The characteristics of an Entrepreneur

Posted on April 14, 2024 by Martin Hahn, One of Thousands of Career Coaches on Noomii.

Several years ago, someone asked H. Ross Perot, who had made hundreds of millions of dollars starting Electronic Data Systems Inc. and then Perot Systems Inc., what his advice would be for people who hoped to be entrepreneurs. Perot said, “Never give up, never give up, never give up.” His advice highlights an entrepreneurial dilemma. On the one hand, there’s no doubt that tenacity is a crucial trait for entrepreneurs, because creating something out of nothing is so difficult. On the other hand, tenacity gets the entrepreneur only so far. It is only one entrepreneurial trait among many.

Research Findings

What does it take to be a successful entrepreneur? Psychologists have studied this question with mixed results. Based on some studies, researchers say that the entrepreneur’s personality characteristics include self-confidence, a high level of motivation, a high energy level, persistence, initiative, resourcefulness, the desire and ability to be self-directed, and a relatively high need for autonomy. This certainly makes sense. Others argue that people high in the need to achieve are more prone to be entrepreneurs because they like to set goals and achieve them.

Yet high-need-for-achievement people are no more likely to start businesses than those with a lower need. One expert concludes that the trait approach to identifying entrepreneurs is “inadequate to explain the phenomenon of entrepreneurship.”

Recent studies are more positive. Some studies focus on the proactive personality. Proactive behavior reflects the extent to which people take action to influence their environments. One study of 107 small-business owners found some support for the notion that proactive personality contributes to innovation in some circumstances.

Still others study what they call the dark side of the entrepreneur. They say less positive traits drive entrepreneurs, traits like the need for control, a sense of distrust, the need for applause, and a tendency to defend one’s operations. This approach doesn’t paint a pretty picture of how some entrepreneurs behave. With respect to the need for control, for instance, a major theme in the life and personality of many entrepreneurs is the need for control. Their preoccupation with control inevitably affects the way entrepreneurs deal with power relationships and the consequences for interpersonal action. An entrepreneur has a great inner struggle with issues of authority and control.

Anecdotal Evidence

A few behaviors do seem to arise consistently in anecdotal and case studies or successful entrepreneurs. As we mentioned earlier, tenacity is one. Entrepreneurs face so many barriers when creating a business that if they’re not tenacious, they’re bound to fail.

Intensity or the drive to pursue a goal with passion and focus is another trait that often pops up. For example, Sky Dayton started EarthLink in the mid-1990s, and the firm is now one of the largest Internet service providers. One friend, who watched him surfing, says Dayton took the sport up with a vengeance. He’s as intense and fearless in surfing as he is in business.

Should You Be an Entrepreneur?

Is entrepreneurship for you? You might answer the following questions, based of the U.S. Small Business Administration:

◗ Are you a self-starter? No one will be there prompting the entrepreneur to develop and follow through on projects.

◗ How well do you get along with different personalities? Business owners need to develop good working relationships with a variety of people, including customers, vendors, employees, bankers, and accountants. Will you be able to deal with a demanding client, an unreliable vendor, or a cranky employee?

◗ How good are you at making decisions? Small-business owners make decisions constantly and often quickly, under pressure, and independently.

◗ Do you have the physical and emotional stamina to run a business? Can you handle twelve-hour workdays, six or seven days a week?

◗ How well do you plan and organize? Research shows that good plans could have prevented many business failures. Furthermore, good organization consisting of employees, finances, inventory, schedules, production, and all the other details of running a business can help prevent problems.

◗ Is your drive strong enough to maintain your motivation? Running a business can wear you down. You’ll need strong motivation to help you survive slowdowns, reversals, and burnout.

◗ How will the business affect your family? The first few years of a business start- up can be hard on family life. The strain of an unsupportive spouse may be hard to balance against the demands of starting a business. There also may be financial difficulties until the business becomes profitable, which could take years.