Entrepreneurial Characteristics

Introduction

This topic starts at the very beginning. Before we can explore what entrepreneurs do, we must first understand what makes someone an entrepreneur. We will look at why people become entrepreneurs and identify common characteristics many of them seem to share.

The dictionary definition of an entrepreneur is:

“A person who organises and manages any enterprise, especially a business, usually with considerable initiative and risk.”

Catagories

There are four main categories of entrepreneurs which we can see by measuring a person’s intent and capacity, and by predicting the market potential of their ideas.

Motivations

Each person has their own personal reasons for becoming an entrepreneur. Some start companies in search of personal wealth, others want to create social good or have family reasons. Where there is technical innovation involved, that improvement can be a good reason for someone to try to make a product out of it that can cause a change in the market.

Purpose

Once someone has an idea and the motivation to pursue it, they need a purpose. This involves understanding the significance and scope of their goal and what capacity their idea unlocks. They need to think about the benefits of commercialising their idea and what boundaries to put in place to ensure they can stay on track.

Characteristics

Some academics who have been studying businesses for many years and have seen many entrepreneurs succeed and fail have come up with a list of 5 traits that they say all entrepreneurs have. It should go without saying that just because someone doesn’t fit this model that doesn’t mean they will not become an entrepreneur, this is meant to be a guide.

• Need for achievement
  Whether it’s being recognised for what they accomplish or simply that they like to challenge themselves, entrepreneurial people tend to seek out goals that have high steaks.

• Need for autonomy
  Many people have things that they may disagree with their boss on, but some people want the freedom to make their own decisions. They may prefer to work alone or build a team where they are the leader.

• Creative tendency
  There are many businesses out there that all do the same thing, but to start a new one you often have to do something original to get noticed.

• Calculated risk-taking
  It is a big step to even start a new enterprise, to make the kind of decisions that can mean life or death for a business is even more difficult. The bigger the risk, the bigger the reward can be if they work out.

• Locus of control
  Having an internal locus of control means that you believe that you have control over the factors that will decide the ultimate outcome of your venture.

Tendency vs success

Be aware that all of the above is referring to a person’s entrepreneurial tendency, whether they are likely to fall into the ‘inventing entrepreneur’ category. Just having that tendency is not any guide to predicting if someone will eventually be successful or not, 90% of new businesses fail and shutdown.