Do you have the personality and mindset to be a successful entrepreneur or small business owner? How do you know?
One of the hidden causes of new business failures is a little known fact. It is that some people are just not suited to owning a business. The good news is there is a way to reduce that risk.
That is to work out whether you possess an entrepreneur’s personality and mindset before you start a business and not after.
Starting any business involves a certain amount of risk. But, the more you understand what they are, the better your decisions are likely to be. You’ll be able to better balance the risk versus the opportunity. Because, of course, there are no guarantees in business.
Try the “Should I Own a Business?” Entrepreneur Personality Quiz.
Is there a difference between an entrepreneur and a business owner?
The word “entrepreneur” has been hijacked in recent years. Everyone talks about it. From “tech startups” to marketing gurus and those well-known, global business websites.
At the end of the day, the entrepreneur vs business owner debate is nonsense. I’m sure some people call themselves an entrepreneur purely as a form of snobbery.
An entrepreneur is simply someone who takes on a business risk in the hope of financial gain.
This basically means all business owners are entrepreneurs. It doesn’t matter whether they start a business from scratch, buy one or own a franchise. Being an entrepreneur has nothing to do with the type or size of business you run. Age has little to do with it as over 50s and younger people are starting businesses.
The content on this site is for ordinary people who want to start any type of business. Therefore, we use the terms entrepreneur and business owner interchangeably.
What is personality?
We define personality as the natural type of person you are. This includes how you think and feel about things. And, how you act and behave. We believe your personality is innate and makes you who you are.
The mindset of an entrepreneur or business owner
Your mindset is an attitude of mind that determines how you react to situations. Your mindset can change, and effectively complements your personality. This is why we talk about the importance of both personality and mindset for business owners.
Combining your personality traits with the “business owner mindset” is a crucial part of the success equation.
Why is your personality and mindset more important than your business idea?
Most advisors will tell you to write a business plan. It’s good advice but proper business planning alone doesn’t prevent business failures from happening. Unfortunately, success is not as simple as writing a good business plan or having a great idea.
No matter how good your idea is, it won’t amount to anything unless you can make it happen.
Podcast Episode 2 You-360 explains how difficult it is to separate the business owners’ personality from the business.
What if owning a business makes you unhappy because you had no idea what it entailed? How do you know if running a business will suit your personality unless you have some prior business experience?
Business failures not only destroy your finances, but they can also ruin your relationships. It should not be trivialized or underestimated. It is undeniable that the stakes are very high for many new entrepreneurs.
Take our simple entrepreneur personality quiz.
Unfortunately, many new entrepreneurs are not aware of what is involved in owning a business. That, combined with a lack of insight into their own strengths and weaknesses, can be a recipe for disaster.
So, to help you take the first steps towards understanding how ready you may be to start a business, we’ve put together a simple quiz. It will shine a light on some basic character traits you may have.
The quiz is an easy thing you can do as a part of your preparation for business ownership. But preparation is also about equipping yourself with knowledge:
- understand what a business owner does and whether those things suit your personality;
- gain an insight into the mindset of an successful entrepreneur;
- learn how to prepare before getting into business.
Of course, undertaking thorough preparation may provide an unexpected result. You may decide that owning a business does not excite you! You may discover that you are not as suited to it as you thought you were. And, in pulling the pin now, you will save yourself time, money and a lot of heartache! Now, wouldn’t that be a great result?
Here are seven areas that you can consider to improve your chance of success.
Business Owner Resilience
The one characteristic that stands out about successful business owners is their resilience.
Successful business people absorb stress, setbacks, defeats and challenges and keep bouncing back. Often they seem to have a drive and internal strength to draw on when things don’t go to plan. Some business owners seem pretty immune to burnout.
Their resilience also goes hand in hand with self-motivation and being highly resourceful when problem-solving.
Owning a business can be tough, and if you are not resilient, you may struggle.
Resourcefulness To Overcome Challenges
Business owners need to be very resourceful to overcome the many challenges that occur.
Finding creative ways around obstacles to keep customers happy, costs down, and employees motivated is non-stop.
How resourceful are you naturally? If you rely on other people to solve problems, think about how you will feel if they are not involved.
Protecting Your Relationships
Your business can be very needy. It will make demands on you, your relationships and your finances. Often when you least need it too!
Frankly, it doesn’t care about your life!.
Relationships with your partner, friends and family can become strained by two main triggers:
- lack of time available for the important people in your life
- lack of money because of the way your business is performing or growing
Listen to Episode 21: How starting a business can affect your family. It provides great insight, through personal experience, into how your relationships can be challenged through a business life cycle.
One very important self-assessment before you start or buy a business is your relationship. How stable are they? How you will go about protecting them from the ups and downs of business ownership?
Comfort Zones Cause Business Failures
As a business owner, your comfort zones will get challenged frequently.
For example, you might be uncomfortable meeting people or being the person responsible for generating sales in your business.
Extroverts are often comfortable with sales and marketing tasks. They can confidently talk to strangers or engage with people through cold calls. Importantly, they tend to deal with rejection like water off a duck’s back.
More introverted types find this very uncomfortable and often avoid these situations. The process of acquiring new customers can be very stressful for some people.
Other challenges can be handling confrontation and conflict, which are almost inevitable at some point.
Procrastination can be a business killer! But since making decisions is a daily event in business, it’s something that new owners must become good at.
In short, you need to become comfortable with being uncomfortable!
Business Owner Mindset
You need to accept and embrace the transformation into a business owner with a different mindset to an employee.
Walking away from issues isn’t an option. You must find the solutions.
Successful business owners are self-motivators and have a “never give up” attitude. They have a Money Mindset that enables them to budget and make sacrifices to fund their business growth. Usually, they are frugal and spend their money like an external investor in their business would.
They accept short to medium term sacrifice for their longer-term business success.
Accepting the risk you are taking and committing 100% effort is imperative as half-hearted effort does not work.
Will you have a mindset that compensates for those areas of your personality that perhaps need improvement? For example, will you be able to deal with procrastination if that is something you tend to do?
Adopting a Money Mindset for Business Success is important.
If you haven’t already, create budgets for both your personal and business finances. Include all your incoming and outgoing funds. Do they point towards a shortfall? Will you need to make any short to medium-term sacrifices to get your business off the ground?
There are plenty of other elements of your finances to consider when you are thinking of starting a business. This is a great article for more about the Money Mindset
The Mindset of an Entrepreneur
New entrepreneurs often lack business experience. They learn through trial and error. It is a time-consuming and costly way to learn.
Unfortunately, some fail before they work it out. Don’t be one of them!
As a consequence of that lack of business knowledge, many people start businesses that are doomed to struggle. No matter how hard they work.
They invest time, money, and emotional energy in businesses that will, at best, be the equivalent of a job. Often a poorly paying one at that.
There is a lot of hype about starting a business. Especially those “lifestyle businesses” that promise high income and success for little effort. Unfortunately, for the vast majority of people, these are simply “pie in the sky.” While it is possible, it is also unlikely that little effort brings big rewards.
Having realistic ambitions about your motivation, goals, and your business’s ability to serve them is wise.
Developing a compelling business model and a simple and effective strategy based on business knowledge is good business sense.
Having a mindset to continually improve your business knowledge is crucial to your long term success.
One way to boost your knowledge quickly is to use a business mentor.
Crafting a business culture that complements your own personality, values and business purpose is crucial for your personal satisfaction. If these these don’t align you may feel some angst.
Your business success is down to your personality and mindset, not how good your idea is.
You can see that these seven aspects have nothing to do with which business you may eventually own. They are all about you, the owner.
Having a great business idea is no guarantee of success. Your idea will not get anywhere unless you are able to build a successful business upon it.
Which areas from this list might you need to improve before you start your business?
Why not try our free Entrepreneur Personality Quiz?
Have a look at how to work out if your business idea is viable and suitable for your personality and ambition.