifying different venture types and their characteristics. The typology of ventures depends on various characteristics, such as size, geographical location, product types, and other factors. The present paper will seek to discuss different types of entrepreneurial ventures and to examine their similarities and differences, as well as their scope, development, and growth.
Different Types of Entrepreneurial Ventures
There are several key typologies of entrepreneurial ventures. The most comprehensive typology of ventures that takes into account the vast majority of their distinguishing factors recognizes four types of ventures: survival, lifestyle, managed growth, and aggressive growth (Kuratko, 2016). This typology is accurate and effective, as it can be used for all businesses regardless of their location and products.
Survival ventures are small companies with little to no structure and barely any annual growth. Such ventures are focused on their daily operations without considering long-term opportunities and strategies, and the entrepreneurial orientation of these companies is usually very low (Morris et al. 2016). Lifestyle ventures are also rather small, but have a simple structure and use tactical management style to maintain a working business model. Managed growth ventures are focused on strategic growth and usually expect an annual growth rate of 10-15 percent (Morris et al. 2016). They rely on the banks and private investors for funding, but can also be sustainable if the profits are used to support operations and growth. Finally, aggressive growth companies have an annual growth rate of over 20%, use a proactive strategic leadership style, and can also draw funding from public markets. The primary goal of such ventures is to expand further within one market or into new markets.
These ventures can also be related to the typology of entrepreneurship, which recognizes the different motivations and backgrounds of entrepreneurs looking to start a new business. Parker (2018) states that there are three main types of entrepreneurs: owner-manager, serial entrepreneur, and intrapreneur. Intrapreneurs are people who work in large companies but have an entrepreneurial mindset, which can be used to solve complex business problems. Entrepreneurial behaviors evident in intrapreneurs include innovation, organization, and willingness to take risks (Vakili et al. 2016).
Serial entrepreneurs are people who create more than one unrelated start-up and avoid playing a significant managerial role in them. They often wait for the company to develop and then sell it to a new owner, proceeding to start a new venture (Parker 2018). Serial entrepreneurs often create aggressive growth ventures, as these look promising to potential buyers and investors and can develop quickly. However, managed growth companies can also be created by serial entrepreneurs because these companies face financial risks and their growth can be accurately projected.
Lastly, an owner-manager is a type of entrepreneur who started a new business and took a managerial role in it (Lobonciu & Lobonciu 2014). Owner-managers often work with other employees to supervise their performance and use their capital as the key source of financing (Lobonciu & Lobonciu 2014). Ventures operated by owner-managers are normally survival or lifestyle companies, as they both have a simple structure and only require basic management skills to be sustainable.
Similarities and Differences
The four venture types discussed above have far more differences than similarities. For instance, they all differ in terms of their annual growth rate, management focus, and structure. The management styles used by managers or owner-managers of these ventures are also different. Survival ventures rely on reactive management, whereas lifestyle ventures use tactical management. Managed growth ventures normally use a strategic management style, and aggressive growth companies utilize both strategic and proactive management (Morris et al. 2016).
Nevertheless, there are also two similarities between these types of ventures. First of all, the main economic motive behind creating survival and lifestyle ventures is income substitution (Lobonciu & Lobonciu 2014). Small business owners are motivated by having a certain degree of independence and being in control of their company. The motivation behind creating managed growth and aggressive growth ventures is wealth creation (Morris et al. 2016). Owners of these types of businesses seek not only to replace their current income and work independently but to grow the company to build a fortune. Secondly, exit approaches used in lifestyle managed growth, and aggressive growth companies are similar since all of these types of companies can be sold or transferred.
Entrepreneurship in Public and Corporate Sectors
Although the public and corporate sectors are different in many ways, they can both become the context of entrepreneurship. Dhilwayo (2017) explains that in the public sector, entrepreneurship is characterized by economic facilitation and regulation, civil-political service agency, and participation in the commercial market. Public hospitals and educational institutions are examples of public sector entrepreneurship, as they are controlled by the government, provide services to the public, and are part of the healthcare or education market. Corporate sector entrepreneurship is more widespread and includes most for-profit companies. Based on the explanation provided by Kuratko, Morris, & Schindehutte (2015) corporate sector entrepreneurship involves companies that sell profits and services to individuals or other companies to generate profits. Restaurants, fitness centers, and grocery stores are corporate sector entrepreneurial ventures.
Scope, Development, and Growth
The scope of entrepreneurial ventures usually depends on their size, geographical location, and structure. For instance, a small, family-owned grocery store is an example of a micro-enterprise, whereas a beauty salon with a certain degree of corporate structure is a small business (de Oliveira et al. 2015). A chain of flower shops in one city would generally be considered a medium or a large company, depending on the size of stores and their structural complexity. Finally, a company producing and selling products to people from different countries would be considered a large company.
Even though venture development is often non-linear, it can still be presented as a series of developmental stages. The four stages that are usually used when describing venture development are a start-up, rapid growth, expansion, and maturity. During the start-up stage, the idea behind the new venture receives validation from the customer, and there is still some opportunity to change the products or services to achieve customer satisfaction (Lidow 2016). If the idea is new and attractive to customers, the company enters a stage of rapid growth. This stage is characterized by the development of brand awareness in the market, as more and more customers use its products or services. However, if a company remains popular and attractive to customers, the demand for services begins to exceed its capacity (Kumar 2016). At this stage, the venture needs to expand, either by opening new stores, increasing the production capacity, or hiring more staff. After completing the expansion process successfully, the company enters a stage of maturity, where the goal of the management is to maintain success by continuously improving products and services.
Reference List
De Oliveira, J, Escrivão, E, Nagano, MS, Ferraudo, AS, & Rosim, D 2015, What do small business owner-managers do? a managerial work perspective, Journal of Global Entrepreneurship Research, vol. 5, no. 1), 19-39.
Dhliwayo, S 2017, Defining public-sector entrepreneurship: a conceptual operational construct, The International Journal of Entrepreneurship and Innovation, vol. 18, no. 3, pp. 153-163.
Kumar, D 2016, Enterprise growth strategy: vision, planning and execution, Routledge, Abington.
Kuratko, DF, Morris, MH & Schindehutte, M 2015, Understanding the dynamics of entrepreneurship through framework approaches, Small Business Economics, vol. 45, no. 1, pp. 1-13.
Kuratko, DF 2016, Different entrepreneurial ventures for greater societal value: a portfolio approach to assist public policy, The Antitrust Bulletin, vol. 61, no. 4, pp. 546-560.
Lidow, D 2016, The 4 stages of enterprise maturity: From startup to self-sustaining, Entrepreneur.
Lobonciu, G & Lobonciu, M 2014, The owner-manager and the functional management of a small firm, Procedia-Social and Behavioral Sciences, vol. 124, no. 1, pp. 552-561.
Morris, MH, Neumeyer, X, Jang, Y & Kuratko, DF 2018, Distinguishing types of entrepreneurial ventures: an identitybased perspective, Journal of Small Business Management, vol. 56, no. 3, pp. 453-474.
Parker, SC 2018, The economics of entrepreneurship, 2nd edn, Cambridge University Press, Cambridge.
Vakili, F, Tahmasebi, N, Tahmasebi, S & Tahmasebi, D 2017, Role of education in entrepreneurship development, Journal of Ecophysiology and Occupational Health, vol. 16, no. 3-4, pp. 78-87.
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