August 17, 2016 / By Zip Schedules / In Hubworks / Comments
The 10 Simple Habits of Successful Young Entrepreneurs
Opinions differ on what kinds of traits make up a successful entrepreneur. Some claim that being a risk-taker is an essential character trait, while others say young entrepreneurs are the most cautious people around. A lot of these beliefs are simply anecdotal, rarely rooted in concrete evidence about what it takes to run a business. However, there are some patterns in entrepreneurial traits that we can rely on thanks to recent research on the topic.
1. Work-Life Balance
It’s typical to assume that the most driven, workaholic, young entrepreneurs come out on top. But a study by software provider, Xero , revealed that 60% of small business owners said spending evenings with their family was critical to the success of their business. This is particularly eye opening, considering the long-held stereotype that entrepreneurs must work relentlessly. Instead, the data shows that relaxation is essential to avoid burnout. Frequent breaks are also a healthy way to hit “reset,” giving young business owners time to step away from problems and return with a fresh perspective.
Seemingly unrelated to running a business, humility may actually play a secret role in the longevity of a new venture. According to the Xero study, about one third of successful business owners reported asking mentors or family members for assistance. Meanwhile, among those whose businesses failed, just 14% reported asking for help. As the old saying goes, “There is strength in numbers.” Smart and young entrepreneurs recognize their own blind spots and turn to others to fill the gaps for their business goals. On the opposite end, some studies have even shown that overconfidence in a founder can be hazardous for business.
3. Tolerance for Ambiguity
Tolerance for ambiguity was first studied in the 1980s, as researchers attempted to determine what types of business leaders experienced the most success. Several studies suggested that in order to be innovative and creative, a high tolerance for uncertainty was needed. Entrepreneurs who viewed ambiguous situations as positive were more likely to be able to work within those situations effectively. Furthermore, this tolerance comes in handy during the many twists and turns a business inevitably takes in its early years. Young entrepreneurs that insist on one set of rigid rules will be unable to thrive under ambiguity.
It’s not hard to see how modern entrepreneurs might exhibit a more rebellious nature than the average person. They stand firmly behind unique, yet unproven ideas, take financial risks, and sometimes drop out of school to pursue their business ideas. Researchers at both the London School of Economics and UC Berkeley’s Haas School of Business found that entrepreneurs had a tendency to get into trouble as teenagers. While breaking the rules is generally regarded as a negative trait, it also points to the ability to create new and better rules.
We’ve all seen job descriptions posted by companies that are looking for young entrepreneurs who are”self-starters,” but what does that really mean? In order for any business to grow, it needs a strong center of leadership. If a business owner has trouble making independent decisions or lacks the drive to work through problems, this is a critical barrier to long-term success. Self-motivation is essentially the ability to move through progress without supervision from others. In this sense, entrepreneurs are self-motivated leaders more than they are outwardly-motivated followers.
6. Positivity in the Face of Failure
The University of Gothenburg conducted a study that linked positive reactions to failure with successful young entrepreneurs. Since starting a business will inevitably involve failure of some sort, this is an incredibly important trait to possess. An entrepreneur who becomes discouraged early on over small setbacks will never be able to weather financial dry spells or major mishaps later on. Seeing failure as opportunity is the key to staying positive.
There is a common conception that entrepreneurs are natural risk-takers, which gives them the courage to do well in the business world. However, a love of risk-taking is not necessarily what fuels entrepreneurs in this area. Instead, research suggests that while yes, they may tend to be risk-takers, the reason is that they have a high aversion to loss. Loss aversion essentially means that a person will go to great lengths to avoid losing their position and source of income. This might outwardly appear to be risk-taking behavior, but more likely, entrepreneurs are aggressively making moves to avoid loss.
8. Communicating Value
Gallup poll researchers attempted to separate especially successful entrepreneurs from the rest of their participants. Their findings showed that the small group that pulled ahead in business tended to do a few things differently. One of those things was their exceptional ability to communicate the value of their product over that of similar products. Thus they were not just good communicators — they were well versed on what made them stand out and why this should matter to customers.
9. Strategic Management
Managing is a tough job, and many new managers fail to recognize the strategic aspects of the role. The Gallup poll found yet another trait that distinguished especially successful entrepreneurs — their ability to manage employees. Entrepreneurs with strong businesses helped employees play to their strengths instead of just delegating tasks. They also worked to match up company goals with employee roles, ensuring that employees were engaged in meaningful and future-oriented work.
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10. The Ability to Learn
Surely, we all have the ability to learn from our mistakes, but how many of us actually choose to acknowledge new information and make a change? It can take a great deal of humility to do this — another trait we talked about above. Entrepreneurs often have to learn from their mistakes and implement changes with what they’ve learned. A perfect example is when a founder needs to pivot a startup early on in its development. While the founder may have been set on his or her original plans, oftentimes the business model doesn’t work. So the founder must head back to the drawing board and re-emerge with plan B.
Variation certainly exists within any group of entrepreneurs. Some are quiet and cautious, while others are more gregarious risk-takers. Some are experimental, while others prefer to be more conservative. But ultimately, all entrepreneurs share some common traits that enable them to get the job done and push forward. The Gallup poll even cites research that suggests entrepreneurship is “between 37% and 48% genetic.” So whether you believe that entrepreneurship is a natural gift, a skill built on practice, or a little of both, many successful business owners seem to embody these ten characteristics.