If you think you want to be your own boss and run your own business, but are not sure you have the right qualifications to be an entrepreneur, listen up. What are the characteristics of an entrepreneur? How does an entrepreneur think? Is your personal profile similar to that of a successful entrepreneur?
David Rye has given this topic some consideration and his presentation is largely based upon his book, which I published several years ago at Adams Media, entitled, How to Start and Operate a Successful Business: Winning the Entrepreneur’s Game.
Until recently, entrepreneurs were not widely studied. There was a general lack of knowledge and information about what made them tick. The recent interest in revitalizing America’s dormant productivity has changed all that. Most business universities now offer courses in entrepreneurship. As a result, business professionals have learned a lot about what it takes to become a successful entrepreneur. Although no one has found the perfect entrepreneurial profile, Rye says there are many characteristics that show up repeatedly. We’ll cover several of these important characteristics of entrepreneurs, which might dispel the entrepreneurial myths.
Rye cites a study based on a series of interviews that were conducted with distinguished entrepreneurs. They were asked what characteristics they felt were essential to success as an entrepreneur.
Good health was a characteristic mentioned by every entrepreneur interviewed. Entrepreneurs, generally, are physically resilient and in good health. They can work for extended periods of time, and while they are in the process of building their business, they “refuse” to get sick.
In small businesses, where there is no depth of management, the leader must be there. You may not be able to afford a support staff to cover all business functions and, therefore, you will need to work long hours. We all know people who use part of their sick leave each year when they are not sick. Entrepreneurs are not often found in this group. At the end of the eight-hour day, when everyone else leaves for home, the entrepreneur will often continue to work into the evening, developing new business ideas.
How important has good health been for me, Bob Adams? On the one hand I’ve been pretty healthy, but on the other hand I had one very hard year running a business. I was taking a very intense medication to eradicate hepatitis C that I had contracted years before. The medication was so intense that I lost 35 pounds, couldn’t sleep for more than an hour, was constantly exhausted, and had terrific headaches. Another time, I had a bad leg injury as a result of my hemophilia, my knee was terribly swollen, and couldn’t leave my house, even on crutches, for several months. Yes, I had employees at the time but I still continued my work.
So I think what matters more as an entrepreneur is not whether you get sick, but if you are still willing to try to work when you do get sick, or at least give it extra effort when you get better.
Entrepreneurs, Rye says, do not function well in structured organizations and do not like someone else having authority over them. Most believe they can do the job better than anyone else and will strive for maximum responsibility and accountability. They enjoy creating business strategies and thrive on the process of achieving their goals. Once they achieve a goal, they quickly replace it with a greater goal. They strive to exert whatever influence they can over future events.
In large, structured organizations, entrepreneurs are easy to recognize by the statements they make: “If they wanted that job done right, they should have given it to me.” A dominant characteristic of entrepreneurs is their belief that they are smarter than their peers and superiors. They have a compelling need to do their own thing in their own way. They need the freedom to choose and to act according to their own perception of what actions will result in success.
Has self-control and maximum responsibility been important for me, Bob Adams? Absolutely. But I think those factors are a lot more important when you are starting out and don’t have a lot of employees. Later, as your organization grows, wanting too much control can become an issue as well. Believe me, I have plenty of employees who will testify to that.
Entrepreneurs, according to Rye, are self-confident when they are in control of what they’re doing and working alone. They tackle problems immediately with confidence and are persistent in their pursuit of their objectives. Most are at their best in the face of adversity, since they thrive on their own self-confidence.
So how important has self-confidence been for me? I think this has been crucial. For me, it’s been particularly important because I constantly have gone into businesses in which I had no expertise and no experience. Every day, people would tell me I had no chance of success. I think entrepreneurs need an extra amount of self-confidence to help make the world go ‘round because so many other people often lack self-confidence. Furthermore, one of the greatest things you can do as an entrepreneur is to help people around you – your employees – find their own self-confidence and their full abilities that people are often naturally reluctant to use.
Sense of Urgency
Entrepreneurs, Rye has found, have a never-ending sense of urgency to develop their ideas. Inactivity makes them impatient, tense, and uneasy. They thrive on activity and are not likely to be found sitting on a riverbank fishing unless the fish are biting. When they are in the entrepreneurial mode, they are more likely to be found getting things done instead of fishing.
Entrepreneurs prefer individual sports, such as golf, skiing, or tennis, over team sports. They prefer games in which their own brawn and brain directly influence the outcome and pace of the game. They have drive and high energy levels, they are achievement-oriented, and they are tireless in the pursuit of their goals.
How’s my personal sense of urgency?
My first answer is that it is burning inside me. Once I have a vision of what I want to do in business, or a new product or service, I want to create what excites me. I can’t wait to see it done, and I am very anxious to see it created. However, at the same time, until I find a business that is compelling, and individual products that I am excited about, I can actually be very slow and deliberate, sometimes frustratingly slow.
Successful entrepreneurs, Rye says, can comprehend complex situations that may include planning, making strategic decisions, and working on multiple business ideas simultaneously. They are farsighted and aware of important details, and they will continuously review all possibilities to achieve their business objectives. At the same time, they devote their energy to completing the tasks immediately before them.
Accounting reports illustrate this characteristic. Accountants spend hours balancing the accounts and closing them out. For them, the achievement is to have balanced books. The entrepreneur only wants to know the magnitude and significance of the numbers in the operation of the business.
Now, what about my personal awareness?
I love strategizing and thinking and planning and taking seemingly complex issues and deciphering them and making them solvable. And I guess I have a little bit of the anti-entrepreneurial accountant in me, because I need to have balanced accounting books, too. I fret when I haven’t balanced my banking account to the penny.
Entrepreneurs, Rye states, accept things as they are and deal with them accordingly. They may or may not be idealistic, but they are seldom unrealistic. They will change their direction when they see that change will improve their prospects for achieving their goals. They want to know the status of a given situation at all times. News interests them if it is timely, and factual, and provides them with information they need. They will verify any information they receive before they use it in making a decision. Entrepreneurs say what they mean and assume that everyone else does, too. They tend to be too trusting and may not be sufficiently suspicious in their business dealings with other people.
Am I realistic?
Yes and no. I think you need to be realistic with day-to-day goals and directions. But on the other hand, to succeed big I think you need to be a bit a dreamer, to be able to envision what might be possible even when others say it’s not. I find a big, powerful dream can be very motivating.
Entrepreneurs, Rye finds, possess the ability to identify relationships quickly in the midst of complex situations. They identify problems and begin working on their solution faster than other people. They are not troubled by ambiguity and uncertainty because they are used to solving problems. Entrepreneurs are natural leaders and are usually the first to identify a problem to be overcome. If it is pointed out to them that their solution to a problem will not work for some valid reason, they will quickly identify an alternative problem-solving approach.
How do I rate on this characteristic?
I am fortunate to be able to comprehend most complex situations quickly, to work with ambiguity. I have learned to brainstorm alternatives. But I would argue that you don’t need to be that smart to run a business successfully. I have seen many people with average or less-than-average intelligence build very successful businesses. But in these cases, it is even more important that you choose a good business to go into, that you follow my advice on building your business with an excellent strategy and solid planning, and that you add very strong employees every chance you can. In fact, these steps are arguably more important than being smart,
Rye finds that entrepreneurs find satisfaction in symbols of success that are external to themselves. They like the business they have built to be praised, but they are often embarrassed by praise directed at them personally. Their egos do not prevent them from seeking facts, data, and guidance. When they need help, they will not hesitate to admit it, especially in areas that are outside of their expertise. During tough business periods, entrepreneurs will concentrate their resources and energies on essential business operations. They want to be where the action is and will not stay in the office for extended periods of time.
Symbols of achievement such as position have little relevance to them. Successful entrepreneurs find their “satisfaction of status” needs in the performance of their business, not in the appearance they present to their peers and to the public. They will postpone acquiring status items like a luxury car until they are certain that their business is stable.
OK, so you may see me driving my “status symbol” Maserati today, but what you don’t see is the old beat up jalopies I used to drive and the tiny basement apartments I called home. I didn’t buy my first new car until I had been in business for 20 years and well after my income was more than a million dollars a year. For me, I always invested in my business first. And today, if somebody said, “Here’s some additional money from your lottery winnings, how are you going to spend it?” I’d be tempted to spend it first on yet another new business.
Entrepreneurs, according to Rye, are more concerned with people’s accomplishments than with their feelings. They generally avoid becoming personally involved, and will not hesitate to sever relationships that could hinder the progress of their business. During the business-building period, when resources are scarce, they seldom devote time to dealing with satisfying people’s feelings beyond what is essential to achieving their goals.
Their lack of sensitivity to people’s feelings can cause turmoil and turnover in their organization. Entrepreneurs are impatient and drive themselves and everyone around them. They don’t have the tolerance or empathy necessary for team building unless it’s their team, and they will delegate very few key decisions.
So am I the typical insensitive entrepreneur?
Over the years, it’s been absolutely true. I’ve always tried to treat people fairly, but I’m a “man with a mission.” I find it hard to understand why a hard-working professional employee wants to spend five minutes at the water cooler the first thing in the morning telling me what his cat did last night. I don’t even like cats.
I do recognize that entrepreneurs with minimal appreciation for people’s feelings can create an issue, because people are sensitive creatures. And as an entrepreneur, I try to recognize that to keep employees onboard you’ve got to try to pay some attention to their feelings.
As the business grows and assumes an organizational structure, entrepreneurs go through a classic management crisis. For many of them, their need for control makes it difficult for them to delegate authority in the way that a structured organization demands. Their strong, direct approach induces them to seek information directly from its source, bypassing the structured chains of authority and responsibility. Their moderate interpersonal skills, which were adequate during the start-up phases, will cause them problems as they try to adjust to the structured or corporate organization. Entrepreneurs with good interpersonal skills will be able to adjust and survive as their organization grows and becomes more structured. The rest won’t make it.
Entrepreneurs have a considerable amount of self-control and can handle business pressures. They are comfortable in stress situations and are challenged rather than discouraged by setbacks or failures. Entrepreneurs are uncomfortable when things are going well. They’ll frequently find some new activity on which to vent their pent-up energy. They are not content to leave well enough alone. Entrepreneurs tend to handle people problems with action plans that lack empathy. Their moderate interpersonal skills are often inadequate to provide for stable relationships.
How do I rate emotionally?
Yes, I’m pretty solid and I’ve had plenty of times that have tested me in business, such as continually being short of cash. But I think many entrepreneurs who feel they must maintain a tough outward appearance to the rest of the world and not confide in their employees risk getting burned out and hurting their performance.
Not matter how tough you think you are, you need to accept that being an entrepreneur can wear anyone down. So, as an entrepreneur, you particularly need a strategy for making it through the tough times. You need a release outside of work, and you need people you can confide in, ideally other entrepreneurs. This thing about entrepreneurs saying they can handle the pressure can be a kind of macho trap. OK, so maybe you didn’t crack up or fall into depression. But continual and grueling pressure in running a business can take a little bite out of you, so you need a strategy to deal with it. Entrepreneurs are human, too. And smart entrepreneurs acknowledge it.
Rye makes a lot of great points about the characteristics of entrepreneurs. I would argue, however, that if you are really determined to be an entrepreneur, then go for it, whether your profile matches that of the typical entrepreneur or not. Your drive to succeed, in and of itself, will be an extremely important determinant of your success. Nonetheless, there are valuable lessons to be learned in looking at the common characteristics of successful entrepreneurs.