The psychology of an entrepreneur

Many wish they were more like an entrepreneur. Why is that? Most entrepreneurs are successful, driven, and highly motivated. All of these are characteristics many of us would like to possess. The question becomes is there a specific psychology of an entrepreneur? Can you really define what makes an entrepreneur? To answer that question we must first look at some of the basic definitions of entrepreneur.

There are a lot of definitions for what an entrepreneur is:

• Innovator. One who recognizes opportunities and organizes resources to take advantage of the opportunity.


• One who assumes the financial risk of the initiation, operation, and management of a given business or undertaking.


• Individual who starts a new business. Venture capital is often used to finance the startup costs in return for an equity share. Once the business is established, an entrepreneur may choose to raise additional capital by selling equity shares to the public through an initial public offering.


• A person who takes the risk of organizing and operating a new business venture.


• An innovator of business enterprise who recognizes opportunities to introduce a new product, a new process or an improved organization, and who raises the necessary money, assembles the factors for production and organizes an operation to exploit the opportunity.


• No matter what the definition there is a lot in these definitions in common. Think of these words: innovator, initiate, risk taker. It is in the very definition of entrepreneur that defines the psychology.

What is the psychology of an entrepreneur? An entrepreneur has some very specific psychological characteristics. Being an entrepreneur means taking some risks to be successful.

So, how can you know if you have the psychological make up of an entrepreneur? Know the psychological characteristics that make up an entrepreneur and compare them to yourself.

What are the psychological characteristics of an entrepreneur?

1. The Need for Achievement: entrepreneurs find themselves always wanting to achieve more. Often this is why entrepreneurs are so very successful. Because they always want to achieve more, they continually add to their business and take more risks, and when those risks payoff they are great payoffs.


2. Strong belief that they have control over their surroundings. Things to do not happen to entrepreneurs, entrepreneurs make things happen!


3. The propensity for risk taking: most entrepreneurs are more willing to take risks than other individuals. The question becomes do entrepreneurs have a high risk taking propensity or do they have a different view of the risk involved?

Psychology is somewhat tricky, and so nailing down specific psychological characteristics can be difficult. There is no real evidence that says that this or that psychological characteristic will mean you are going to be an entrepreneur. While you can't create a highly indicative list of psychological characteristics, you can say that most entrepreneurs have similar psychological characteristics, such as the ones listed above. However, it is also true that the psychological characteristics of an entrepreneur are the same as any characteristics that define successful people in general. So, is there really a specific psychology of an entrepreneur? It is hard to say.

It is said that some of the psychology of an entrepreneur stems from self confidence, a sense of urgency, the attraction to a challenge, and it is these feelings that drive them to success. Often it is those feelings combined with the dissatisfaction with a previous work experience that lead them to take the risks and start a new business.

While there is not hard evidence that says this or that is the psychology of an entrepreneur, you can see that in general all entrepreneurs are risk takers, self-motivated, have a need for achievement, are innovative, and like a challenge.