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November 18, 2012 5:50 pm
The image of the swashbuckling entrepreneur eager to take risks is not true for most business owners, according to a psychological study that shows founders are more likely to express cautious traits than the general population.
The study, conducted by the Psychological Consultancy and Association of Business Psychologists on behalf of AXA Business Insurance, found that 52 per cent of the entrepreneurs it interviewed displayed one of three risk-averse character traits: wary, prudent and deliberate.
Of the 250 business owners in the sample, only 3.6 per cent displayed what the researchers called adventurous characteristics, compared with 12.8 per cent from a sample of 2,000 members of the public.
The findings suggest that most people who run businesses are not doing so to achieve the inherently risky goal of growing fast and disrupting an existing marketplace. Most seem happy, it seems, merely for their enterprise to survive.
The survey covered people in limited companies, sole traders and partnerships. Those in partnerships were most likely to be wary, prudent or composed, while sole traders exhibited more of the carefree, intense and spontaneous character traits.
Many more business owners may be more cautious today because of the uncertain state of the economy, according to John Walker, national chairman of the Federation of Small Businesses.
The federation’s Voice of Small Business index found that business confidence fell in the third quarter of 2012 yet there was a desire to grow.
“With the economy still flat, it is unsurprising that many business owners are playing it safe,” said Mr Walker. “With one in four small firms still unable to access finance, energy costs rising and the impending fuel duty rise, small businesses are being more cautious about their future growth plans.”
Many of the smallest businesses would not be planning growth on a big scale and at high speed, Mr Walker added. “In order for these firms to grow, we need to ensure that there is more competition in the banking sector and more access to alternative sources of finance.”
Darrell Sansom, managing director of AXA Business Insurance, said: “Although demonstrating a contradiction to general perceptions around ‘what makes an entrepreneur?’, we welcome the fact that business owners are more measured and calculated in their approach.
“Any business, regardless of sector or the level of experience running it, would be unsustainable without its leaders having clear goals and ambitions and a practical road map, grounded in reality, to achieving these.”
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