Top 10 Characteristics of an Entrepreneur

Last month, we debunked common myths about entrepreneurs. In this post, discover why entrepreneurs savor going to work while many 9-5’ers count the days to retirement.

These are 10 characteristics of entrepreneurs:

  1. Don’t Fit In

One commonly-cited reason individuals become entrepreneurs is the belief s/he does not fit in the ‘corporate’ environment.  This includes those who simply don’t like to be told what to do.  Most entrepreneurs are, at least in the beginning, hands-on and enjoy working beside the one or two employees on the floor, behind the counter, or on the phone creating sales. The term ‘corporate’ culture only defines a segment of the entrepreneurial profile.

  1. Want to Escape The “Rat Race”

Entrepreneurs want to escape the 9 to 5.  This may happen as the business progresses, but it is rarely a goal achieved immediately.  For example, my uncle opened a machining shop with the idea he could close at 4.  As a result, his business quickly failed.

  1. Possess A Strong Eagerness to Learn

Learning is key to entrepreneurs.  Though this may be a passion for many of us, entrepreneurs look at ideas and learning experiences with the view of improving their business, not just themselves.  Entrepreneurs think differently, at least when it comes to their business.  They ask “how” rather than “how not”; “why not”, instead of “why”.

  1. Are Creative By Nature

Entrepreneurs are unconventional and creative.  Matthew Toren quotes Albert Einstein in his article 6 Genuine Reasons Why People Become Entrepreneurs (Entrepreneur Magazine), which says “Logic will get you from A to B. Imagination will take you everywhere.”

  1. Prefer to Create Their Own Future

Creating their own destiny is key.  You hold the keys to your success.  True for all, critical for entrepreneurs.

  1. Choose to Pursue Their Own Passions

Entrepreneurs develop and sell products and services they love.  This takes the saying “do what you love, and the money will follow” to the ultimate degree.

  1. Desire to Be Experts

Entrepreneurs enjoy being perceived differently than others, as experts in their field.   This feeling of being appreciated is the second most important level on Maslow’s Hierarchy of Needs: prestige and feeling of accomplishment.

  1. Highly Value Flexibility

Freedom of choice in who s/he work with, including customers as well as employees.  While many entrepreneurs will state there are few customers they won’t work with, the ability to make that decision exists.

  1. Hate Dealing with Boredom

If boredom creeps in, changes can be made.  This can vary from new production techniques to a new marketing campaign to delegating certain responsibilities, but the ability to tackle a challenge whose resolution pays off is important.

  1. Aspire to be Socially Responsible

Responsibility to society is often cited as an entrepreneurial incentive.  Whether this need to make a difference is in their industry, their community or with their employees, contributing is important.

 

One other reason I read across many articles is you can never be fired.  Not true!  The inability to adapt to a changing market and the idea that one is irreplaceable are just two of the many ways in which entrepreneurs can be ‘fired’.  They stifle their business.  Though they may not be leading their business down the road to extinction, they certainly are creating a situation where cash flow and value are unoptimized.  My response is, “Why would you want to do that?”

 

Recession Survey Results

As promised, we repeated our economic survey to compare results between December 2018 and today.

 

In December, we noted:

More than a third of top economic forecasters now predict a U.S. recession in 2020.  Some pundits and politicians are predicting a recession as soon as 2019. A few say a recession’s not happening any time soon.

 

This week, it is reported by the National Association of Business Economics that three quarters of top economists predict a full-blown recession by 2021.

 

A snippet from their report reveals the following: “While only 10% of panelists expect a recession in 2019, 42% say a recession will happen in 2020, and 25% expect one in 2021. A majority of panelists also indicated they would be worried about a budget deficit in the U.S. that equaled up to 4% of gross domestic product (GDP). This is an outcome which will likely occur in 2019 given the deficit for fiscal year 2018 was 3.85%, and respondents expect spending policies to increase the deficit compared with the Congressional Budget Office’s current 10-year baseline estimate.”

 

In comparison, here’s how our poll results changed from December 2018 to March 2019:

Weighted Average Response
Question 12/2018 3/2019 Change
The Fed is raising interest rates too quickly, a recession will result 5.86 4.92 -0.94
The recent (late 2017) stock market turmoil is a strong indicator that investors are worried about a recession 6.61 5.52 -1.09
The GDP growth in the 3rd quarter 2018 rising at an annual rate of 3.5% shows a recession is far off 5.40 5.32 -0.08
With unemployment at 3.9% in October, wage growth at 3.1% over the last 12 months and the CPI rising 2.5% over the last 12 months, a recession will not occur within the next year 6.58 6.52 -0.06

 

Overall, there is a decreased expectation for a recession in the near term.  Though much of this decline is centered on the impact of both the Fed raising interest rates and of the late 2018 stock market decline, respondents appear to believe that the economy’s outlook is improving.  This contradicts the National Association of Business Economists report cited above.

 

In our March poll update, 40% of respondents believe there is not enough information available to back an opinion of whether there will be a recession or when it may occur.  However, approximately 30% of the respondents predict there will be a recession in 2020 with the balance projecting a recession in 2021.

 

Thank you for completing the poll. We appreciate your insight.

5 Entrepreneurship Myths Debunked

The information found on Kauffman Indicators of Entrepreneurship’s site: https://indicators.kauffman.org/ is quite interesting and intriguing.  It contradicts several widely-held ideas about entrepreneurship that many non-entrepreneurs hold.

Here are 5 common entrepreneurship myths that have been debunked by Ewing Marion Kauffman Foundation:

1. New Business Survival Rate

The Myth: Small businesses mostly fail in their first year of operations.

The Reality:  More than 75% of new businesses survive past their first anniversary. This rate has been surpassed since 1996. Even in the height of the last recession in 2007 to 2008, most new businesses survived.

Source: Kauffman Indicators of Entrepreneurship Survey 2017. Published January 2019

2. Startups as Employers

The Myth: Startups don’t employ workers other than the sole owner

The Reality: While the number of hires is reported as declining in recent years, in their first year, startups employ at least 4 workers. The US Small Business Administration’s Office of Advocacy in its 2018 Small Business Profile indicated that small businesses employ 47.5% of US workers.

Source: Kauffman Indicators of Entrepreneurship Survey 2017. Published January 2019

3. Who Starts Small Businesses

The Myth: The unemployed start most small business because they cannot find a job.

The Reality: Historically, over 70% of new businesses are started by opportunists, not by what Kauffman classifies as “necessity entrepreneurs.”

Source: Kauffman Indicators of Entrepreneurship Survey 2017. Published January 2019

4. The Age of Startup Entrepreneurs

The Myth: Startups are for young people.

The Reality: Those under 34 are the least active as startup entrepreneurs. The other age groups are more active. Note the following table reports the average monthly rate of startups per 100,000 people by age group.

Source: Kauffman Indicators of Entrepreneurship Survey 2017. Published January 2019

5. Entrepreneurs and Education

The Myth: Entrepreneurs hold at least an MBA.

The Realty: Entrepreneurs’ level of education is varied. College graduates are the lowest source of entrepreneurs.

Source: Kauffman Indicators of Entrepreneurship Survey 2017. Published January 2019

While the study by Ewing Marion Kauffman Foundation does not detail the ongoing success nor the type of business started, it confirms my long-held belief entrepreneurs are the type of people that pull themselves up by the bootstraps and get things done.