A1 Types of Enterprise
There are various types of enterprise that can be set up by an entrepreneur. These can be classified based on their characteristics, operations and objectives. For your course, you should be familiar with;
Start-ups
Lifestyle brands
Social Enterprises
Franchises
Start-Ups
A startup refers to a newly established business in the early stages of its development that focus on disruptive innovation and rapid growth. They often operate in industries with high growth potential and take risks to push for fast growth.
Key characteristics of startups include innovation, growth-oriented approach, limited resources, agility and adaptability, dynamic cultures, disruptive approaches
An example of a star-up is Uber. In 2010, they revolutionized the transportation industry by providing a convenient and on-demand ride-hailing service. Through its mobile app, Uber connects passengers with drivers, offering an alternative to traditional taxis.
Lifestyle Brands
A lifestyle brand is an enterprise set up with the goal of allowing the entrepreneur to support a lifestyle they desire rather than focusing solely on maxmising profit and growth. By having a lifestyle brand, the entrepreneur can spend their work time engaging in activities they enjoy in their personal life. Entrepreneurs who set up lifestyle brands focus on a good work-life balance.
An example of a lifestyle brand is Lululemon. This is a well-known athletic apparel brand that caters to yoga practitioners and fitness enthusiasts. The brand promotes a healthy and balanced lifestyle, emphasising mindfulness, self-care, and active living.
Social Enterprise
A social enterprise is a business that prioritises addressing social issues over generating profits. Although they can make profits, this is not their primary concern. Social issues include poverty, homelessness and addiction, improving wellbeing and improving the environment.
An example of a social enterprise is The Big Issue. This is a street newspaper sold by homeless and marginalized individuals. It provides them with an opportunity to earn income and regain their self-confidence. The publication covers a range of topics, including social issues, culture, and current events.
Franchise
A franchise is a legal and commercial relationship between an existing company (franchisor) and an entrepreneur (franchisee) which allows the entrepreneur to operate a business using an established brand. The franchisor provides the franchisee with a proven business model, assistance, support, training, and access to trademarks, proprietary knowledge, and marketing strategies in exchange for fees, royalties, or a share of the franchisee's revenue. However, the entrepreneur will not have autonomy over the decisions made about products and processes. This is because the franchisor will want consistency across their stores.
Examples of franchises include McDonalds, Subway and 7-Eleven.
BTEC Level 3 Enterprise and Entrepreneurship