Are you self-confident and eager to get things done quickly? Do you have a tendency to operate on your gut instinct? Do you act to make things happen rather than wait for things to happen to you? If you see yourself in these descriptions, you may be born to be an entrepreneur.
According to The Entrepreneur Next Door, a report sponsored by the Ewing Marion Kauffman Foundation, entrepreneurship is as prevalent in American Society as is marriage or the birth of a baby. “About 6.2 in every 100 U.S. adults 18 years and older are engaged in trying to start new firms,” finds the Panel Study of Entrepreneurial Dynamics (PSED). That’s 10.1 million adults attempting to create new businesses at any given time.
But what makes some of those entrepreneurs fail and others succeed? Are those who can sustain a business enterprise simply more skilled—do they have superior knowledge of finance, marketing, and accounting? Or are there innate traits, as some have suggested, that determine whether you’ll be a successful entrepreneur? Are certain people born to start businesses and others doomed to failure if they don’t carry the gene—be it for risk-taking or focus or creativity—that is required?
“We think of it as a combination,” says Professor Tim Faley, managing director of the Zell & Lurie Institute for Entrepreneurial Studies at the Ross School of Business, the University of Michigan. “There is a set of skills that includes the ability to identify opportunities, formulate a business plan, align resources, and execute on all of it.”
Management researchers Donald Kuratko and Richard Hodgetts (2001) believe that entrepreneurial traits include aggressiveness, initiative, drive, analytical ability, and skill in human relations. Further, they find that, while risk is an element of the entrepreneurship process, the entrepreneur is usually operating on a moderate or calculated risk, not taking a wild chance—although it may appear so to outsiders.
Yet another entrepreneurial trait is tolerance for ambiguity. Faley refers to a study by well-known entrepreneurship researcher Elizabeth Gatewood. “Gatewood wanted to know what the difference was between corporate executives and entrepreneurs and found that both groups have very similar character traits,” remarks Faley. “The main difference between them is their tolerance for ambiguity.” Entrepreneurs had a high tolerance for ambiguity, but whether that trait is innate or conditioned is unknown.
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