Whether you're interested in opening a home-based business or starting a global marketplace, today’s ... [+]
Workers are ditching the nine-to-five in favor of work-life balance and creating their own unique career paths. Statistics show that 16% of the U.S. workforce are entrepreneurs—a number that grew 29% during the pandemic and includes 40% women. Being your own boss can be the driving force behind entrepreneurship. But choosing what to do and how to get started can be daunting.
Most businesses fail when there is insufficient need for the product or service offered. That's why it's so important to do your research before opening your doors … or quitting your day job. It's equally important to know what type of entrepreneurial spirit you have.
Here are the five broad categories of entrepreneurs:
1. Social entrepreneurs. People who are socially conscious create businesses that address social or environmental issues or other equities aimed at improving the global good. Social entrepreneurs often start nonprofit businesses that are mission based.
2. Scalable or startup entrepreneurs. People who fall into this category find a gap in the market and fill it, often with the intention of disrupting the norms. They are niche entrepreneurs that create scalable businesses capable of pivoting as the business grows.
3. Small business owners. These people plan to make a living and support their families with their businesses. Most entrepreneurs create small businesses such as nail salons, dry cleaners, and more. These businesses are established to grow slowly over time. People in this category are more risk-averse.
4. Large business entrepreneurs. These people expand on their business model to create an empire, many of which accept capital from outside sources. Steve Jobs, Bill Gates, and Elon Musk are examples of this type of entrepreneur. This category concentrates on generating profit.
5. Innovative entrepreneurs. The people are creative problem-solvers that bring new products or ideas to the market. They have a vision of how their idea will make an impact. People in this category are often referred to as disruptors.
Understanding what type of entrepreneur you are is rooted in what truly motivates you, as well as your core values, and will help you determine what an appropriate niche. It might be romantic to envision creating a high-impact business such as Apple or Amazon. But if you're risk-averse, it's going to be really challenging to put yourself—and your money—out there.
And, while owning a home business is an obvious entrepreneurial trend, there are other outside-the-box trends worth talking about. But before getting to those, a home business is a great gateway to being your own boss. It's also something you can start doing while still working a full-time job. Home-based businesses run the gamut and include such things as e-commerce specialty stores, services for hire (online or in the local community), and computer-based businesses (web design, marketing, etc.).
Here are some emerging entrepreneurship trends worth considering:
1. Globalized businesses. These are businesses with global teams or global reach. There is a distinction between globalized businesses and international businesses. International businesses sell worldwide by operating from a single facility. Globalized businesses operate from different areas of the globe. Globalized businesses tap into the knowledge and experience of experts around the world. The tech industry leads the pack in globalizing business.
2. Freelance business services. Many companies are hiring freelancers for project work. The freelancer can work from home, at the client's company or office, or a combination. They are typically hired for a specific period or a specific project. Many freelancers work for more than one client at a time. Some freelancers go on to hire employees or subcontractors of their own, taking a small percentage as a finder or administrative fee.
3.Mission-based businesses. Green, sustainable, or community-based businesses are other names for purpose-driven businesses. These are for social entrepreneurs. Mission-based businesses give back in the form of product or cash donations, volunteerism, or activism. TOMS is an example of a "one for one" model where one pair of shoes is donated for every pair sold. Patagonia is known for its environmental activism. The Honest Company sources its products from safe and sustainable sources. Mission-based businesses also include nonprofits.
Just because a business is mission-based does not mean that it can't make money. Millennials and Gen Zers are more concerned about environmental and social causes than their older generation counterparts. And soon, these generations will make up most of the workforce and spend most of the money. Millennials and Gen Zers will have an impact on how companies conduct business.
4. Subscription-based business. A recent study showed that 49% of shoppers use a subscription service, and Stitch Fix, Blue Apron, and Bark Box are just a few examples of subscription-based services. Subscription-based business categories include beer and wine, clothing, cosmetics, meal kits, pet food and pet toys, vitamins and supplements, and even razors (Harry's). These businesses create a consistent revenue stream, better engagement, and brand loyalty. They're based on the idea that it's easier to sell to an existing customer than acquire a new customer.
5. Social commerce. This is like e-commerce, only all sales are made directly on social media. Social commerce is a relative newcomer but is powerful in a customer-centric economy. It's the meeting place between social media and e-commerce, creating a digital "in-person" marketplace through immediate customer interaction. Social commerce is expected to reach $604.5 billion globally by 2027. It is already estimated at $26.9 billion in the U.S. This growth is forcing social media platforms to create social selling tools for savvy entrepreneurs. Social selling is an excellent opportunity to tap digital natives—Gen Zers.
Most of these have focused on using the computer to generate income. But there is another entrepreneurial trend that shouldn't be overlooked: hyperlocal specialty shops. These shops sell products and services that are unique and relevant to their localities. These shops are narrowly focused on being regionally unique. This gives business owners a way to express what makes them unique. Often these are more passion-driven but can be successful with the right know-how and research.
Remember, at the end of the day, there must be enough customers to support your product or service. Some ideas that fall into this category include vegan markets, wine cellars, mead bars (honey wine), or specialty clothing companies. Hyperlocal specialty shops create an atmosphere—a shopping (or sipping) experience that brings customers through the door and converts them into loyal fans.
Whether you're interested in opening a home-based business or starting a global marketplace, today’s entrepreneurs have a lot of options.
