What are the most important characteristics of an entrepreneur? It is important for anyone considering starting a business for the first time to reflect on their personal characteristics and compare these characteristics to ones proven to be important for success as an entrepreneur.
There is no shortage of research on the characteristics of successful entrepreneurs.The approaches taken by researchers are quite varied and the conclusions drawn from studies are sometimes contradictory but investigating the findings can yield useful insights to the entrepreneur. According to Zhao & Seibert (2006) the personality construct with the strongest relationship to being an entrepreneur seems to be Conscientiousness. Conscientiousness indicates an individual’s degree of organization, persistence, hard work, and motivation to accomplish goals. Conscientious individuals are achievement oriented and dependable. This personality type is the most consistent predictor of job performance across a wide variety of work and occupations including entrepreneurship.
I agree with the findings of this research due to the traits that comprise the conscientiousness construct. I would add that I believe that passion coupled with a conscientious personality greatly increases the likelihood of entrepreneurial success. Successful entrepreneurs do what they are passionate about. Passion typically stems from the entrepreneur’s belief that their business will positively impact people’s lives. Conversely, lack of passion can kill a business. Entrepreneurs with a lack of passion find it more difficult to make the personal sacrifices necessary for new venture success. Passion can make a seventy-eighty hour work seem tolerable. A lack of passion results in the entrepreneur asking themselves, “Is this what I what to be doing?”
Passion can fuel motivation which can result in focused, goal oriented behavior, and can be a wellspring of energy fueling the often grueling hours of entrepreneurship. If I have a student who is an aspiring entrepreneur, but has no idea the type of business they want to start, I ask them, “What are you are passionate about?” The answer to this question should be the foundation of an investigation of business opportunities. For instance, I often see individuals start a business based on their favorite hobby or a cause they are involved in. These are logical considerations because people are usually passionate about their hobbies and causes. For example, I had a student who was passionate about bees, as a hobby, so when he was laid off from his job he started a business constructing bee hives and educating his customers about beekeeping. In addition, my sister, a mother of three school-age children, became passionately involved in fund-raising efforts for her children’s schools. She was dissatisfied with available fund-raising options so she started her own fund-raising business.
In addition to asking students what they are passionate about I commonly attempt to help students ascertain the likelihood of their success as an entrepreneur. I sometimes direct them to one of a number of profiles that attempt to assess an individual’s entrepreneurial aptitude, using various personality and behavioral constructs. I believe that passion is more difficult to measure because it is so situational. Passion can also be a function of intensity which is also difficult to measure.
While I believe that there is an optimum personality profile for entrepreneurial success, weighted heavily towards conscientiousness, I tell my students that they should not be discouraged if their personality or personal characteristics do not match the ideal profile touted by a survey. While personality tends to remain relatively stable throughout one’s life, behaviors associated with these personality types can be acquired through practice and persistent effort. For example, if an entrepreneur recognizes that they are not as organized as they need to be, the skills and strategies to become organized can be learned.
Obviously entrepreneurship is not for everyone. The factors influencing entrepreneurial success are many and complex. In addition, there is a certain amount of luck and timing involved. All the complexities notwithstanding, I believe the key to success is the ability to persist in an endeavor that one is passionate about.
References:
Zhao, H. & Seibert, S.E. 2006. The big five personality dimensions and entrepreneurial status: A meta-analytical review. Journal of Applied Psychology, 259-271.
http://www.managementpsychology.com/article.php?id=28
http://www.forbes.com/2005/11/15/entrepreneur-personality-quiz_cx_bn_1116quiz.html How might the following characteristics impact success in small business: Life experiences; parental influences; career displacement; and education?
The following characteristics can have a profound impact on success in a small business:
Life Experiences: Although there are a multitude of life experiences which could impact the success of an entrepreneur, I am most interested in the growing trend o older entrepreneurs. According to Census Bureau predictions, the number of Americans age 50 and up will soar by 31 million by 2020, to 118 million. A report this year by the Kauffman Foundation found that older entrepreneurs were a growing trend. An aging population and increasing rate of entrepreneurship among older adults has led to a rising share of new entrepreneurs in the fifty-five to sixty-four age range. This age group represented 14.5 percent of new entrepreneurs in 1996, whereas it represented 22.9 percent of new entrepreneurs in 2010.
The older entrepreneur has several distinct advantages over their younger counterparts. An older entrepreneur has likely spent years in a company or in a trade learning the ins and outs of that industry. In addition to the years of experience that a younger entrepreneur does not have, they are likely starting with more of their own seed money. In addition to having more access to money through savings, retirement funds and other investments, an older entrepreneur may also have fewer ongoing expenses if his or her mortgage is already paid off.
I believe that another, less obvious, advantage of older entrepreneurs is that there are just not as many other job opportunities for someone in the over 50 age range. The reason that this can be an advantage is that the lack of employment opportunities effectively eliminates a source of distractions which potential job offers can be if the start-up is experiencing difficulties.
Career Displacement: For the last eight years I have worked on the “front lines” with students who have returned to school as a consequence of career displacement. Many return to school years after completing high school. These individuals typically went to work after graduation in local mills or factories and settled in to what they anticipated as a life-long career. Most of these individuals were understandably distressed when their company shut down. Most also initially were reluctant as well as apprehensive concerning a return to school. I have seen many students grow in substantial ways during their tenure in college. Some pursued long dormant passions; others found new areas of interest.
Recently, with the addition of our Entrepreneurship degree, students have been able to choose a different kind of path. After experiencing displacement, some are deciding that they wish to take more control over their own destiny. In the next few years, I hope to see these students not only develop successful businesses of their own but become providers of stable, rewarding employment for others.
Occupational background: Occupational background plays a very significant role in entrepreneurial development. The person engaged in some occupation gains an in-depth knowledge of their field. A common path to entrepreneurship is laid out when an individual gains extensive knowledge working in a particular industry and then strikes out on their own, applying their knowledge and experience to their new endeavor.
Educational background: The need for higher education to cope with technological advances, business competition, and the changing global economy has never been greater. Higher education develops skills and leadership abilities important to business success. Other school related activities can also be helpful in entrepreneurial development. Many businesses are started every year by recent college graduates who developed their business through business plan competitions. Also, college clubs and organizations can be an excellent avenue to develop leadership abilities.
The schools that are attended are not as important as may be the case in occupational careers. While attending a top school can help graduates network to sources of capital other personal characteristics are more important to success.
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Parental background: Parental background can be important to entrepreneurial success. For example, many children develop entrepreneurial skills by working an apprenticeship in a family business. Consequently, children of business owners are two to three times more likely to own a business than children with parents who did not own a business.
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what an interesting post about entrepreneurial characteristics! thanks for this sharing, Rick! You're right! Qualities like passion, determination, optimism and patience also helped the great entrepreneur Yury Mintskovsky succeed in his career. Today, he is one of the youngest Assistant Vice Presidents in Nations Bank.
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