The future of entrepreneurship

Types of starts-ups

So the decision to create a new company is made. What types of companies there exist? While there are many classification systems, one that is most useful divide start-ups into three categories: life-style firms, foundation companies, and high-potential ventures.

A life-style (“home”) firm is a private enterprise. It usually achieves only modest growth due to the nature of the business, the objectives of the entrepreneur, and the limited money devoted to R&D. This type of firm may grow after several years to 30 or 40 employees and have annual revenues of about $2 million. A life-style firm exists primarily to support the owners and usually has little opportunity for significant growth and expansion.

The second type of start-up – the foundation company (innovation enterprise) – is created from R&D and lays the foundation for a new industry. This firm can grow in 5 to 10 years from 40 to 400 employees and from $10 million to $20 million in annual revenues. Since that type of start-up goes public, it usually draws the interest of private investors only.

The third type of start-up – the high-potential venture – is the one that receives the greatest investment interest and publicity (investors are striving to invest money in it). While the company may start out like a foundation company, its growth is far more rapid. After 5 to 10 years the company could employ around 500 employees with $20 million to $30 million in annual revenues. The company usually shortly becomes a public limited company. The creation of a new venture must be desirable and possible for an individual to change from a present life- style to a radically new one. It is not surprising that the type and number of new business creations vary greatly throughout any country.

As evidenced by the many different definitions, the term entrepreneurship means different things to different people. However, in spite of the differences, there are some common aspects: risk taking, creativity, independence, and rewards. These common aspects are supposed to be the driving force behind the notion of entrepreneurship in the future. One thing is clear – the future for the entrepreneurship appears to be bright. We are living in the age of the entrepreneur, with entrepreneurship endorsed by educational institutions, governmental units, society, and corporations. Entrepreneurial education has never been so important in terms of courses and academic research.

Various governments have also taken an increasing interest in promoting the growth of entrepreneurship. Individuals are encouraged to create new businesses and are provided such government support as tax incentives, buildings (space), roads, and a communication system – a strong government infrastructure – to facilitate the creation process. The encouragement by the federal and the local governments is supposed to continue in the future as more law-makers understand that new enterprises create jobs and increase the economic output in an area.

Comments:

1. peer – человек своего круга

2. disgrace – позор

3. prerequisite – предпосылка

4. utilities – коммунальные услуги

5. critical – решающий

6. product launching – выпуск товара на рынок

7. trait – характерная черта

Дата добавления: 2014-11-29