Types of Start–Up Firms

By: Cahyo Eko Putranto

Hello there, how’s life hanging? Let’s start the day with knowledge to elevate us to a higher achievement. Well, talking about entrepreneurship there are three types of start-up firms that you guys can begin with. The first is salary–substitute firms. It is a small firm that gives up a level of income for their owner or owners that is similar to what they would earn when working for an employer. Dry cleaners, convenience stores, restaurants, accounting firms, retail stores, and hair styling salons are examples of salary-substitute firms. The vast majority of small business fit into this category. Salary – substitute firms offer ordinary, easily available products or services to customers that are not particularly innovate.

The second one is lifestyle firms that provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so. Lifestyle firms include ski instructor include ski instructor, golf and tennis pros, wine bars, and tour guides. These firms are not innovative, nor do they grow quickly. Commonly, lifestyle companies promote a particular sport, hobby, or pastime and may employ only the owner or just handful people. 7 Gear Road Indonesia, owned by Adet, is an example of lifestyle firm. This firm provides motorbike adventure gears like tank bag, boots, seat bag and other apparels for Indonesian bikers.

Entrepreneurial firms bring new products and services to market. The essence of entrepreneurship is creating value and then distributing that value to customers. In this context, value refers to worth, importance of utility. Entrepreneurial firms bring new products and services to market by creating and seizing opportunities. Google, Facebook and Twitter are well – known, highly successful examples of entrepreneurial firms. Having recognized an opportunity, the entrepreneurs leading companies of this type create products and services that have worth, that are significant to their customers, and that provide a measure of usefulness to their customers that they wouldn’t have otherwise.

Source: Barringer, R Bruce. 2013. Entrepeneurship: Successfully Launching New Venture.  Pearson Education. England

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