Among owners of small businesses, the typical path into entrepreneurship that is discussed, is the traditional one where you start a firm and build it from scratch. But there are other optional routes that deserve a mention, too, so let’s jump in right now!
Path 1: Traditional Entrepreneurship
Traditionally, a firm is started by the owner, who then builds it slowly over time. Often capital is limited, as the initial investment tends to come from the entrepreneur either through saving from a previous salary, or getting a modest bank loan.
Money in traditional entrepreneurship is nothing compared to the amounts moving in startup circles with their angel investors and massive working hours.
Traditional entrepreneurship also means that it is very likely the owner will retire from this business eventually.
Path 2: An Inherited Family Business
The traditional entrepreneur in path 1 may have retired, and thereby handed over leadership to their children or other close relatives.
In such cases it isn’t unusual for the new leader to have gone to business school with the specific purpose of learning good business practices. Once graduating, they may have worked as employee in the firm to learn the ropes, and slowly stepped into the position of Managing Director or CEO.
Stepping into a family business can come with its own challenges, but skipping the first phases of uncertainty and worries has its perks. The new leader cluld very well continue the path of a traditional entrepreneur next.
Path 3: A Purchased Firm
The traditional entrepreneur, who built a firm in our first option, might not have kids, or they may want a different career in which case selling the firm to someone else is a great alternative to closing it.
Existing employees can keep their jobs, customer relationships built over the years will keep being nurtured, and the new owner avoids the cumbersome time of strengthening a newly established firm.
Investing in a profitable firm might mean changing things up a bit, but overall this is a stable path into entrepreneurship.
Path 4: Getting Into Franchising
A franchise is a firm that is part of a chain of similar firms, which means that someone new to entrepreneurship will buy a “manual” on how to get things done.
It isn’t for everyone, but franchises can have trainings, from what I understand, and decision fatigue isn’t the same type of a problem it can be for traditional entrepreneurs.
Specifically, a licence is bought to use a tested business model, and its branding and other resources. Generally, licencing is considered a safe path into entrepreneurship.
Path 5: Serial Entrepreneurship
Serial entrepreneurship means building one firm from scratch, possibly with an existing exit strategy from the beginning, then selling it and starting another one later on.
A serial entrepreneur tends to approach doing business differently compared to a traditional entrepreneur, who in terms of mindset craves stability and longevity. From my own observations, a serial entrepreneur refers to business in slightly more fast-paced words that emphasise dynamic change and new challenges.
Once the firm grows in size from micro enterprise (1-9 employees), sometimes a bankruptcy has been part of the experience base of a serial entrepreneur. In Finland, however, this is unusual on average, since the risk involved is larger compared to countries where support with debts is available (getting them excused even).
Path 6: Parallel Entrepreneurship
A parallel entrepreneur owns more than one firm simultaneously. The main risk is that many projects are worked on, but not many enough are brought to the finish line.
Parallel entrepreneership therefore suits people, who are organised and willing to improve processes continuously to get the most out of working hours, without starting to work double the time.
In terms of business models, micro entrepreneurs can become very successful if using existing skills, but changing output only. By this I mean that a person could start one firm selling a mix of products and services, develop templates for these and marketing assets, then recreate the same structure for another topic.
Often parallel entrepreneurship is discussed in the startup sphere only, but micro entrepreneurs in particular can easily step into this type of entrepreneurship, as long as they manage to work enough for both businesses.
Parallel Entrepreneurship Light
A “parallel entrepreneurship light” version is to build several brands under one firm, which for legal and bookkeeping reasons may be a simpler solution.
When creating one type of marketing materials during content batching, do the same for the other website/e-commerce shop, and benefit from keeping your brain in the same mode for longer.
Entrepreneurship Creates Different Opportunities
If you know you want to start a firm, as is evident from this post, you can step into entrepreneurship in many ways. Also remember, you can close a business if it doesn’t feel right anymore, then open another one.
Business is flexible, and creates numerous learning opportunities. As entrepreneurs we shouldn’t feel stuck, because there is always something else to test, or develop.
As long as a firm doesn’t clash with the business model of an employer, you can keep hours to a minimum without sacrificing a second (or third!) income stream. Financial stability in politically volatile times is always a good idea to invest time on building!
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