The Only 3 Types of Businesses in the USA

When you strip away all the noise, all the labels, and all the theories, there are only three types of businesses in the United States. That’s it. Just three. Every company you’ve ever seen, worked for, or built fits into one of these categories: the solopreneur, the small business, or the enterprise.

Understanding where you fall—and where you want to go—matters more than most business owners realize. Too often, I meet entrepreneurs who misjudge what type of business they truly have. They call themselves business owners, but in reality, they’ve only bought themselves a job. Others want to scale like Amazon while still operating like a mom-and-pop. And some think they’re ready for Wall Street when their systems can barely handle Main Street.

After building and scaling multiple companies into the eight-figure range, I can tell you with certainty: success comes from knowing exactly which type of business you’re in, embracing the realities of that category, and making strategic moves when you’re ready to transition to the next level.

Type 1: The Solopreneur Business Model

The first category is the solopreneur. This is someone who owns a business of one. You are the business, and the business is you. Many solopreneurs proudly wear the title “entrepreneur,” but in truth, they’ve created what I call a guaranteed job for themselves.

They run their company with no employees, maybe hiring occasional contractors or virtual assistants. Their income depends entirely on their time, energy, and ability to produce. Examples include consultants, freelancers, personal trainers, coaches, and independent shop owners.

Pros of being a solopreneur:

• Full control over decisions

• Low overhead and minimal risk

• Freedom to pivot quickly

• Independence from office politics

Cons of being a solopreneur:

• No leverage—income is capped by hours worked

• No scalability—if you take a vacation, so does your revenue

• Higher risk—if something happens to you, the business stops

• Limited opportunity to build equity or long-term value

A common question I hear is: can a solopreneur scale into a 7-figure business? The answer is: rarely. While a few high-ticket consultants or online course creators may hit those numbers, most solopreneurs max out because they’re selling time, not building systems.

This doesn’t mean solopreneurship is bad. For many people, it’s the perfect fit. But if you want to build wealth or create a company that survives without you, you’ll eventually need to move beyond it. That leads us to the second type of business.

Type 2: The Small Business Owner

The second category is the small business owner. This is where real business ownership begins. A small business is typically defined in the U.S. as having fewer than 500 employees, though in practice, most small businesses operate with far fewer.

A small business owner doesn’t just buy themselves a job—they build a team. They hire employees, delegate responsibilities, and create systems to serve more customers than they could alone. This is the stage where your company stops depending solely on you and starts running as an organization.

Pros of owning a small business:

• Leverage through employees and systems

• Ability to scale revenue beyond personal effort

• Opportunity to create brand recognition in your market

• More stability than a one-person operation

Cons of owning a small business:

• Payroll responsibility—employees must be paid whether sales are good or bad

• Leadership demands—you must learn to manage, coach, and motivate people

• Greater complexity—compliance, taxes, HR, and legal responsibilities multiply

• Growth plateaus if systems aren’t put in place

This is where the real divide happens in the small business vs large business conversation. Too many owners stay stuck in “solopreneur mindset” even after hiring employees. They micromanage, resist building systems, and wonder why growth stalls.

A critical step here is understanding how to move from solopreneur to small business owner. It requires letting go of doing everything yourself, hiring the right people, and focusing on building repeatable processes.

If done right, this stage offers incredible rewards. A well-run small business can grow to seven and even eight figures in revenue, building equity and value far beyond what a solopreneur could achieve.

Type 3: The Enterprise Business Structure

The third category is the enterprise. These are large organizations that dominate markets, operate across multiple states or countries, and often go public through an Initial Public Offering (IPO).

An enterprise business structure is built on scale. These companies have layers of management, shareholders, boards of directors, and complex systems to manage thousands—or even tens of thousands—of employees. Think Amazon, Walmart, Apple, or any company trading on the stock exchange.

Pros of an enterprise business:

• Access to capital through investors and public markets

• Market dominance and global reach

• Brand recognition that creates built-in trust

• Ability to acquire smaller competitors and expand rapidly

Cons of an enterprise business:

• Bureaucracy slows decision-making

• Shareholder pressure prioritizes quarterly profits over long-term strategy

• Risk of losing personal touch with customers and employees

• Immense regulatory and compliance demands

While most entrepreneurs never aim to build an enterprise, many dream of being acquired by one. Understanding how enterprises grow can help small business owners position themselves for acquisition—or simply borrow strategies at scale.

Why This Matters

Knowing which type of business you run isn’t just a fun classification—it’s essential to your survival and growth. Here’s why:

• If you’re a solopreneur pretending to be a small business owner, you’ll burn out trying to scale without building systems.

• If you’re a small business owner trying to act like an enterprise, you’ll waste money chasing tactics designed for billion-dollar budgets.

• If you’re an enterprise leader acting like a small business, you’ll lose competitive advantage to faster-moving rivals.

Growth requires clarity. When you understand your current category, you can make the right moves to succeed in that stage and prepare for the next.

In my years advising business owners, I’ve seen one truth repeated again and again: the companies that thrive are the ones that know exactly where they stand, and they build strategy—not guesswork—around it.

Final Word

At the end of the day, there are only three types of businesses in the USA: solopreneurs, small businesses, and enterprises. Each comes with its own opportunities and challenges.

The real question is: do you know which one you’re in—and do you have a plan to get to where you want to be?

If you’re stuck in solopreneur mode but dream of building a true company, or if your small business has plateaued and you want to scale to the next 7 figures, let’s talk. I’ve helped companies move through these stages and land in the top 1% of successful businesses. You don’t have to guess your way through it. With the right strategy, your path forward becomes clear. Connect with me here.