Entrepreneurs are often clumped into one big group. Images of the next Mark Zuckerberg hacking away in a dorm room are what come to mind for most people.
The reality is much different. Entrepreneurs come from various fields and with various ambitions. Some want to make money, others want do social good. Some want to do both.
Now, more than ever, there are business structures to accommodate every type of entrepreneur.
Entrepreneurship 101‘s lecture on different types of entrepreneurship introduced the audience to several of these structures and the questions every person should consider before committing to a business.
Make sure you ask yourself these five questions:
Answering these questions can help you decide where your business should fall in the organizational spectrum. Most people are familiar with traditional corporate structures: Non-profit charities deliver social return funded largely by grants while for-profit businesses such as banks focus solely on financial return.
B Corporations are an emerging option for those who want to balance social impact with financial return. These ventures use the power of business to solve social or environmental problems. Bullfrog Power, a MaRS client that offers clean energy solutions, is a certified B Corp.
No matter which structure you choose, each carries its own benefits and risks. For example, if your business relies solely on government grants, an election or change in government policy can put your organization at risk. Explore the lecture slides for more examples of business structures.
If you have a great idea and know your business motivation, you will need financial resources to develop it. Should you target debt or equity financing, or bootstrap your way to profits? Another option is crowdfunding, which involves raising small amounts of money from a large number of people, typically online. Remember: If you wouldn’t invest in your own idea, then chances are, others won’t either.
MaRS offers several other financing options for entrepreneurs:
So whether you have years of business experience or just a really good idea, check out the lecture video below to catch up on the different types of entrepreneurship and ways to structure your business.