CHARACTERISTICS OF ENTREPRENEURS

FEELINGS ON BELIEF

Before considering the various characteristics and backgrounds of the typical entrepreneur, it should be emphasized that there are no significant differences between entrepreneurs and the overall general profile. There is really no such thing as a “true entrepreneurial profile.” Entrepreneurs come from a variety of educational backgrounds, family situations, and work experiences. A potential entrepreneur may presently be a worker, salesperson, mechanic, engineer, secretary, etc. A potential entrepreneur can be male or female.

One common concern people have when considering a new venture creation is whether they will be able to sustain the drive and energy required not only to overcome the inertia in creating something new but also to manage the new enterprise and make it grow. Are you driven to succeed and win? An initial assessment of this can be made by answering the 10 Yes-No questions.

Checklist for Feelings on Control

1. Do you often feel “That’s just the way things are and there’s nothing I can do about it”?
2. When things go right and are terrific for you, do you think “I was lucky!”?
3. Do you think you should go into business or do something with your time for pay because everything you read these days is urging you in that direction?
4. Do you know that if you decide to do something, you will do it and nothing can stop you?
5. Even though it is scary to try something new, are you the kind who tries it?
6. If your friends, parents tell you that it is foolish of you to want a career. Have you listened to them?
7. Do you think it is important for everyone to like you?
8. Do you get a feeling of satisfaction from doing a job properly?
9. If you want something, do you ask for it rather than wait for someone to notice you and “just give it to you”?
10. Even though people tell you “it cannot be done,” are you going to find out it yourself?

After answering these questions you can determine whether you are internally or externally driven. (Is your wish to succeed and win an internal necessity or there is a desire to satisfy someone’s will?) Answering Yes to questions 4, 5, 8, 9, and 10 indicates that you possess the internal control aspect of being an entrepreneur. Answering Yes to questions 1, 2, 3, 6, and 7 indicates that you are subjected to external controls which may inhibit your entrepreneurial tendencies.

While internal beliefs appear to differentiate entrepreneurs from general public, they do not differentiate entrepreneurs from managers; both have internal tendency.

 

FEELINGS ON INDEPENDENCE

An entrepreneur is the kind of person who needs to do things in his or her own way and time. To evaluate your feelings on independence answer the questions. Yes answers to questions 1, 4, 5, 8, 9, and 10 indicate that you do not have a strong need for independence.

Checklist for Feelings on Independence

1. I hate to go shopping for clothes alone.
2. If my friends don’t want to go to a movie I want to see, I will go by myself.
3. I want to be financially independent.
4. I often need to ask other people’s opinions before I decide on important things.
5. I would rather have other people decide where to go out.
6. When I know I’m in charge, I don’t apologize, I can’t do it, I just do what has to be done.
7. I will speak up for an unpopular cause if I believe in it.
8. I’m afraid to be different.
9. I want the approval of others.
10. I usually wait for people to call me to go places, rather than intrude on them.

RISK TAKING

Virtually all the definitions of an entrepreneur indicate a risk-taking component. Indeed, risk taking, whether financial, psychic, or social, is a part of the entrepreneurial process. You can assess your risk-taking behavior by answering the questions. If you answered Yes to questions 2, 5, and 9 you may need a greater willingness to take risks.

Checklist for Willingness to Take Risks

1. Can you take risks with money, that is, invest, and not know the outcome?
2. Do you take an umbrella with you every time you travel? A thermometer?
3. If you’re frightened at something, will you try to conquer the fear?
4. Do you like trying new food, new places, and totally new experiences?
5. Do you need to know the answer before you ask the question?
6. Have you taken a risk in the last six months?
7. Can you walk up to a total stranger and strike up a conversation?
8. Have you ever intentionally traveled an unfamiliar route?
9. Do you need to know that it’s already been done before you’re willing to try it?
10. Have you ever gone on a blind date?

 

ENTREPRENEUR BACKGROUND

While a wide variety of aspects of an entrepreneur’s background have been explored, only a few have differentiated the entrepreneur from the general populace or managers. The background areas explored include childhood family environment, education, personal values, age, and work history.

 

CHILDHOOD FAMILY ENVIRONMENT

In terms of the occupation of the entrepreneurs’ parents, there is strong evidence that entrepreneurs tend to have entrepreneurial fathers as male entrepreneurs. Female entrepreneurs appear to have entrepreneurial mothers. Parents are supportive and encourage independence, achievement, and responsibility.

 

EDUCATION

While it is frequently stated that entrepreneurs are less educated than the general population, the research indicates this is clearly not the case. Education is important in the upbringing of the entrepreneurs. Its importance is reflected not only in the level of education obtained but in the fact that it continues to play a major role in helping to cope with problems and correcting deficiencies in business training. Although a formal education (a diploma in a pocket) is not necessary for starting a new business, as reflected in the success of such entrepreneur high school dropouts as Andrew Carnegie, William Durant, Henry Ford, it does provide a good background, particularly when it is related to the field of the venture. Entrepreneurs need education in the areas of finance, strategic planning, marketing (particularly distribution), and management. The ability to deal with people and to clearly communicate in the written and spoken word is important in any entrepreneurial activity.

 

PERSONAL VALUES

While there have been many studies indicating that personal values are important for entrepreneurs, these studies often fail to indicate that entrepreneurs can be differentiated on these values from managers, unsuccessful entrepreneurs, or even the general populace. For example, while entrepreneurs tend to be effective leaders, this does not distinguish them from successful managers. While personal values, such as support, aggression, benevolence, conformity, creativity, etc. are important for identifying entrepreneurs, they often also identify successful individuals as well. However, a successful entrepreneur is usually characterized as an honest person in doing business.

 

AGE

In terms of chronological age, most entrepreneurs start their entrepreneurial careers between ages of 22 and 55. Earlier starts in an entrepreneurial career are better than later ones. Generally male entrepreneurs tend to start their first significant venture in their early 30s, while women entrepreneurs tend to do so in their late 30s.

 

WORK HISTORY

Work history is important both in the decision to launch a new entrepreneurial venture and in the growth and eventual success of the new venture. Experience areas particularly are: obtaining financing, such as bank financing; developing the best product or service for the market; establishing manufacturing facilities; developing channels of distribution; and preparing the marketing plan.

As the venture becomes established and starts growing, managerial experience and skills become increasingly important.

It is generally easier to start a second, or third venture than to start the first one. The need for entrepreneurial experience increases as the complexity of the venture increases.

 

MOTIVATION

What motivates an entrepreneur to take all the risks and launch a new venture? Although many people are interested in starting a new venture and even have a background and financial resources to do so, few decide to actually start their own businesses. Individuals who are comfortable and secure in a job situation, have a family to support, like their present life-style and predictable leisure time often do not want to take the risks associated with venturing out alone.

The most often reason for becoming an entrepreneur is independence – not wanting to work for anyone else. This desire to be one’s own boss is what drives both male and female entrepreneurs to accept all the social, psychic, and financial risks and to work the numerous hours needed to create and develop a successful new venture. Money is the second reason for starting a new venture for men while job satisfaction, achievement, opportunity, and money are the reasons in rank order for women.

 

ROLE MODELS AND SUPPORT SYSTEMS

One of the most important factors influencing entrepreneurs in their career choices is role models. Role models can be parents, brothers or sisters, other relatives, or successful entrepreneurs.

An entrepreneur needs a strong support and advisory system in every phase of the new venture. This support system provides information, advice, and guidance on such matters as organizational structure, obtaining needed financial resources, marketing, and market segments. As initial contacts and connections expand, they form a network.

It is important for every entrepreneur to establish a moral-support of family and friends. Not only can friends provide advice that is often more honest than that received from other sources, but they can also provide encouragement, understanding, and even assistance.

Relatives can also be strong sources of moral support to overcome the many difficulties and problems.

In addition to moral encouragement the entrepreneur needs professional support. This advice can be obtained from a mentor (a teacher, consultant), business associates in trade associations (buyers of the venture’s product or service; lawyers, or accountants; suppliers of the goods or services to the venture (help to establish credibility) – business counterparts – word of mouth advertising.

 

MEN VERSUS WOMEN ENTREPRENEURS

Men make up the majority of people who start and own their own businesses.

Men are often motivated by the drive which often stems from disagreements with their bosses or a feeling that they can run things better. In contrast, women tend to be more motivated by independence and achievement arising from job frustration.

For men, the transition from a past occupation to the new venture is often facilitated when the new venture is an outgrowth of a present job. Women, on the other hand, often leave a previous occupation with only a high level of enthusiasm for the new venture rather than experience, making the transition more difficult.

Start-up financing is another area where male and female entrepreneurs differ. While males often list investors, bank loans in addition to personal funds as sources of start-up capital, women usually rely solely on personal assets or savings.

Occupationally, there are differences between male and female entrepreneurs. Men more often are recognized specialists in their fields or have attained competence in a variety of business skills. Their experience is often in manufacturing, finance, or technical areas. Most women, in contrast, usually have administrative experience, usually in more service-related areas such as education, secretarial work, or retail sales. The result is often smaller female-owned businesses with lower net earnings.

In terms of personality, there are strong similarities between male and female entrepreneurs. Both tend to be energetic, goal-oriented, and independent. However, men are often more confident and less flexible and tolerant than women, which can result in different management styles driving the new venture.

 

GLOSSARY:

sustain keep strong
inhibit hold back
blind date a meeting between two people who have not met before
benevolence a wish to do good
conformity act in accordance with established rules

QUESTIONS FOR DISCUSSION

1. What is gained from analyzing the characteristics of entrepreneurs?
2. Recalling the definition of entrepreneurship (English No.6, 2000), what characteristics would you expect to find in a typical entrepreneur?
3. Why do you think that some successful entrepreneurs have had difficulty in managing their companies beyond the start-up stage? How could entrepreneurial education help this problem?
4. How do you think male and female entrepreneurs will differ in 10 years?

 

Compiled by Vladimir Pavlov,
The Moscow Institute of Business Administration