Are you meant to be an entrepreneur? According to Operation Hope, 43% of children and teens say they want to start their own business one day but less than 15% of adults in the United States are involved in entrepreneurship.
Are some people born to be entrepreneurs while others struggle with the decision or never achieve entrepreneurial success because they were never meant to be an entrepreneur in the first place?
Here are characteristics that show you are meant to be an entrepreneur, according to science.
1. You are a Self-Starter
People who take the initiative and start something like a club in college, for instance, or a weekly get-together for like-minded colleagues typically consider themselves self-starters. Then there are people who think that they are self-starters but they are in fact just play around with ideas without ever taking action.
It turns out, what you believe might matter more than whether you are in fact are a self-starter or not. In a 2015 study, people with self-control who believe they were self-starters turned out to be 1.5 times more likely to become entrepreneurs than others who didn’t think they were self-starters.
Being a self-starter also helps people better cope with failure. Getting back up after a financial or emotional hit without help is important for long-term success. As a result of consistently getting back on their feet, self-starters are persistent. This is not to be confused with patience. Patience implies that one is at ease throughout the “trial period” until something works. Persistence in relation to being a self-starter, on the other hand, implies perseverance, will power, and self-discipline.
2. You Have a Parent who is an Entrepreneur
According to the Young Entrepreneurs Study, also referred to as “The YES Study”, having a parent who is an entrepreneur is one of the main indicators you have chances of being a successful entrepreneur yourself.
Nearly 50% of start-uppers in the study have a parent who runs a business compared to merely 30% of other students. In addition to being surrounded with an entrepreneurial mindset throughout childhood, children of entrepreneurs grow up with the idea that starting a business is a perfectly feasible career path.
To the contrary, children from families with a long history of 9-5 employment may hear frequently to get a job and work hard to make it in life. They may, therefore, grow up with the idea that a job is not only a necessity to gain recognition from society but that starting a business is risky, out of the box and not a real job. The entrance barrier into entrepreneurship is therefore much higher.
3. You are Charismatic
Charisma can be learned, and if you are habitually charismatic or have improved your charisma over time, you are likely to have one important characteristic of successful entrepreneurs. Charisma is a key skill when it comes to winning negotiations and getting people on board with your ideas. Steve Jobs is known to have come across awkwardly at his first presentations and had worked tirelessly on being more charismatic during public appearances.
Charismatic people frequently mimic other people’s body language, also known as emotional contagion. It makes people feel like you are connecting and they can better identify with you. This is the basis for trust, which helps not only in negotiations but many other life and business situations.
4. You are Actively Developing Your Business Skills
According to The Wall Street Journal, people who are actively working on improving their business skills are more likely to become entrepreneurs. Students who are majoring in business or take finance and business classes frequently develop an instinct for investment opportunities and are more financially aware. Both of these skills are an important factor of entrepreneurship.
The difference between flirting with the idea of entrepreneurship and having a feeling you will definitely open your own business one day makes the difference between passively and actively considering the decision to become an entrepreneur. The closer you are to the latter, the more likely you are to translate ideas into reality.
5. You are Improving Existing Concepts
According to Business Insider, creativity plays an important role in entrepreneurship. Three-quarters of aspiring entrepreneurs, compared to 47% of other professions, demonstrated innovative thinking by creatively improving an existing product.
The key learning here is that innovation does not necessarily mean a new product or service has to be invented from scratch but that innovation more often than not is the ability to see flaws and opportunities in existing products or concepts. Innovative people are frequently solution oriented and resourceful when it comes to problem-solving tasks.
Thoughts on Scientific Entrepreneurship Studies
I believe most studies that are trying to decipher a true entrepreneurial personality type ignore the fact that there are several types of entrepreneurs. Science looks at the person who runs a business as the entrepreneur. While most small businesses are run by who Michael Gerber refers to as “technicians” in his bestselling book “The E-Myth Revisited”.
He categorizes business owners in three categories:
- Technicians – The expert, the specialist, the craftsman. A typical technician statement is “If you want it done right, you do it yourself”.
- Managers – The planner, the pragmatic supervisor. Managers spend the vast majority of their time learning from experience and creating predictability.
- Entrepreneurs – The business strategist, the catalyst for change. Entrepreneurs do not operate their business, they make strategic choices to get closer to the bigger picture they have in mind.
To better explain the difference between technician, manager, and entrepreneur, let’s use marketing agencies as an example.
There are people who own marketing agencies but are actually not very good marketers. These are mostly entrepreneurs. As a matter of fact, if several employees got food poisoning and couldn’t come in for a day or two, most entrepreneurs wouldn’t know how to complete their own employees’ tasks. Their skill is to work on a business – not in it – and find people who compensate for their lack of expert knowledge in the field.
Then, there are marketing agencies that are owned by marketers that know every little detail there is to know about their specific expertise such as PPC, SEO, AdWords, Facebook Ads, Social Media Management, and so on. These are the technicians.
They have expert knowledge and focus the vast majority of their day on providing the actual service because that’s what they do best. In an ideal scenario, they hire an office manager or surround themselves with freelancers and virtual assistants to compensate for the managerial side. While it may be beneficial to hire a CEO, most companies never grow to a size where both a manager and a CEO makes sense.
Last but not least, the manager. While the manager frequently also has expert knowledge, the true talent lies in organizing other people’s time and tasks to maximize profitability for the company. This is frequently a COO position.
Does that mean that technicians and managers aren’t entrepreneurs?
Not at all.
It just means there are usually tendencies where people’s talents are best allocated. By following their talents, they can usually make the biggest positive impact by giving in to those tendencies.
Science seems to think that entrepreneurs and managers are the same thing and largely forgets about technicians in many of the studies I have seen. More so, they suggest that technicians cannot be entrepreneurs in the first place. I believe this is due to the fact that technicians frequently acquire their specialist knowledge in employment and not as entrepreneurs. Therefore, they are employed at the point in time most studies are conducted because studies usually focus students and people in their twenties.
Michael Gerber touches upon the highly controversial topic of what makes small businesses successful. According to Forbes, 90% of startups fail so understanding what it takes to be part of the remaining 10% is highly valuable information.
Considering that there is a bit of technician, manager, and entrepreneur in all of us and that we most likely have a tendency to be best at one of the three, Gerber is implying is the following.
- You can be a bad manager and still have a successful business
- You don’t need to know your craft to have a successful business
- As long as you know what your strengths are, you can profitably compensate what you don’t want to focus your time on
I am convinced that entrepreneurial skills can be learned. At the same time, I have received the impression over the last few years that people who enjoy entrepreneurship have always wanted to open a business one day. So if you ask me whether there are people who are meant to be an entrepreneur or not, my answer would be yes.
The path to get there might not always be the same, but if it is meant to happen, an entrepreneur will make it happen.
Additionally, I think a significant percentage of businesses are owned by people who might not fit all the entrepreneurial characteristics science thinks are indicators of entrepreneurship. The question whether science has simply found characteristics that likely result in entrepreneurship or whether results actually show increased chances of being successful in entrepreneurship has not been answered. Considering how many businesses fail, it would be interesting to see studies that reveal characteristics of successful versus unsuccessful entrepreneurs.
Over to you! What do you feel identifies people who are meant to be an entrepreneur?