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3 Confrontation with Risk, Characteristics of Successful Entrepreneurs: GEE 003-CE42S4 - General Education Elective 3

1.3 Confrontation with Risk,

Characteristics of Successful
Entrepreneurs
The Entrepreneur's Confrontation with Risk
Starting or buying a new business involves risk.  The higher the rewards, the greater the risks
entrepreneurs usually face.  It should be noted that people who successfully innovate and start
businesses come in all shapes and sizes but, they do have a few things others do not.  They are
willing to accept risk for what they believe in.  Entrepreneurs face a number of different types of risk,
the four basic areas are:

1. Financial Risk.  Entrepreneurs must have a solid understanding of financial management and put
that knowledge to use in business every day. The knowledge of entrepreneurial finance is so
often the difference between success and failure, all entrepreneurs should devote themselves to
understanding the key financial indicators for their particular business.  Some at stake are
personal resources that were put into the venture and a likelihood, be lost if the venture fails.
2.  Career Risk A frequently raised question by would-be entrepreneurs is whether they will be able
to find a job or go back to their old job, should their venture fail.   This is a major concern to
managers who have a secure organizational job with a high salary and good benefits package.
3. Family and Social Risk.  To start a new venture requires much of the entrepreneur's energy and
time, which can, in turn, create a family and social risk.  His commitments expose his/her families
to the risk of incomplete family experience and the possibility of permanent emotional scars, even
old friends may vanish eventually as they missed get-togethers.
4. Psychic Risk.  This may be the greatest risk to the well-being of the entrepreneurs.  Some
entrepreneurs who have suffered financial catastrophes have been unable to bounce back, at
least not immediately.  The psychological impact has proven to be too severe for them.

Characteristics of Successful Entrepreneurs

Many people dream of running their own businesses. They would like to become entrepreneurs. 
 Entrepreneurship can be exciting, but many go into it not realizing how difficult it is to run their own
business.  In fact, statistics show that most new businesses will fail within a few years.  These start-
up businesses fail because of the owner's poor planning, lack of business knowledge, lack of
entrepreneurial characteristics, inability to work with others, or failure to choose the right business. 
New characteristics are continually being added to the evergrowing list of the most often cited
entrepreneurial characteristics, it does provide important insights into the entrepreneurial mindset

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1/25/23, 10:51 PM 1.3 Confrontation with Risk, Characteristics of Successful Entrepreneurs: GEE 003-CE42S4 - General Education Elective 3

1. Determination and Perseverance.  A total dedication to success as an entrepreneur can

overcome obstacles and setbacks.  Sheer determination and an unwavering commitment to
succeed often win out against odds that many people would consider insurmountable
2. Drive to Achieve.  Entrepreneurs are self-starters who appear to others to be internally driven
by a strong desire to compete, to excel against self-imposed standards, and to pursue and
attain challenging goals
3. Opportunity Orientation.  It is the constant awareness of opportunities that exist in everyday
life.  Successful entrepreneurs start with the opportunity and let their understanding of it guide
other important decisions.
4. Persistent Problem Solving.  Entrepreneurs are not intimidated by difficult situations.  Although
entrepreneurs are extremely persistent, they are realistic in recognizing what they can and
cannot do and where they can get help to solve difficult but unavoidable tasks. 
5. Seeking Feedback.  Effective entrepreneurs often are described as quick learners, with a
strong desire to know how well they are doing and how they might improve their
performance.   Feedback is also central to their learning from mistakes and setbacks.
6. Internal Locus of Control.   Successful entrepreneurs believe in themselves.  They do not
believe that the success or failure of their venture will be governed by fate, luck, or similar
forces and they believe that their accomplishments and setbacks are within their own control
and influence and that they can affect the outcome of their actions. 
7. Tolerance for ambiguity   Start-up entrepreneurs faces uncertainty compounded by constant
changes that introduce ambiguity and stress into every aspect of the enterprise.  A tolerance
for ambiguity exists when the entrepreneur can deal with the various setbacks and changes
that constantly confront him/her.
8. Calculated Risk Taking.  Successful entrepreneurs are not gamblers, they are calculated risk-
takers when they decide to participate in a venture, they do so in a very calculated, carefully
through-out manner.
9. High Energy Level.  Many entrepreneurs fine-tune their energy levels by carefully monitoring
what they eat and drink, establishing exercise routines, and knowing when to get away for
relaxation.
10. Creativity and Innovativeness.   Entrepreneurs are able to blend imaginative and creative
thinking with a systematic, logical process ability, they think of new ways to market their
businesses and are always looking for new solutions to problems. 
11. Vision.  They have a vision or concept of what their firms can be, this vision develops over
time as the individual begins to realize what the firm is and what it can become.
12. Passion.  Entrepreneurial passion is a fundamental emotional experience for entrepreneurs to
provide a coherent understanding of an emotional experience of intense arousal and energy
mobilization involving an entrepreneur in his or her venture.  This is also characterized by a
discrete emotion that is quite intense being described as an underlying force that fuels our
strongest emotions.  Thus, entrepreneurial passion is recognized as a fundamental
component of the entrepreneurial mindset. 

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1/25/23, 10:51 PM 1.3 Confrontation with Risk, Characteristics of Successful Entrepreneurs: GEE 003-CE42S4 - General Education Elective 3

Reference

Kuratko, Donald 2019 Entrepreneurship  Theory, Process, and Practice 10th ed.  Cengage

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