Have you ever thought that running your own business might be for you? Entrepreneurship has brought great success for some, but it's not a career path for all. Being in control is great, however the idea of owning and operating your own business is often more glamorous than the day-to-day realities. So, do you think you can handle the stress, hard work and emotional ups and downs that it has brought to others?
A great idea alone is not sufficient for business success: The key to success is your entrepreneurial ability to produce results. So, before embarking on your first business, it's worth spending some time evaluating your own preparedness for entrepreneurship, as well as preparing a great business plan and then carefully evaluating whether the proposed business is likely to be viable.
Entrepreneurial Capabilities
Some of the most common questions on the subject of entrepreneurship are, "What characteristics determine who will be a successful business owner?" and "Why does one person take successful advantage of an opportunity while another person, who's equally knowledgeable, does not?"
Do entrepreneurs have a different genetic makeup? Or do they operate from a different vantage point that somehow directs their decisions for them?
While many studies have been done on the subject, there are no real definitive answers. What we do know is that successful business owners seem to have certain traits in common. These traits fall into four categories:
- Personal Skills.
- Interpersonal Skills.
- Critical and Creative Thinking Skills.
- Practical Skills.
We'll look at each category separately.
Personal Skills
The first things to look at are your personal characteristics, values, and beliefs. Do you have the inner spirit characteristic of successful entrepreneurs?
- Vision – Can you see opportunities for improvement in things, and can you quickly see the big picture?
- Drive and persistence – Are you highly self-motivated and energetic? And are you prepared to work very, very hard for a very long time?
- Initiative – Do you instinctively start projects, and can you quickly see where improvements need to be made?
- Commitment – Do you see projects through to completion?
- Control – Do you enjoy being in charge and making decisions?
- Risk tolerance – Are you able to make decisions when facts are uncertain?
- Resilience – Can you recover from failure?
- Self determination – Do you prefer situations where personal initiative determines success?
While we are born with a certain temperament or personality, the traits listed here can certainly be fine-tuned. However, trying to change your personality completely is much more difficult – some might say impossible. When assessing your entrepreneurial personality, be aware of areas where you are completely at odds with the "average entrepreneur," as you'll need to be able to compensate for possible weaknesses in these areas.
Running your own business is all about working with people. You have to communicate with and satisfy employees, customers, suppliers, shareholders, investors and more. Your ability to communicate with them is critical to entrepreneurial success. The types of interpersonal skills you need to be good at are:
Interpersonal Skills
- Communication skills – Are you competent with written communication?
- Listening – Are you able to really hear what others are telling you?
- Teamwork – Do you work well with others on projects, and are you able to delegate and empower others to get things done?
- Leadership and motivation – Are you able to encourage and inspire others to follow you and your vision?
- Conflict resolution – Are you able to work through your own conflicts with others and help others resolve conflicts among themselves?
- Personal relations – Do you possess basic positive human traits like empathy, sociability, cooperation, consideration and tactfulness?
- Negotiation – Are you able to collaborate with others to reach a win-win solution to differences in position?
- Ethics – Do you have high standards and a record of dealing with people based on respect, integrity, fairness and the truth?
Interpersonal skills are developed over time and some people are more gifted in this area than others. Fortunately, these skills can be learned and developed, and you have to be committed to changing your behaviors and reactions. The more you work with people, the better you become at deciphering the complexity of human relationships. And the great news is that you can learn so many of these skills here at Mind Tools!
The first skill you need is self-awareness, followed by effective goal setting and evaluation.
Critical and Creative Thinking Skills
Entrepreneurs need a well-developed set of critical thinking skills to organize and administer a successful venture. As an entrepreneur, you must be able to find the necessary information to support wise decisions about a venture.
- Creative thinking – Are you able to see situations from a variety of perspectives and present original ideas?
- Problem solving – Are you able to develop good solutions to the problems you are facing?
- Opportunity identification – Do you recognize trends and are you able to generate plans for making your ideas practical and doable?
Creativity and innovation require discipline and are based on a discrete set of skills. This means that you can learn to improve your creative thinking skills and break out of traditional thinking patterns. Read our Introduction to Creativity Skills for specific methods to improve your creativity.
Practical Skills
The final components of entrepreneurial skills are the practical skills and knowledge you need to produce goods or services effectively, and run a company.
- Goal setting – Do you regularly set goals, develop a plan to achieve them and then carry out that plan?
- Planning and organizing – Do you understand the talents, skills and abilities necessary to achieve your goals? And can you co-ordinate people to achieve them efficiently and effectively.
- Decision making – Are you confident in the decisions you make and do you act on them effectively? Do you make decisions based on relevant information and by weighing the potential consequences?
- Knowledge – Do you know enough about business to be successful?
- Business knowledge – Do you have general knowledge in the main functional areas of a business (marketing, finance, operations)?
- Entrepreneurial knowledge – Do you understand how entrepreneurs raise capital?
- Opportunity-specific knowledge – Do you understand the market you are attempting to enter and what needs to be done to bring your product or service to market?
- Venture-specific knowledge – Do you know what needs to be done to make your business successful? And do you understand the specifics of the business you want to start?
Unlike personality traits, interpersonal skills and creative thinking, which depend to some degree on inherent capabilities and aptitudes, you can develop your practical skills to whatever level your commitment takes you.
To gather the knowledge you need to operate a business, you can either learn from the school of hard knocks, or you can learn from others who have started companies similar to the one you are contemplating. Learning by starting your own company is riskier but quicker, while working in someone else's venture defers the time when you can start up on your own, but can equip you with the knowledge and skills you need to make a success of your own business.
No one is born a great planner or goal setter. And nobody has innate knowledge of a business. You learn these things through study and application. To learn more, read our articles on Goal Setting, on Action Plans and on Decision Making.Is Entrepreneurship for You?
Armed with the general information above about what makes a successful entrepreneur, it is your job to evaluate yourself against these basic characteristics. The harder you are willing to work to fill in the gaps, the more successful you will likely be.
Having said that, there are many successful entrepreneurs who are impulsive, vulnerable to risk, and belligerent with employees and customers; others have no business knowledge and have simply hired the talent they needed.
The desire to be an entrepreneur probably trumps all the characteristics mentioned. Alone, though, this desire is not sufficient. This is where your analysis comes in.
- Talk to as many successful entrepreneurs in your community or industry as possible, and find out to what they attribute to their success, and how they see the world.
- Using the list above and any new attributes you gather, identify your own talents, skills and qualities.
- Reflect on each and identify areas of weakness.
- Develop goals to improve your skills and capitalize on the strengths you currently have.
- Look at your skill areas and ask yourself:
- How can these work together?
- What is realistic for me?
- What is my lifestyle preference?
As you work through your analysis, a decision will probably come to you. You may feel you are ready to take the plunge into your own venture. You might decide to wait and develop your skills further. You may even decide that entrepreneurship is not for you.
Whatever your choice, it has to be the right one for you. Owning one's own business is not for everyone. Go through the analysis now instead of risking a lot of capital and time, only to find out later that this career option doesn't fit with your desires and innate talents.