List of Topics

SfC Home > Business > Entrepreneurship >

Basic Types of Entrepreneurial Enterprises

by Ron Kurtus (updated 8 October 2015)

There are three basic types of entrepreneurial enterprises that you can start. The major type is when you start your own business. The other two are starting a franchised business and buying an existing business. Each has its advantages and disadvantages. It is important to do thorough research before starting a business.

Questions you may have include:

This lesson will answer those questions.

Starting your own business

Starting a business from your own idea is the most popular form of entrepreneurship. You have the personal pride in creating something from scratch and then seeing it grow into a viable enterprise. Also with the right idea, the potential growth is great.

Andre always liked to cook and always wanted to be in business for himself. He saw a good location for a small restaurant, was able to lease the building, and used his own funds to start up the restaurant. Opening day was a great success, and he hoped such good business would continue.

The negative aspect is that the chances of failure is high. Even if the enterprise is well thought out, the conditions may not be right for it to succeed.

Starting a franchised business

Buying a franchise in an existing business lowers the risk because the concept has been tested, marketing already exists, and you almost ready to get into business right away.

Some top franchises in the United States include:

  1. Subway
  2. Quiznos
  3. Jackson Hewitt Tax Service
  4. UPS Store
  5. 7-Eleven
  6. Dunkin' Donuts
  7. RE/MAX

Negative factors can be questionable profitability, high start-up costs, limited independence, and high royalty fees. The top franchises almost guarantee success, but are very expensive to obtain. Other franchises may not have a tested plan and may pose a greater risk than starting your own business.

Buying an existing business

Buying an existing business is often a simpler and safer alternative than starting up your own. It also does not have the strings attached when buying a franchise.

A big advantage in buying an existing business is that you do not need to spend time and energy to get the business up and running. Also, cash flow may start immediately. If the business has a good track record, you may already have a good customer base. If you purchase a failing business, you may need to spend extra time and money to try to turn it around.

John and Betty bought a dog care center that had been going down hill for several years, such that the business had few customers. But the price was right for them to run their own business. With hard work and good service, they hoped to get back old customers and make the business a success.

Unfortunately, the initial purchasing cost of a successful business is often very high. Another possible disadvantage involves hidden problems associated with the business. Also, receivables may are valued at the time of purchase but later turn out to be non-collectable.


The three types of entrepreneurial enterprises are starting your own business, buying a franchised business, and buying an existing business. Each has its pros and cons. It is important to do thorough research before starting a business.

You have what it takes

Resources and references

Ron Kurtus' Credentials


Entrepreneur Resources

Buying a Franchise: A Consumer Guide - From Federal Trade Commission

Franchise Gator - Listing of franchise opportunities

Buying a Business - From

Pros and Cons of Buying a Business - From the U.S. Small Business Administration

Top 10 Mistakes Made When Buying a Business - From


(Notice: The School for Champions may earn commissions from book purchases)

Top-rated books on Starting a Business

Top-rated books on being an Entrepreneur

Top-rated books on Buying a Franchise

Students and researchers

The Web address of this page is:

Please include it as a link on your website or as a reference in your report, document, or thesis.

Copyright © Restrictions

Where are you now?

School for Champions

Entrepreneurship topics

Basic Types of Entrepreneurial Enterprises

Entrepreneur topics


Getting started

Case studies

Also see

Let's make the world a better place

Be the best that you can be.

Use your knowledge and skills to help others succeed.

Don't be wasteful; protect our environment.

You CAN influence the world.

Live Your Life as a Champion:

Take care of your health

Seek knowledge and gain skills

Do excellent work

Be valuable to others

Have utmost character

Be a Champion!

The School for Champions helps you become the type of person who can be called a Champion.