There are certain traits and attitudes that make some people more suited to running a successful small business than others. What those traits and attitudes are though, depends on who you're asking and to a degree, on how you define an entrepreneur.
When You Ask Entrepreneurs Themselves...
In one study where entrepreneurs were given a list of attributes and asked to rate their importance for success, the seven most highly ranked characteristics of an entrepreneur were:
- The desire and willingness to take the initiative
- A strong need to achieve
- Good physical health
(William E. Jennings, "A Profile of the Entrepreneur" in Entrepreneurship: A Primer for Canadians).
None of these are particularly surprising; you'd expect a person who was a successful entrepreneur to be self-reliant and self-confident. The entrepreneur characteristics that the same group ranked as least necessary for success may surprise you, though; a strong desire for money, patience, being well organized, and have a need for power all ranked at the bottom of the list.
Human Resources Development Canada presents a very similar view of the qualities needed for entrepreneurial success. Their "Reality Check for Small Business Owners" emphasizes qualities such as persistence, self-confidence, and flexibility.
For instance, entrepreneurs "believe that they control their own destiny, they refuse to be at the mercy of others or of events. As a result, they take the initiative in starting projects and getting ideas off the ground."
Not all surveys asking entrepreneurs what the consider to be the vital characteristics of entrepreneurship give the same results though. For instance, Ryan Westwood, co-founder, and CEO of Simplus, working with an expert team of researchers and academic colleagues, designed a web survey inviting 10,000 business CEOs and company founders to select the top five personality traits of successful entrepreneurs. The survey presented 23 personality traits commonly associated with entrepreneurial success. The results:
- Vision - 61%
- Work ethic - 45%
- Resilience - 41%
- Positivity - 35%
- Passion - 34%
In his analysis of the survey results "The Traits Entrepreneurs Need To Succeed," (Forbes), Mr. Westwood comments that vision, the ability to develop a clear path forward in the quest to accomplish lofty goals and ambitions, seems to be a more universal, essential trait than any other, crucial to entrepreneurial success at multiple stages of a business’s development. Vision is just as important to a longstanding business as it is to a startup.
Research Into the Characteristics of an Entrepreneur
It's interesting to compare the list of characteristics of an entrepreneur from Ryan Westwood's survey with these "5 Ps of Entrepreneurial Behavior" from Chapter 2 of Entrepreneurial Small Business (Jerome A. Katz and Richard P. Green II, 2014). These "5 Ps" are aspects of behavior that most successful entrepreneurs display, according to academic research. (You can read about them in more detail in the chapter cited.)
- Passion - An intense positive feeling the entrepreneur has toward the business or even the idea behind the business.
- Perseverance - The ability to stick with some activity even when it takes a long time, and when a successful or unsuccessful outcome is not immediately known.
- Promotion/Prevention focus - Successful entrepreneurs are adept at balancing their promotion focus, intent on maximizing gains, and their prevention focus, intent on minimizing losses.
- Planning Style - There are five different ways of planning and comprehensive planners, those that take a long-term view, develop long-range plans for all aspects of the business, are comfortable with planning, and act based on the plans they’ve developed, are the most successful entrepreneurs.
- Professionalization - Successful entrepreneurs normally do at least one thing much better than average. Professionalization is the ability to meet or exceed the standards of a particular industry.
Vision, you'll notice, is not mentioned at all, and while passion is mentioned, there's not much overlap in the rest of the list.
This may be in part because research into entrepreneurship suffers from a habit of comparing apples and oranges. Many of the studies that investigate the personality of the entrepreneur have focused on the traits that set them apart from general business managers, high-growth settings or firms financed by venture capital (VC), where entrepreneurs face a high probability of their business failing, a very small probability of extremely positive outcomes, and a possibly low average return to the monetary and time investments made into their businesses (Sari Pekkala Kerr, William R. Kerr, Tina Xu, Personality Traits of Entrepreneurs: A Review of Recent Literature, Harvard Business School).
But academically the term entrepreneur also applies to all kinds of entrepreneurial activity, from those running small retail stores on Main Street and those running internet businesses out of their homes as well as students attending entrepreneurial classes or participating in entrepreneurial boot camps. The latest research show that these different groups of entrepreneurs behave very differently and the typical personality traits of individuals will vary greatly by a form of entrepreneurial activity (Sari Pekkala Kerr, William R. Kerr, Tina Xu, Personality Traits of Entrepreneurs: A Review of Recent Literature, Harvard Business School).
What Characteristics Do You Need to Become a Successful Entrepreneur?
When twenty-one inductees into the Babson Academy of Distinguished Entrepreneurs were questioned about the principal reasons for their success, only three abilities were mentioned by all twenty-one successful entrepreneurs:
- Responding positively to all challenges and learning from mistakes
- Taking personal initiative
- Having great perseverance
("Assessing Your Potential for an Entrepreneurial Career", Manitoba Industry, Trade, and Tourism.) As the authors point out, all three of these successful entrepreneur behaviors can be learned!
Do You Have the Characteristics of an Entrepreneur?
If you like quizzes, you'll like an Entrepreneurial Self-Assessment from the Business Development Bank of Canada. Once you answer these questions and press submit, you’ll see a score that shows how your answers compare to the personal background, behavior patterns, and lifestyle factors of proven, successful entrepreneurs.
Like short and sweet? The BBC offers a two minute Would you make a good entrepreneur? Quiz
When you're wondering if you're suited to start your own business, quizzes are fun, but it's important to remember that getting a low score on any of these "tests" doesn't mean that you're not cut out to be an entrepreneur and that you should forget all about ever starting a small business. Research leads to many generalizations that are not true in the individual case — and you may be the exception.
What do you really want to do and why do you want to do it? "Do what you love" is still sound advice; having a passion for what you do will fuel your commitment and give you the energy you need for the long haul. Thinking of starting a small business? What is your "burning desire" and how can you shape it into a reality that will provide you with both satisfaction and a profit? That's the main question you have to answer when starting a small business of your own.