GENDER DIFFERENCES IN ENTREPRENEURSHIP:

A STUDY OF ENTREPRENEURSHIP IN TWO MIDWESTERN COUNTIES

by

Tonia Y. Collins

A Dissertation Presented in Partial Fulfillment

Of the Requirements for the Degree

Doctor of Philosophy

Capella University

February 2007

UMI Number: 3247508

32475082007

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Abstract

The discussion of gender differences and their relationship to entrepreneurial behavior is

valuable to identify the distinctive personality traits of women who choose to become

entrepreneurs, and how social factors have influenced women in their decisions to become

entrepreneurs. A mixed methodology study was conducted to study the differences in education,

Entrepreneurial Quotient (EQ) scores, beliefs about entrepreneurial success, and other

characteristics of 110 men and women who chose to become entrepreneurs in two counties in the

Midwest. The results of the research found that male and female entrepreneurs do possess

differences on the 11 EQ scales by gender, however, no relationships were found between the

11 EQ scales and 6 measures of entrepreneurial success for each gender, and education level did

not impact entrepreneurial success for each gender. Male entrepreneurs scored higher on

measures of adaptability, risk tolerance, time management, extroversion, and thinking, while

female entrepreneurs scored higher on measures of planning, goal orientation, intuition, and

perceiving. In addition, males and females differed in their beliefs regarding entrepreneurial

success. Males, considered financial rewards, recognition, challenges, passion for their

businesses, and building relationships with customers with equal preference. Female responses

included recognition and passion about their businesses, followed by financial rewards. Personal

satisfaction showed the most significant differences. Male and female responses mirrored one

another on the quantitative study in descending order: pride, being my own boss, set my own

hours, uncapped income potential, and taking time off. However, when participants were given

an open choice on the measures of personal satisfaction, none of them chose the choices given in

the quantitative study. Male and female responses were mirrored in descending order,

interaction with people, seeing a change, competing, and control over their lives.

iii

Dedication

This study is dedicated to my family and friends, who have encouraged me to follow my

dream of becoming an entrepreneur.

iv

Acknowledgments

I would like to thank my loving and supportive family for their encouragement and

support of my ongoing academic pursuits. To my husband, Ed, who shouldered additional

financial responsibility to allow me to complete my research. To my children, Brent and

Bridgette, who provided encouragement and inspiration to complete my dissertation during some

of the most difficult challenges in our lives.

Thank you to Dr. Shelley Robbins, who provided guidance, encouragement, and sincere

friendship throughout my dissertation journey. I could not have asked for a better mentor.

I also want to thank my other committee members, Dr. Cortlandt Cammann and Dr.

Sammie Robinson for their insightful comments and prompt readings of my drafts. Your inputs

made this dissertation a better product.

Also, thank you to my editor, Linda, for her helpful suggestions and promptness.

A heartfelt thanks to all of the entrepreneurs who trusted me with information they shared

with me and made the completion of this dissertation possible. I am very grateful to all of you.

v

Table of Contents

Acknowledgments iv

List of Tables viii

CHAPTER 1. INTRODUCTION 1 Introduction to the Problem 1 Background of the Study 2 Statement of the Problem 2 Purpose of the Study 3 Research Objectives 3 Significance of the Study 4 Assumptions and Limitations 5 Organization of the Remainder of the Study 6

CHAPTER 2. LITERATURE REVIEW 7 Introduction 7 Personality Characteristics of Men and Women in the Business World 7 Leadership Behaviors of Men and Women 10 Motivation and Behavior of Male and Female Entrepreneurs 12 Defining and Measuring Entrepreneurial Performance and Success 14 Distinctive Behavioral Characteristics Of Women Entrepreneurs 18 Social Influences and Impact on Women Entrepreneurs 20 Education and Experience 21

CHAPTER 3. METHODOLOGY 27 Overview of Methodology 27

vi

Research Questions 28 Research Hypotheses 28 Research Design 29 Entrepreneurial Quotient Instrument 30 Procedures 34

CHAPTER 4. RESULTS 40

Introduction 40

Quantitative Data Analysis 41

Data Analysis 57

Interview Protocol 59

Interview Findings 60

Qualitative Data Analysis 60

Summary 84

CHAPTER 5. DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS 85

Summary of Study 85

Discussion 86

EQ Scales and Managerial Characteristics 87

Implications of the Findings 99

Limitations of the Study 100

Recommendations for Future Research 101

Conclusions 102

REFERENCES 104

vii

APPENDIX: ONLINE EQ SURVEY 113

viii

List of Tables Table 1. Reliability and Validity of EQ Scales 31

Table 2. Frequency and Percentages for Participant’s Age at First Starting a Business 42

Table 3. Frequency and Percentages for Number of Years for Participants’ Businesses to Become Profitable 42

Table 4. Frequency and Percentages for Participants’ Annual Profit 43

Table 5. Frequency and Percentages for Participants’ Annual Revenue 44

Table 6. Frequency and Percentages for Participants’ Sales Growth over the Last 5 Years 44

Table 7. Frequency and Percentages for Number of Employee Participants Reported in the Past 5 Years 45 Table 8. Frequency and Percentages for Participants’ Ratings on How Customer

Satisfaction is Measured 46 Table 9. Frequency and Percentages for Participants’ Ratings on Reason for Personal

Satisfaction as a Business Owner 47 Table 10. ANCOVA on EQ Subscales by Gender 49

Table 11. Estimated Marginal Means and Standard Errors on the EQ Subscales by Gender 51

Table 12. Canonical Correlation among Entrepreneurial Success and EQ Subscales for Females 52 Table 13. ANOVA on Entrepreneurial Success by Education Level for Females 53

Table 14. Estimated Marginal Means and Standard Errors on Entrepreneurial Success by Education Level for Females 54

Table 15. ANOVA on Entrepreneurial Success by Education Level for Males 55

Table 16. Estimated Marginal Means and Standard Errors on Entrepreneurial Success by Education Level for Males 56

Table 17. Years to Profitability Summary 63

Table 18. Adaptability Summary 66

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Table 19. Risk Tolerance, Qualitative Results 67

Table 20. Customer Satisfaction Measure Summary 72

Table 21. Entrepreneurial Success, Qualitative Results 75

Table 22. Personal Satisfaction Summary 77

Table 23. Advice Summary, Qualitative Results 80

1

CHAPTER 1. INTRODUCTION

Introduction to the Problem

There is a widespread notion that entrepreneurs are by nature risk-takers, individual

rather than collective in outlook, and short-term innovators rather than long-term manager types

(Thomas & Mueller, 2000). A universal assumption is that successful entrepreneurs are driven

by their motivation to accomplish their goals, in spite of any possible setbacks. Intensely

passionate about their work, they are often able and willing to invest 15 or more hours a day in

their work when active (Houtz & Heasley, 2002). Although they are extremely focused on

achieving their dreams, it is noted that the most effective entrepreneurs are also highly

responsive to their employees and customers. Finally, entrepreneurs possess a strong desire to

learn and grow that is reflected in their willingness to ask questions and acquire new knowledge

(Covey, 1989; Drucker, 1985).

Based on the above profile, it is evident that entrepreneurs possess certain characteristics

that enable them to be successful. On one hand, it is widely believed, wrongly or rightly, that

men are more likely to be such risk-accepting innovators than are women, due to what are

perceived to be inherent biological, psychological, and social differences between the sexes. On

the other hand, women are considered to be relationship-oriented individuals who are able to

relate to others—an important trait of a successful entrepreneur (Sonfield, Lussier, Corman, &

McKinney, 2001).

2

Background of the Study

There are significant psychological and functional differences between males and females

in American society. There are those who argue that differences of this kind are a matter of

biology: that is, a basic part of men’s and women’s natures. There have been numerous studies in

recent years attempting to support or reject this “genetic” hypothesis (Benbow, Lubinski, Shea,

& Eftekhari-Sanjani, 2000; Gallagher, et. al., 2000; Geary, Saults, Liu, & Hoard, 2000; Lynn &

Mau, 2001; Lubinski, Benbow, Shea, Eftekhari-Sanjani, & Halvorson, 2001). However, as much

as biology and genetics are studied in this light, research does not support the supposition that

men are born leaders and women born followers.

The motivation in conducting this study was to help develop a measure for entrepreneur

propensity for people considering entrepreneurship as a career in McLean County, based on the

results of this study. The group results are available to small business centers that help with

education and development of entrepreneurship and financial institutions that finance small

business owners to assistance in the continued development and success of small businesses in

our community.

Statement of the Problem

There is a tension between the belief that nature has made us the way we are and the

legitimate desire to see genuine equality—in society, in the workplace, in schools, and in

business. This tension extends to the clinical research. For every study that tries to identify

physical differences in the corpus callosum, for example, as responsible for men being more

three-dimensionally visually oriented and women more verbally efficient (Gur et al., 2000;

Gustafson, 1998; Hamberg, 2000; Kansaku & Kitazawa, 2001; Neave, Menaged, & Weightman,

3

1999; Risberg, 2000), there are others that indicate such abilities and behaviors are as much

learned and imprinted from early childhood as they are part of the genetic code (Cheng & Eagly,

1998; Heilman, 2001; Ridgeway, 2001).

Purpose of the Study

Men and women are both significantly influenced by the experiences they have

personally and professionally, as well as inborn personality preferences, and both of these factors

may affect their behavior and motivation according to gender (Ridgeway & Smith-Lovin, 1999).

The purpose of this study was to examine the effects of these experiences and to assess the

personality characteristics that distinguish male from female entrepreneurs.

The study focused on the nature of the gender differences among individuals who start

entrepreneurial businesses and proceeded by examining the traits and characteristics of

successful new business developers that define what has come to be known as the entrepreneurial

personality.

Research Objectives

The primary objective of this research study was to identify and compare the

entrepreneurial behavior of female entrepreneurs to male entrepreneurs in the United States.

More importantly, the implications of their similarities and their differences provided valuable

lessons for institutions that provide assistance to entrepreneurs and aspiring entrepreneurs,

particularly women entrepreneurs, who are often discouraged from pursuing male-dominated

professions. More specifically, in considering the role of gender differences in entrepreneurial

behavior, this research study addressed the following research questions:

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1. Are there differences in men and women who choose to become entrepreneurs?

2. Are there differences in how men and women measure entrepreneurial success?

3. Are there differences in the education level of men and women entrepreneurs?

Significance of the Study

Gender difference studies conducted in societal settings have proven to be both revealing

and controversial, yielding contradictory results. Throughout recorded history and across most

cultures, females have commonly been expected to defer to males in all aspects of life (Glick &

Fiske, 2000). In general, males have occupied more socially prominent positions than their

female counterparts. Moreover, men are expected to be act more aggressively and violently than

women. In fact, even young boys are often required to prove their masculinity via strenuous

competitive and aggressive behavior. These socially conditioned gender differences have

traditionally reinforced a patriarchy in which men define the social norms, occupy public

positions, formulate laws and rules, and control women (Reeves, 2000). Regardless of the

advances made by women in recent years, the bias against women in the professional world is

evidenced by the fact that they continue to struggle with the underlying sexual stereotypes that

are prevalent in society. One of the dominant reasons for this is the self-perception of many

women as interlopers in a male world or as being forced to play a game they did not create.

Contrary to the women who succeed by adopting the masculine traits, many men see themselves

as naturally dominant types who do not have to “fake” leadership, aggressive behavior, and

physical courage (Ridgeway, 2001).

The significance of these findings was assessed by determining how the plight of women

entrepreneurs could be improved, such as the eradication of barriers to entrepreneurship

5

confronted by women entrepreneurs. Apart from addressing the deliberate exclusion of potential

women from pursuing their dream of owning a business, this study investigated the

entrepreneurial characteristics, measures of entrepreneurial success, and education level of

current entrepreneurs. These findings present a realistic viewpoint from entrepreneurs who have

shared their experiences, both the positive and negative, of business ownership.

Assumptions and Limitations

For the purposes of this study, the author assumed that the entrepreneurial leadership

characteristics defined in the research literature are indeed traits contributing to the decision to

pursue independent business careers, and that these attributes in turn contribute to success as an

entrepreneur. Moreover, the study assumed the validity of the strict dichotomy of male-female

gender and accepted the self-reported gender of the study subjects at face value.

In limiting the discussion of gender differences to entrepreneurial behavior, it is valuable

to not only identify the distinctive personality traits of women who choose to become

entrepreneurs, but also to determine how social factors influenced women in their decisions to

become entrepreneurs. Based on the above discussion, this study investigated whether male and

female entrepreneurs possess highly different personality characteristics. Moreover, the

motivation of both men and women to become entrepreneurs, along with their entrepreneurial

behavior, differed significantly from one another, due to their experiences in the society.

Essentially, even though both male and female entrepreneurs might choose to pursue the same

career course, their process of arriving at this decision and their method of running the business

varied.

6

Organization of the Remainder of the Study

This study stands on previous research and literature in the field, as is captured in Chapter

2, Literature Review. Chapter 3 outlines the methodology used for this study. Chapter 4 reports

the data relative to each research question. Chapter 5 analyzes and interprets the findings of this

study and recommends ideas for additional research.

7

CHAPTER 2. LITERATURE REVIEW

Introduction

A review of the current literature presents conflicting conclusions about the personality

characteristics of men and women concerning their ability to handle leadership roles such as an

entrepreneurial career. The first section of this literature review evaluates studies about the

personality characteristics of entrepreneurs. The remaining sections investigate the leadership

behaviors and abilities of men and women, the motivation and behavior of entrepreneurs of both

genders, the behavioral characteristics that distinguish women entrepreneurs, and the social

influences and impacts on women entrepreneurs.

Personality Characteristics of Men and Women in the Business World

The psychological literature has studied the personality characteristics of entrepreneurs in

great depth. One of the personality traits that has received the most attention in a variety of

studies is the need for achievement that McClelland identified and explored in 1961. McClelland

felt that achievement-oriented individuals were a necessary contributing factor to rapid economic

development, and he went on to further argue that an orientation towards achievement could in

fact be deliberately cultivated through socialization and training: that is, individuals could learn

entrepreneurial behavior. McClelland described entrepreneurs as leaders who were proactive and

committed to others, enjoyed taking personal responsibility for their decisions, preferred

8

moderate risks, enjoyed feedback on their performance, and disliked routine and repetitive tasks.

McClelland is singularly noted, however, for his belief that the crucial characteristic of

successful entrepreneurs is a need for achievement rather than a desire for monetary gain.

Other psychologists have focused on the relationship between an entrepreneur’s internal

locus of control and venture performance. Internal locus of control refers to individuals’ innate

belief that their destiny or performance is determined by their own actions rather than by external

factors. The level of an individual’s internal locus of control is typically measured by the

application of the psychometric scale known as the “Rotter scale” (Rotter, 1982). However,

findings have been inconclusive, suggesting that while entrepreneurs have a high internal locus

of control, so do other types of successful business managers (Schiller & Crewson, 1997; van

Praag & van Ophem, 1995).

Psychologists have also studied the characteristics of risk taking found among

entrepreneurs, theorizing that successful entrepreneurs are less risk averse than non-

entrepreneurs. This argument reflects the more general belief that entrepreneurial entry requires a

more risk-seeking attitude. Van Praag and her colleagues (2002) found that entrepreneurs were

more willing to gamble than employees, and that risk-taking individuals were more likely to

choose to become entrepreneurs. However, some scholars argued that the distinction between

positive approaches to risk taking and optimism is blurry, and that since there is research that

tells us that entrepreneurs interpret their environments more positively than non-entrepreneurs

(Norton & Moore, 2002; Palich & Bagby, 1995), it is difficult to analytically distinguish true risk

attitudes from over optimism with regard to risk outcomes. Xu and Ruef’s (2004) analyses of

nascent entrepreneurs from the Panel Study of Entrepreneurial Dynamics suggested that nascent

9

entrepreneurs are in fact more risk averse in the pursuit of pecuniary rewards than the general

population.

A more recent stream of psychological research has revived the focus on individual traits

as drivers of entrepreneurial performance. In particular, the work of Baum and Locke and their

co-authors focused on the influence of individual skills, motivations, and personality traits on

venture performance (Baum & Locke, 2004; Baum, Locke, & Smith 2001). Their studies of

venture performance in the architectural woodwork industry suggested that while personality

traits like tenacity, passion for work, and proactivity do not have direct effects on venture

performance, they do have indirect effects. Specifically, they found that these traits were

positively correlated with the CEO’s general and specific skills, as well as their level of

motivation. Since skills and motivation have direct effects on venture performance, the overall

model implies that the traits in question influence venture performance, albeit indirectly (Baum

et al., 2001; Baum & Locke, 2004). Baum and Locke did not relate the traits they studied to the

Big Five personality factors studied by Ciavaralla et al. (2004), although tenacity and

perseverance appear to be similar constructs. In this way these studies provided suggestive

evidence that something like conscientiousness improves venture performance. However, it

should be noted that Baum and Locke’s study samples were not limited to entrepreneurial

ventures (although Baum and Locke, 2004, excluded ventures that have been sold to new

proprietors). This suggests that the individual traits they identified as being important in venture

performance may be generic leadership characteristics, as opposed to factors that are uniquely

important to the entrepreneurial context.

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Leadership Behaviors of Men and Women

In some studies, (Lipman-Blumen, 1996; Reskin & Padavic, 1994; Wellington, 1999)

researchers have found that women and men exhibit the same type of behaviors and abilities in

leadership roles. Specifically, these women exhibit the aggressiveness, the analytical nature, and

the orientation toward tasks, instead of toward relationships—characteristics that are generally

associated with women.

Contrary to the stereotypical conceptions of female behavior that are manifested in the

leadership styles, Lipman-Blumen (1996) argued that these female leaders could be even more

task-oriented than their male counterparts—a behavioral characteristic that is typically related to

men. Furthermore, women’s predisposition towards accomplishing tasks by forging relationships

also proved to be unfounded in Lipman-Blumen’s research. As with male leaders, the female

leaders tended to focus on accomplishing tasks without relying on relationships (Lipman-

Blumen, 1996).

The behavior of successful women in leadership positions can be explained by the fact

that they have natural inborn preferences, or have opted to adopt the masculine style of

leadership so that their male peers and employers would accept them. Because male employers

often promote employees who share similar social characteristics and traits with them, they are

more likely to promote men to the upper ranks (Reskin & Padavic, 1994). Alternatively, a style

of leadership that is considered masculine could be an inborn preference.

In a survey of 1200 female vice presidents of Fortune 1000 companies conducted by

Catalyst, the respondents reported that the main barriers against their effort to reach the top were

“exclusion from informal networks” and “male stereotyping” in the workplace (Wellington,

1999, p. 638). Smith and Smits (1994) argued that women who aimed to reach the top of their

11

profession would have to imitate the behavior of their male counterparts or give up their desires

for the top position (p. 44). Murrell and James (2001) noted that in law firms, women who are

junior in the organization perceive being female as incompatible with status and power. Junior

women view senior women in the firm as not senior in any legitimate way and perceive the

senior women as obtaining their positions by acting like men instead of like women.

On the other hand, Lipman-Blumen (1996) reported that other researchers have stated

that women exhibited “feminine” characteristics of leadership such as a willingness to share

decision-making powers and to lead collaboratively. According to Steers and Black (1994),

women in leadership positions regarded themselves as transformational leaders. These types of

leaders seek to influence the attitudes of subordinates and build a sense of commitment in an

effort to achieve the organization’s goals and overall mission.

Their influence over the employees stemmed largely from leaders’ high self-confidence,

their ability to articulate a vision, and a willingness to assume high personal risks and to use

unconventional strategies to realize their goals. They were leaders who aimed to achieve the

common purpose of the organization by forging a supportive and stimulating environment in

order to enable each employee to harness their potential and fulfill their objectives (Steers &

Black, 1994).

In direct contrast, the men in the same research study considered themselves to be

transactional leaders. Transactional leaders have a symbiotic relationship with their subordinates.

Recognizing the fact that each individual gains from the other through their symbiotic

relationship, these leaders offer their resources in anticipation of receiving rewards in return.

They are able to motivate their employees by appealing to the latter’s self-interest and eliciting

their obedience by offering them specific rewards when the designated tasks are completed

12

(Steers & Black, 1994). Similarly, Rosener also supported the fact that male and female leaders

utilized different approaches to motivate their subordinates. While male leaders tended to derive

their authority from their formal positions, female leaders strove to convert the employees’ self-

interest into an overall commitment to the well being of the organization. Rather than order and

control their employees, female leaders invested their energies in forging strong relationships

with their subordinates and promoting a positive environment. In addition, they encouraged

employees to participate in the decision-making process (Rosener, as cited in O’Toole, 1996).

Motivation and Behavior of Male and Female Entrepreneurs

Although the literature review of the personality characteristics of men and women in

leadership positions, which can be extended to the discussion of their entrepreneurial behavior,

has generated contradictory findings, it is vital to emphasize that social factors play a significant

role in influencing individual behavior. For example, researchers studying women leaders in

male-dominated corporations may draw the conclusion that women exhibit masculine traits in

leadership positions without recognizing that these women must act in this fashion or have these

personality traits naturally in order to compete successfully against their male peers. On the other

hand, women leaders in other types of corporations may have the opportunities to display more

feminine qualities without the fear of undermining their position. In such cases, researchers

studying the latter group of women leaders will obtain a conflicting set of findings.

In view of the qualifying factors, it is important to examine the literature that deals with

the behaviors of male and female business owners in terms of their motivation for pursuing

entrepreneurial careers and their entrepreneurial behaviors. According to Helms (1997), female

entrepreneurs, unlike their male counterparts who tend to inherit family businesses, typically

13

establish their own businesses for a variety of personal reasons, thus making them a

heterogeneous group.

The first group of female entrepreneurs is usually frustrated with their inability to shatter

the glass ceiling and circumvent other types of gender discrimination. Problems associated with

maternity leave, low pay, and sexual harassment are common motivators. Starting their own

business provides them with a means to circumvent these barriers, the freedom to pursue their

passion, and the ability to determine their own hours, work environment, and employees. For

them, the personal freedom associated with self-employment is a critical motivating factor. They

usually possess substantial experience acquired in the competitive business world. The

frustration of professionally experienced women, unsatisfied with their progress in corporations,

who have left to become business owners themselves, is evidenced in recent business trends

(Wellington, 1999). According to Zellner et al. (1994), women are establishing new companies

at twice the rate of men. Devine (1994) also estimated that women, who constituted 25% of the

proprietors in 1975, had increased to over 30% in 1990. More recently, the Center for Women’s

Business Research reported that there were 9.1 million woman-owned businesses in the U.S. that

employed over 27.5 million people in 2000. Even more significantly, the largest growth in the

woman-owned businesses can be found in the male-dominated business sectors such as

manufacturing and construction. Clearly, instead of vying for recognition and promotion to

leadership positions by male business owners, these women have decided to carve a niche for

themselves in the business world by creating their own business and business culture (Pentilla,

2001).

Allen (1996) found that the women who are entrepreneurs in industries that are

traditionally dominated by men appear to have more in common with men in similar businesses

14

than with women entrepreneurs in service and retail businesses. The differences between

company owners have more to do with the type of industry than gender. The women Allen

(1996) surveyed who operate non-traditional businesses indicated that owning a business in these

industries gave them the opportunity to set aside the gender issue and compete on equal footing.

Helms (1997) also described a second group of female entrepreneurs who turned to

entrepreneurship due to their experiences with a dramatic event such as a massive lay-off,

downsizing, or the death of a family member. From their perspective, their own business offered

them and their family a greater measure of economic security in the unstable job environment

that no longer guaranteed job security or retirement funds. The final group of female

entrepreneurs turned to entrepreneurship in order to prove that they were able to succeed at a

professional career. They generally included housewives who had little experience.

Weiler and Bernasek (2001) noted that women entrepreneurs may struggle against the

established networks of suppliers, creditors, and customers that remain male-dominated. Women

may have difficulties moving into the upper echelons of their fields, even in the absence of direct

discrimination, as they are excluded from these networks. A comparison of the gender profit

difference and the wage difference between genders, using the earnings of self-employed women

and men as success indicators, shows that the gender profit difference is larger than the gender

earnings difference.

Defining and Measuring Entrepreneurial Performance and Success

The focus was on two issues in the definition and measurement of entrepreneurial

performance. One issue is related to the distinction between “entrepreneurship as organizing”

and “entrepreneurship as innovation.” Successful performance under the two definitions may be

15

quite different. A sole proprietor convenience store can be quite successful without contributing

to Schumpeterian value creation in any way. In this case, success means competently mustering

the forces of production for the required tasks. High technology, venture-capital-backed firms,

by contrast, typically could not consider themselves successful if they were merely well run; they

must also have demonstrated the ability to create products with a large market potential.

Successful innovation can occur without successful organizing, and vice-versa.

This distinction is occasionally lost in studies of entrepreneurial performance. There is

substantial variation in the performance measures used in the studies under review, and the

appropriateness of different measures depends on the definition of entrepreneurship employed.

Performance measures include firm sales, firm revenue, sales growth, revenue growth, employee

growth, tenure of founding members, and the persistence of an organization over time, to name a

few. Successful organizing capabilities are not necessarily demonstrated through high growth

rates; similarly, high growth rates are not solely a function of the firm’s ability to innovate. In

this sense, many of the commonly employed performance measures were too crude, because they

did not allow researchers to distinguish between the drivers of organizational ability and the

drivers of innovative ability.

A second issue to consider with respect to the definitions and measurement of

entrepreneurial performance was the potential disjuncture between externally visible measures of

venture success and the internal measures of success held by the entrepreneurs themselves. Some

entrepreneurs were attracted to the idea of forming companies, for example, and had no desire to

stay beyond the excitement of starting a new venture. Others focused on getting a new venture to

the point where it could be sold to a larger competitor without ever having generated any sales

growth or revenue. Still others were interested in entrepreneurship less for the pecuniary rewards

16

associated with launching new venture and more for non-pecuniary rewards such as autonomy

and entrepreneurial identity (Xu & Ruef, 2004).

Therefore, the important, yet often neglected issue to consider in evaluating studies of

successful entrepreneurs was whether the measure of successful performance was equally

applicable and relevant to all of the participants in the study. Far too often, the studies examined

took the linkage between success and performance for granted, rather than submitting them to

critical rigorous interrogation. This was most apparent in a consideration of the distinction

between a performance measure such as venture survival and financial measures such as

profitability or sales. Numerous studies found that the determinants of firm survival were

different from the determinants of firm profitability (Bosma, van Praag, Thurik, & de Wit 2004;

Gimeno, Folta, Cooper, & Woo, 1997) and that, on average, entrepreneurs could have earned

higher income in paid employment than they earned from entrepreneurial activity (Hamilton

2000). This suggested that the non-pecuniary rewards associated with entrepreneurial activity led

some entrepreneurs to persist in entrepreneurship despite inferior economic returns.

These distinctions have implications for policy makers, particularly with respect to which

kinds of studies should be given the most weight in shaping policy distinctions. If policy makers

wish to encourage entrepreneurship as a means of encouraging economic growth, the focus (in

assessing past research and designing new research) should be on studies that examine the

determinants of such performance metrics as sales growth, profitability, and employment growth.

If, by contrast, policy makers wish to encourage entrepreneurial activity as a means of fostering a

broad distribution of enterprise ownership, then the focus should be on the factors that lead

people to be more likely to persist in entrepreneurship.

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The women who began their own business to seek a challenge measured success first in

terms of level of self-fulfillment and second in terms of profit. Women entrepreneurs seemed to

measure success internally by skill improvement, professional development, and personal growth

rather than externally by business growth or profits. Because it only took profit into account, the

traditional measure of success was only half the picture of the success of women entrepreneurs.

Women viewed the decision to start a business as a life strategy rather than as a career (Buttner

& Moore, 1997).

Unlike the women who sought to achieve their personal objectives as listed above,

Shaver (1995) reported that men typically cited external reasons for pursuing entrepreneurship,

such as responding to a good market opportunity. Another significant distinction between men

and women entrepreneurs was their age difference: female entrepreneurs generally started their

businesses 10 years after their male counterparts. Shaver (1995) cited the reasons of motherhood

and the traditional socialization experience as discouraging women from pursuing independent

entrepreneurship opportunities. Throughout their lives, young women are often discouraged from

pursuing careers in male-dominated occupations. Scherer, Adams, and Wiebe (1990) also

highlighted three social learning indicators that accounted for the difference in the timing for

pursuing entrepreneurship opportunities for men and women: their level of education and

business experience, career expectations, and career self-efficacy. As Birley (1989) explained,

men and women differ in their perception of their ability to manage their own businesses.

In terms of their entrepreneurial behavior, Helms (1997) emphasized that women

entrepreneurs, who were less experienced in business management than their male counterparts,

invested tremendous time and effort in researching their field and conversing with others. While

some already had experience in the industry of their choice, others were highly motivated in

18

obtaining information about their industry from more experienced professionals. Moreover,

women entrepreneurs also exhibited more prudent tendencies than male entrepreneurs. Thus,

they were careful about limiting their business expenses by doing most of the work themselves.

Adept at juggling multiple roles of being wife, mother, and caregiver, these women

entrepreneurs simply integrated their businesses into their day-to-day life. Unlike male

entrepreneurs who perceived their business relationships as discrete entities that were separate

from their private life, women entrepreneurs situated their business relationships into the heart of

their life.

Distinctive Behavioral Characteristics of Women Entrepreneurs

Most significantly, the literature highlighted the distinctive characteristics of women

entrepreneurs that distinguish them from male entrepreneurs. According to research studies

(Center for Women’s Business Research, 1994, 2002) women entrepreneurs pride themselves on

their strong social and interpersonal skills. Instead of operating under a rigid and authoritarian

management model, these women entrepreneurs utilize a cooperative and collaborative

management approach. Founded on shared participation and human relationships, women

entrepreneurs utilize a strategy that involves listening and learning, rather than the pursuit of

short-term profits. For female business owners, their own businesses provide them with the ideal

environment for asserting feminine characteristics of leadership. In this setting, women who have

left the corporate arena no longer have to reshape their values and behavior in order to blend into

the male-dominated environment of the corporate world (Buttner & Moore, 1997). Because they

are in control of their resources and their work environment, the female business owners are able

to define an environment that is free from the gender inequality that permeates the corporate

19

world (Carter & Cannon, 1991). Contrary to the presuppositions of men about women’s abilities

to form productive relationships at work, the personal friendships between women at work do

not necessarily detract from the tasks that need to be performed. Rather, these friendships

provide women with the support, encouragement, and collaboration they need to complete their

work projects successfully. In fact, by sharing a friendship, women are often better able to

collaborate with one another in a positive and healthy environment (Andrew & Montague, 1998).

The display of feminine characteristics of female leadership in women-owned businesses

was supported by the research study conducted by Stanford, Oates, and Flores (1994). According

to these researchers, who interviewed female business owners, many of the characteristics

identified in the description of the feminine characteristics of leadership were described. For

most of the study’s participants, the relationships between them and their employees were based

on a shared sense of commitment and respect. The participants noted that their employees were

given the freedom to participate in the decision-making process as partners. In an environment

that promotes growth and learning, the independence of the employees was cultivated so that

they were intrinsically motivated to share the same vision as the employers.

In comparing male and female employers, Smith and Smits (1994) discovered that

women employers were regarded as better owners by both male and female employees. By using

strong interpersonal skills, the female employers created a more enjoyable working environment

for the workers than did their male counterparts.

Pentilla (2001) highlighted the distinctive quality of the working environment run by

individual female business owners, which can be distinguished from the conventional

environment of a company run by men. For instance, Amy Zimmerman, the CEO of a small

placement firm that employs 12 women and two men, emphasized the importance of

20

communication within her company. Spending at least 20 minutes per week in a one-on-one

discussion with each of her employees, Zimmerman wanted to ensure that her employees were

able to participate actively in the policies and practices of the company. By encouraging the flow

of communication between her and the employees, as well as among them, Zimmerman was able

to tackle problems immediately. The success of her leadership approach was also reflected in her

$2.1 million sales in 1999 and her company’s selection as one of the top 100 women-owned

businesses in Los Angeles County (Pentilla, 2001).

Social Influences and Impact on Women Entrepreneurs

Nonetheless, researchers (Cheng & Eagly, 1998; Ridgeway, 2001) have questioned the

impact of business ownership (by gender) on the relationship between gender and

entrepreneurship. According to Rosa and Hamilton (1994), female business owners’ ability to

exercise feminine characteristics of leadership may be undermined by practical realities such as

co-ownership with a male. Therefore, it is possible that in such instances, the female business

owner’s power and authority may be attenuated by the imposition of authority of the male co-

owner. In addition, even when the woman is the sole business owner, her ability to exercise

feminine leadership may be affected by her experiences with the outside world that is still

characterized by gender inequalities (Hamilton, Rosa, & Carter, 1992).

The impact of family and career on women’s progress in organizations is a relatively new

area of research. For many women, the dual responsibilities of family and work present

significant concerns, particularly as women still shoulder a disproportionate part of the work

involved in maintaining a home life and raising children (Buttner & Moore, 1997). While some

researchers (Fierman 1990; Zellner et al., 1994) suggested that women started their own

21

businesses with the goal of balancing their lives, others (Morris, 1995) reported that the career

choices women make are not influenced by their concerns for family any more than are men’s.

In summary, there is disagreement among researchers about whether the personality

characteristics associated with leadership differ between genders and whether leadership can be

attained only by replicating masculine characteristics. There appears to be agreement about the

differing reasons that men and women go into business for themselves, how they define success,

and that women entrepreneurs have distinctive characteristics relating to social and interpersonal

skills. However, the existence of continuing disagreement about the specific gender derivation

and orientation of the leadership traits typically involved in entrepreneurial behavior represents a

gap in the research in this field, justification that this study has contributed to our knowledge

about the role of gender-based traits in what have traditionally been male-dominated activities.

Education and Experience

Economists champion a human capital model that examines such acquired variables as

experience and education (Becker, 1975) and their effects on various career outcomes. Although

originally applied to explain earnings, it has also been successfully applied to explain the success

of small business owners (Cooper, Gimeno-Gascon, & Woo 1994; Dyke, Fischer, & Reuber,

1992; Lussier, 1995; Van de Ven, Hudson, & Schroeder, 1984) and small businesses (Cooper &

Gimeno-Gascon, 1992; Rauch & Freese, 2000). Refinements to the basic model have

proliferated, using measures of specific human capital or knowledge (specific to a firm, industry,

or technology), as well as a variety of interaction effects.

The education level of new venture founders is positively related to venture performance.

Van der Sluis, van Praag, and Vijverberg (2004) performed a comprehensive meta-analysis of 94

22

studies that included estimates of the relationship between schooling and entrepreneurial entry

and performance. They concluded that schooling, irrespective of how it is measured,

significantly and positively affects entrepreneurial performance. For example, Gimeno et al.,

(1997) found that relatively highly educated entrepreneurs take more money out of their ventures

(presumably because there is more to take out) and are less likely to exit entrepreneurship.

Hamilton (2000) found that earnings are lower among the self-employed who are high school

dropouts and higher among college graduates.

As Van der Sluis et al. (2004) pointed out, the interpretation of the estimated effects of

schooling on entrepreneurial performance was ambiguous. In particular, it was not clear from

existing studies whether this effect represented the impact of investments in schooling per se on

entrepreneurial performance, or whether it reflected the effects of ability. Differences in

schooling levels are shaped by individual choices to continue schooling, which depends in part

on ability. The fact that those with higher education appear to do better in entrepreneurship may

therefore reflect the fact that they are, on average, more able. It is not clear that schooling per se

improves entrepreneurial performance. Furthermore, it should be noted that many of the studies

that examined the impact of schooling looked at its effects on individual income, which is an

imperfect measure of the performance of new ventures (since entrepreneurs can choose their

income levels).

In considering the effects of experience, it is helpful to distinguish between four distinct

types of experience: labor force experience, occupational experience, industry experience, and

entrepreneurial experience. The effects of labor force experience on venture performance are

generally weak. In human capital models of earnings from paid employment, the positive effect

of general labor force experience is seen as a reflection of returns to skills acquired during

23

employment. Hamilton (2000) found little evidence that labor force experience impacted self-

employment earnings in the United States. Bosma et al. (2004) found that employment

experience had no significant impact on venture survival or profit, but had a positive effect on

venture employment levels. The effects of labor force experience are in some specifications

captured by measures of the age of the entrepreneur; however, age does not have consistent

effects in models of entrepreneurial performance. In summary, there is little evidence to suggest

that general labor force experience has a meaningful impact on new venture performance.

A number of studies suggested that entrepreneurs’ experience working in the same

industry as their new venture has a beneficial impact on performance. Bosma et al. (2004) found

that the industry experience of the founder increases firm survival, firm profits, and firm

employment. Gimeno et al. (1997) also found that experience in related businesses had a positive

effect on performance and had no effect on the likelihood of exiting entrepreneurship conditional

on performance. This latter result suggests that the impact of industry experience on survival is

not due to any effect on entrepreneurial persistence.

The industry experience effects reflect the common-sense notion that entrepreneurs do

better if they have existing knowledge of buyers and suppliers in their industry, understand

operational issues, etc. However, it is not clear that these findings are generally robust. Other

studies found no evidence that industry experience influenced performance (e.g., Kor, 2003;

Sandberg & Hofer, 1987). One reason for this inconsistency may lie in the different types of

entrepreneurial ventures examined in different studies. In particular, for ventures that are seeking

to be innovative, it can be a liability to be too similar to the existing firms in the industry.

Sapienza, Parhankangas, and Autio (2004) presented evidence that suggested that the degree of

relatedness between the parent firm (that it, the firm in which the entrepreneur previously

24

worked) and a new venture has a curvilinear effect on venture performance. Specifically,

performance increases as the relatedness of the parent and the spin-off increase, up to an

inflection point after which the performance of the new venture declines as it draws too heavily

on the same knowledge as the parent. Sapienza et al. (2004) showed that this is true for the

relatedness of production knowledge and technological knowledge, but not for the relatedness of

marketing knowledge.

A second interpretation of the industry experience effects is that they reflect differences

in the abilities of individuals to evaluate entrepreneurial opportunities. It is possible, for example,

that people with experience working in an industry have a better sense of which entrepreneurial

opportunities are most attractive; they may also be exposed to more valuable opportunities, for

example, through innovations that their firms develop but choose not to pursue. The superior

performance of entrepreneurs with industry experience may therefore be due to their superior

ability to decide when to launch a new venture, as opposed to any superior ability to operate the

new venture.

The most relevant form of occupational experience for entrepreneurial performance is

managerial experience. Scholars expect that managerial experience should improve

entrepreneurial performance because entrepreneurship contains, as discussed earlier, a core

organizing function. However, the evidence for an effect of managerial experience is somewhat

mixed. Bosma et al, (2004) did not find any effect of managerial experience on venture profits

and employment, but did find that it improved venture survival rates. Gimeno et al. (1997) found

that prior management experience had a positive but statistically unreliable effect on the amount

of money taken out of a new venture (suggesting that the venture had better performance). They

also found that prior management experience made it more likely that the founder would shut the

25

venture at a given level of economic performance; they argued that this reflected the better

employment opportunities available to those with managerial experience. Beckman and Burton

(2005), using a sample of high-technology start-ups in Silicon Valley, found that top

management teams with prior management experience had greater success securing venture

capital funding and going public. This effect may in part have been driven by the signaling value

of managerial experience to actors in the capital markets.

Finally, several studies considered the effects of prior entrepreneurial experience. Again,

the results were somewhat mixed, but generally suggested that ventures that are run by people

with prior entrepreneurial experience have superior profits (Gimeno et al. 1997; Bosma et al.,

2004). There was also consistent evidence that previous experience in self-employment increased

the likelihood of survival in new business ventures (Holmes & Schmitz, 1996; Taylor, 1999).

Beckman and Burton (2005) found that prior founding experience on the top management team

increased the likelihood of receiving venture capital but had no impact on the likelihood of going

public.

The interpretation of both the managerial experience and entrepreneurial experience

effects was, as with the effects of industry experience, colored by the fact that the existing results

were estimated from samples of new ventures. For example, individuals occupying managerial

positions may be more selective in when and where they enter entrepreneurship; their superior

performance may be due to this and not better entrepreneurial management skills. Along the

same line, individuals with managerial experience may have better options outside of

entrepreneurship, which implies that only those with high entrepreneurial performance will be

observed in entrepreneurship when the data for studies are collected. Similarly, individuals with

prior entrepreneurial experience fall into two categories: those who have succeeded and those

26

who have failed. In both cases, perhaps they would be more selective in which opportunities they

pursue (albeit for different reasons).

27

CHAPTER 3. METHODOLOGY

Overview of Chapter

Within Chapter 3, the mixed methodology research utilized in the study is described. The

design of the study and the research procedures were selected based on the purpose and overall

goals of the study, as well as by the research questions guiding the study. Initially, information is

provided on the research design of the study. A discussion of the research methods employed is

then presented and the plans for data analysis research.

The purpose of this chapter was to describe both the quantitative and qualitative analyses

that were completed. The quantitative data were collected using the Entrepreneurial Quotient

(EQ), and a demographic survey. At the cessation of the quantitative data collection, of the 110

respondents from the quantitative study, a subsample of 10 participants, five males and five

females, were contacted by telephone to schedule a structured, face-to-face interview. Each

participant was asked 12 questions. The interview was recorded, transcribed, coded, and the

researcher completed the qualitative analysis.

The mixed mode study was to explore the effects of personal and professional

experiences, as well as of inborn personality preferences, on female and male entrepreneurs in

order to further investigate the nature of gender differences among individuals who start

entrepreneurial businesses.

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Research Questions

Three primary research questions were addressed in this paper.

1. Are there differences in men and women who choose to become entrepreneurs?

2. Are there differences in how men and women measure entrepreneurial success?

3. Are there differences in the education level of men and women entrepreneurs?

Research Hypotheses

The hypotheses for this study addressed three different research questions. Recall that the

first research question is: Are there differences in men and women who choose to become

entrepreneurs?

H1 There are differences on the 11 EQ scales by gender (males versus females).

H01 There are no differences on the 11 EQ scales by gender (males versus females).

H2 There is a relationship between the 11 EQ scales and 6 measures of entrepreneurial

success for each gender (males and females).

H02 There is not a relationship between the 11 EQ scales and 6 measures of entrepreneurial

success for each gender (males and females).

H3 Education level impacts entrepreneurial success for each gender (males and females).

H03 Level of education does not impact entrepreneurial success for each gender (males and

females).

29

Research Design

The study used a survey research strategy. According to Zechmeister, Zechmeister, &

Shaughnessy (1997), survey research represents a general approach to be used when the

correlational research design is implemented. Survey research is the method of gathering data

from respondents thought to be representative of some population, using an instrument

composed of closed structure or open-ended items (questions). It is one of the most dominant

forms of data collection in the social sciences, providing for efficient collection of data over

broad populations, amenable to self-administration, administration in person, by telephone, via

mail and over the Internet.

Many advantages have been identified in the use of the survey method. According to

Babbie (2001), these advantages include:

1. One can collect a large amount of data in a period of time.

2. Surveys are easier and less expensive than other forms of data collection.

3. Questionnaires can be used to research almost any aspect of human perceptions regarding the variables under study.

4. Survey research can be easily used in field settings.

Participants

Entrepreneurs participating in this study numbered 110. The sample for the study was

recruited through the McLean County Chamber of Commerce in Bloomington, IL.

Entrepreneurs, for the purposes of this study, were defined as male and female business owners

who had started a business from the ground up and had been in business for a minimum of 5

years.

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Variables

The study used 17 dependent variables (11 EQ scales and 6 entrepreneurial scales) and 2

independent variables (gender and education level). These variables are discussed below.

Demographic Survey

The demographic survey had 17 items. Six measures of entrepreneur success were used

as six dependent variables. Gender and education level were used as independent variables.

Entrepreneurial Quotient Instrument

For the purposes of the study, the Entrepreneurial Quotient (EQ) developed by Edward J.

Sashkin (1984) was used to gather study data. The EQ is a self-report instrument that combines

assessments of adaptability, managerial, and personality traits to identify and predict

entrepreneurial potential. It consists of 100 statements that form 11 scales: adaptability, risk

tolerance, time management, creativity, strategic thinking, planning, goal-orientation,

extroversion, intuition, thinking, and perceiving. Category descriptions are presented, and scores

appear in Table 1.

Reliability and Validity of the Scales

1. Adaptability. The adaptability dimension measures the ease with which an individual can step beyond his/her comfort zone into either changed circumstances or new life experiences. This category is referred to as resourcefulness. The adaptability dimension also indicates one’s networking skills, which includes reaching outside of one’s immediate circle of friends and contacts to form new alliances and acquire needed resources to accomplish business objectives.

2. Managerial characteristics. The EQ managerial typing model is based on

managerial typing instrument, which is an analog to the Myers-Briggs Type Indicator psychological typing instrument (Fasiska, 1992). The managerial characteristics section provides a summary scale measurement, which is an

31

overall standing, based on six traits: Risk Tolerance, Time Management, Creativity, Strategy, Planning, and Goal Orientation.

3. Personality type. The personality type section of the EQ instrument is based on

the work of Carl G. Jung (1923), and that of Katharine C. Briggs and Isabel Briggs-Myers and their psychological instrument, the Myers-Briggs Type Indicator (MBTI) (Briggs & Briggs-Myers, 1976, 1977). The MBTI focuses on the constructive uses of individual personality differences and is used in career planning, counseling, teaching, and training. The personality section of the EQ instrument was specifically developed to measure these personality characteristics in a business environment. The EQ instrument measures the Personality Type of the subject on a summary scale based on four pairs of personality preferences: extroversion versus introversion, intuition versus sensing, thinking versus feeling, and perceiving versus judging. For a comprehensive discussion of personality, preferences see the MBTI Manual.

4. EQ Index. The EQ Index is the total of the scores for the three summary scales (a)

adaptability, (b) personality type, and (c) managerial characteristics. The maximum score attainable is 100 points.

Table 1. Reliability and Validity of EQ Scales __________________________________________________

Trait Ideal Score Candidate Score

Adaptability 100-66 87

Managerial Traits 100-71 81

Risk Tolerance 85 83

Time Management 68 69

Creativity 86 90

Strategic Thinking 85 87

Planning 55 78

Goal Orientation 47 72

Personality Traits 100-70 16

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Table 1 (continued). Reliability and Validity of EQ Scales

Traits Ideal Score Candidate Score

Extroversion 71 100

Intuition 67 100

Thinking 57 100

Perceiving 17 0

EQ Index 100-70 74

Scoring the EQ

The total of the scores for the three summary scales (Adaptability, Personality Type, and

Managerial Characteristics) results in an EQ Index. Raw scores are computed for each of the

three categories. The total possible score for the Adaptability section is 12 points, for the

Personality Type section is 52 points, and for the Managerial Characteristics section is 36 points,

for a maximum score of 100 points. The average score is 68.4; the higher the score, the higher

the entrepreneurial potential (Fasiska, 2002).

Instrument Validation and Reliability

The EQ instrument was developed using data from 2,085 individuals who participated in

a national study on entrepreneurship and were interested in their entrepreneurial propensity. The

individuals consisted of entrepreneurs (n = 690), executives (n = 320), and the general public (n

= 1,075) (Fasiska & Fasiska, 1987). The initial validation was conducted using 1,280 data

profiles (180 executives, 420 entrepreneurs [self-reported], and 680 general public individuals

working in a variety of professions) (Fasiska, 1992). It should be noted that the

entrepreneurs/self-employed category of participants were categorized as entrepreneurs if they

33

were self-employed. These individuals were not necessarily successful entrepreneurs. The results

demonstrated group means differences for entrepreneurs 73.4 (SD = 8.6), executives 68.5 (SD =

9.5), and general public 68.4 (SD = 10.1) (Wonderlic, 1995). The total score possible is 100

points.

The EQ instrument was further validated with a second more selective group of 52

individuals, which included 31 successful entrepreneurs and 21 successful executives (Fasiska,

1992). The participants were considered to be successful if their peers described them as

successful. Results of this study supported the original validation. The successful entrepreneurs

had a mean EQ score of 80.3, in comparison to the general public category, which had a mean

EQ score of 68.4. The mean scores for each of the subscales and the mean EQ index of these

successful entrepreneurs provided a profile of scores to compare to the EQ scores of individuals

taking the EQ instrument.

The EQ instrument was further refined by validation studies conducted by Wonderlic

Personnel Test, Inc. (1995). The results of a factor analysis supported 11 entrepreneurial

dimensions of the instrument. Subscales of risk-taking propensity, time management, and

creativity were added to the original eight subscales. A study sample was derived from mailing a

follow-up survey to persons who had taken the EQ instrument. Over 23% (n = 1,523) responded

to the survey. The objective of the study was to compare start-up entrepreneurs to three other

business groups defined in the EQ research (Wonderlic, 1995). Results indicated that the

Entrepreneur Start-up group scored significantly higher in the mean EQ Index than the other

three business groups. The average EQ Index means were as follows: Entrepreneur Start-up,

57.8; Executive Growth, 39.72; Entrepreneur Operation, 44.37; and Executive Operations, 32.04.

34

Reliability measures using Cronbach’s alpha were calculated for each of the 11

dimensions in the EQ instrument (Wonderlic, 1995). The Cronbach’s alphas ranged from .61 to

.83. Cronbach’s alpha reliability coefficient normally ranges between 0 and 1. The closer

Cronbach’s alpha coefficient is to 1.0, the greater the internal consistency of the items in the

scale. George and Mallery (2003) provide the following rules of thumb: “ > .9–Excellent, > .8–

Good, > .7–Acceptable, > .6–Questionable, > .5–Poor, and < .5–Unacceptable” (p. 231). While

increasing the value of alpha is partially dependent upon the number of items in the scale, it

should be noted that this has diminishing returns. It should also be noted that an alpha of .8 is

probably a reasonable goal.

Procedures

This section of Chapter 3 discusses research procedures that were applied in the study.

Chamber members from both McLean and Champaign counties were selected as a purposive

sample and each person received information from the researcher regarding how to participate in

the research study.

1. The executive directors from Mclean County Chamber of Commerce and Champaign County Chamber of Commerce were contacted by telephone by the researcher to discuss the study. Originally, the study was to include only McLean County Chamber of Commerce members. The original request to members in McLean County resulted in only two potential participants. As a result, the researcher contacted entrepreneurs who were not Chamber members and also extended the search to Champaign County. Therefore, the study includes entrepreneurs in two counties, of which 24 are members of the Chamber and 86 are not members.

2. A permission letter to the researcher was sent from the executive director of the

McLean County Chamber of Commerce indicating that he would encourage and support the study by contacting Chamber members by email and inviting them to participate in the study. The executive director of the Champaign County Chamber of Commerce indicated that the researcher could directly contact

35

members of the Chamber from a membership directory that was provided to the researcher. No further permission was needed.

3. A follow-up email was sent from the researcher to the director of the McLean

County Chamber of Commerce and described the study in more detail. This email was utilized by the executive director of the McLean County Chamber of Commerce to send emails to the membership of the Chamber. The email included information on how to contact the researcher if he/she wished to participate in the study.

4. In McLean and Champaign Counties, the researcher directly contacted each

entrepreneur either by visiting the place of business and asking if the owner was there, or by calling the owner and making an appointment. The researcher then described the study to the owner and provided copies of the informed consent form and the directions on how to complete both the demographic survey and the EQ survey (see Appendix). One participant chose to complete the survey online and 109 completed paper versions of the surveys, which were then input directly by the researcher.

5. Wonderlic sent the individual results by email to the researcher, who completed

the statistical analysis. 6. Of the 110 participants, a subsample of 5 males and 5 females volunteered to

participate in a face-to-face interview with the researcher. 7. Each participant was asked 12 questions. The interview was recorded, transcribed,

coded, and the researcher completed the qualitative analysis.

The research began July 15, 2006, and research information was gathered from McLean

County only until the end of August. Due to the lack of eligible participants in McLean County,

particularly female entrepreneurs, the researcher extended the research into Champaign County,

to find 12 more female entrepreneurs and 5 more male entrepreneurs. Research was concluded at

the end of September 2006.

For the purposes of the study, purposive sampling, a form of non-probability sampling,

was used. As explained by Trochim (2001), in purposive sampling, the researcher samples with a

purpose in mind from one or more specific and predefined groups, which are believed to be

36

representative of the larger population of interest. Trochim noted that one of the benefits of

purposive sampling is that it can be very useful for situations in which the researcher wants to

reach a reach a targeted group that otherwise might not be readily available.

Data Collection

As described earlier, the survey method was used as the means to collect data. Prior to

initiating the data collection phase of the study, permission to conduct the survey was obtained

from appropriate university officials (i.e., Institutional Review Board) regarding the involvement

of human subjects. Data collection commenced on Committee’s approval.

External Validity

Sampling bias is always a threat to the external validity associated with the findings of a

study. Purposive sampling and the use of a truly representative sample in research is often a

difficult challenge. As nonprobability sampling was used within the study in order to reduce the

potential for sampling bias, as suggested by Babbie (2001), an effort was made to clearly

describe the sample selection process in detail and the characteristics of the study participants.

The utilization of a representative design was also suggested as a means of increasing the

generalizability of research findings (Snow, 1974). A representative design is one that has been

planned so as to reflect environments characteristic of those associated with the population as

well as the characteristics of the study participants. In order to plan for a representative design,

Snow recommended the following:

1. Conduct research in an actual field setting/locality familiar to study participants;

2. Attempt to include within the design participants who vary on certain characteristics (for example, age, gender, number of years married);

3. Include observations of the participants during the study; and

37

4. Observe the social context in which the study is conducted as certain events may influence the findings of the study. Recording the occurrence of such events can aid in increasing the degree to which the findings have greater interpretability.

In order to further increase the potential for generalizability of the study findings,

following the Snow’s (1974) guidelines, the online survey was completed in the participant’s

home or office. Additionally, questions were included regarding age, gender, and socio-

economic status, which provided a means of accounting for some variation among study

participants. While participant observation was not utilized within the study, a description of the

settings in which participants worked was provided in the demographics section of the EQ in

order to further document potential differences that might exist among participants.

Data Analysis

Data was entered into SPSS 13.0 for Windows. Descriptive statistics were conducted on

demographic data where appropriate. The demographic variables were assessed as covariates.

Point biserial correlations and ANCOVAs as appropriate were used to determine if the

demographic variables were related to the 11 EQ scales and the 6 measures of entrepreneurial

success.

To examine hypothesis 1, “There are differences on the 11 EQ scales by gender (males

versus females)”—A MANCOVA and 11 ANCOVAs were conducted, using the 11 EQ scales as

the dependent variables and gender as the independent variable. Significant demographic

variables were entered as covariates. The assumptions of MANCOVA were assessed. Effect size

and power were reported.

To examine hypothesis 2, “There are relationships between the 11 EQ scales and the 6

measures of entrepreneurial success, for males and for females,” canonical correlations were

38

used to assess the patterns of relationship between the 11 EQ scales and the 6 measures of

entrepreneurial success for the overall sample, males, and females. Interactions were assessed

using the F statistic to determine the extent of variation among the dependent variables.

Assumptions of canonical correlation – linearity, normality, and homoscedasticity—were

assessed.

To examine hypothesis 3, ”There are differences on the 6 measures of entrepreneurial

success by education level, for males and for females,” a separate MANCOVA and 6 ANCOVAs

were conducted, with the 6 entrepreneurial success scales as the dependent variables and

education level as the independent variable. Significant demographic variables were entered as

covariates. Interactions between gender and education were assessed using the F statistic to

determine the variation among the dependent variables. The assumptions of MANCOVA—

normality and homogeneity of variance/covariance matrices—were assessed. Effect size and

power were reported.

Limitations of Data

Data were based on subjects’ self-reports. Participants might have responded in the

survey with data they thought the researcher wanted to hear, so the researcher was careful to

refrain from unwittingly suggesting answers. Because participants were free to decline to

respond to specific questions, there may have been differences in the data that biased analysis.

Subjects might have reported positive, but not negative, behaviors, thus skewing the results. The

subjects may or may not have comprised a representative sample of the population. Drawing

conclusions that were accurate and that did not extrapolate beyond the context described by the

data can be difficult.

39

Institutional Review Board (IRB) Approval

Approval for the project was obtained from the IRB associated with the researcher’s

educational institution. The researcher also provided the IRB with samples of the recruitment

materials used to explain the study to the participants. Copies of the survey and information

sheet/consent form were provided to the IRB. The consent documents discussed confidentiality.

Participation in the study might have involved a loss of privacy, but the data supplied by the

participant were handled as confidentially as possible. The researcher assigned codes to the data

rather than using names. Information was not used in any way that could identify individuals. All

results were presented as aggregates. Demographic information that had the potential to act as an

identifier was separated from the survey data as soon as possible. The researcher and the

researcher’s advisor were the only individuals with access to the data, which were stored in a

password-protected data file. The data were destroyed after completion of the study. The subjects

were made aware that participation in the research was voluntary and that they could decline to

participate without any negative influence on their status as participants, and that they could

withdraw from participation at any point without prejudice.

40

CHAPTER 4: RESULTS

Introduction

This chapter presents the results of the quantitative and qualitative analysis of the data

collected using the Entrepreneurial Quotient (EQ), a demographic survey, and ten face-to-face

interviews. The quantitative results are discussed first, followed by the qualitative results.

Descriptive statistics tests were conducted on demographic data. The demographic

variables include:

1. respondent’s age when business was started, 2. education, 3. marital status, 4. main reason business was started, 5. number of employees, 6. number of years in business, 7. previous experience in industry before business was started, 8. did family background include a parent(s) who owned his/her/their own business,

if so, did respondent work in family’s business, 9. how long did it take for business to become profitable after it was started, 10. average annual gross revenue generated in the last 5 years, 11. average annual profits generated in the last 5 years, 12. how much have sales grown over the last 5 years, 13. how is customer satisfaction measured, 14. how many employees have been added to the business in the last 5 years, 15. main reason for personal satisfaction as a business owner. Next, each of the three hypotheses was examined and MANCOVA, ANCOVA, and

Canonical correlations were performed. The three hypotheses are as follow:

1. There are differences on the 11 EQ scales by gender (males vs. females).

41

2. There is a relationship between the 11 EQ scales and 6 measures of entrepreneurial success for each gender (males and females).

3. Education level impacts entrepreneurial success for each gender (males and

females).

The 17 dependent variables in this study are the 11 EQ scales: adaptability, risk tolerance,

time management, creativity, strategic thinking, planning, goal-orientation, extroversion,

intuition, thinking and perceiving, and 6 measures of entrepreneurial success that include (a)

average annual gross revenue generated in the last 5 years, (b) average annual profits generated

in the last 5 years, (c) how much have sales grown over the last 5 years, (d) how is customer

satisfaction measured in respondent’s business, (e) how many employees have been added to the

business in the last 5 years; (f) what is the main reason for personal satisfaction as a business

owner. The two independent variables are gender (male and female) and education level (8th

grade, high school, associate’s degree, bachelor’s degree, master’s degree, and doctorate).

Quantitative Data Analysis

One hundred and ten individuals participated in the survey; 55 (50.0%) were male and 55

(50.0%) were female. Thirty-two (29.1%) of the participants have a high school diploma, 20

(18.2%) have an associate’s degree, 38 (34.5%) have a bachelor’s degree, 18 (16.4%) have a

master’s degree and 2 (1.8%) have a doctoral degree. Ninety (81.8%) were married, 8 (7.3%)

were single, 11 (10.0%) were divorced and 1 (0.9%) was widowed. Sixty-nine (63.9%)

participants report that they had previous experience in the industry before starting the business,

39 (36.1%) did not. Frequency and percentages for participants’ ages at first starting a business

42

are presented in Table 2; where the most frequent response was 31-40 years, followed by 21-30

years and then 41-50 years.

Table 2. Frequency and Percentages for Participant’s Age at First Starting a Business

Gender

Total Male Female

Age F % F % f %

Under 20 1 0.9 1 1.8 -- --

21-30 28 25.5 17 30.9 11 20.0

31-40 36 32.7 17 30.9 19 34.5

41-50 23 20.9 10 18.2 13 23.6

51-60 15 13.6 7 12.7 8 14.5

61 and over 7 6.4 3 5.5 4 7.3

Table 3. Frequency and Percentages for Number of Years for Participants’ Businesses to Become Profitable

Gender

Total Male Female

Years f % f % f %

Less than 1 year 28 28.3 15 28.3 13 28.3

1-2 years 33 33.3 16 30.2 17 37.0

3-4 years 18 18.2 9 17.0 9 19.6

5-6 years 12 12.1 6 11.3 6 13.0

7-8 years 2 2.0 2 3.8 -- --

9-10 years 2 2.0 1 1.9 1 2.2

Longer than 10 years 4 4.0 4 7.5 -- --

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Sixty-four (59.8 %) of the participants reported that their parents had their own business;

43 (40.2%) did not. Twenty-seven (64.3%) of the participants who reported that their parents

were business owners also reported working in the business; 15 (35.7%) did not. Frequency and

percentages for number of years participants reported for their business to become profitable are

presented in Table 3; where the most frequent response was 1-2 years, followed by less than 1

year. The mean number of years participants have been in business was 17.85 (SD = 9.70).

Table 4. Frequency and Percentages for Participants’ Annual Profit Gender

Total Male Female

Profit f % f % f %

Less than $10,000 24 23.8 10 19.6 14 28.0

$10,001-$50,000 36 35.6 15 29.4 21 42.0

$50,001-$100,000 22 21.8 12 23.5 10 20.0

$100,001-$250,000 15 14.9 12 23.5 3 6.0

$250,001-$500,000 4 4.0 2 3.9 2 4.0

Frequency and percentages for participants’ annual profits are presented in Table 4;

where the most frequent response was $10,001-$50,000, followed by less than $10,000 and then

$50,001-$100,000. Frequency and percentages for participants’ annual revenues are presented in

Table 5; where the most frequent response was tied between $100,001-$250,000 and $250,001-

$500,000 followed by $500,001-$1,000,000. Table 6 presents the frequency and percentages for

participants’ sales growth; the most frequent response was 0%-5% followed by 6%-10%. Eighty-

nine (82.4%) of the participants reported that they currently had employees; 19 (17.3%) did not.

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Table 7 presents the frequency and percentages for the number of employee participants reported

having in the past 5 years; the most frequent response was 0%-5% followed by 6%-10%.

Table 5. Frequency and Percentages for Participants’ Annual Revenue Gender

Total Male Female

Revenue f % f % f %

$10,001-$50,000 11 10.7 4 7.5 7 14.0

$50,001-$100,000 11 10.7 2 3.8 9 18.0

$100,001-$250,000 23 22.3 10 18.9 13 26.0

$250,001-$500,000 23 22.3 11 20.8 12 24.0

$500,001-$1,000,000 18 17.5 12 22.6 6 12.0

$1,000,001-$2,000,000 13 12.6 11 20.8 2 4.0

$2,000,001 or More 4 3.9 3 5.7 1 2.0

Table 6. Frequency and Percentages for Participants’ Sales Growth over the Last 5 Years Gender

Total Male Female

Growth f % f % f %

0% % 27 26.5 14 26.9 13 26.0

6%-10% 21 20.6 10 19.2 11 22.0

11%-15% 9 8.8 5 9.6 4 8.0

16%-20% 16 15.7 6 11.5 10 20.0

21%-25% 6 5.9 3 5.8 3 6.0

26%-30% 5 4.9 3 5.8 2 4.0

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Table 6. (continued) Frequency and Percentages for Participants’ Sales Growth over the Last 5 Years

Gender

Total Male Female

Growth f % f % f %

31%-35% 3 2.9 3 5.8 -- --

36%-40% 2 2.0 1 1.9 1 2.0

41%-45% 3 2.9 1 1.9 2 4.0

46%-50% 1 1.0 -- -- 1 2.0

51% or More 9 8.8 6 11.5 3 6.0

Table 7. Frequency and Percentages for Number of Employees Participants’ Reported in the Past 5 Years

Gender

Total Male Female

Number of

Employees f % f % f %

0 to 5 95 89.6 45 84.9 50 94.3

11 to 15 5 4.7 4 7.5 1 1.9

16 to 20 1 0.9 -- -- 1 1.9

31 to 35 1 0.9 1 1.9 -- --

6 to 10 4 3.8 3 5.7 1 1.9

Participants were asked to rate on a scale of 1 to 5, where 1 represents least often and 5

represents most often, how customer satisfaction is measured in their businesses; results are

presented in Table 8. Responses from the six measures of customer satisfaction were combined

and then divided by the total number of items (6) to create the Customer Satisfaction composite

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score (M = 3.00, SD = 0.58): that is an attention to customer satisfaction scale, and not a direct

measure of customer satisfaction. Participants were also asked to rate on a scale of 1 to 5, where

1 represents least important and 5 represents most important, their main reason for personal

satisfaction as business owners; results are presented in Table 9. Responses from the five

measures of personal satisfaction were combined and then divided by the total number of items

(5) to create the Personal Satisfaction composite score (M = 2.93, SD = 0.86).

Table 8. Frequency and Percentages for Participants’ Ratings on How Customer Satisfaction is Measured

Least

Often Most Often

Satisfaction Measures 1 2 3 4 5

f % f % f % f % f %

Female

Verbally Ask 15 27.3 7 12.7 10 18.2 8 14.5 15 27.3

Repeat Sales 6 10.9 1 1.8 5 9.1 11 20.0 32 58.2

Referrals 9 16.4 5 9.1 10 18.2 7 12.7 24 43.6

Profitability 18 32.7 8 14.5 8 14.5 9 16.4 12 21.8

Surveys 43 78.2 7 12.7 -- -- -- -- 5 9.1

Male

Verbally Ask 14 25.5 5 9.1 15 27.3 8 14.5 13 23.6

Repeat Sales 3 5.5 2 3.6 5 9.1 11 20.0 34 61.8

Referrals 5 9.1 3 5.5 8 14.5 13 23.6 26 47.3

Profitability 24 43.6 13 23.6 5 9.1 5 9.1 8 14.5

Surveys 41 74.5 7 12.7 3 5.5 1 1.8 3 5.5

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Table 9. Frequency and Percentages for Participants’ Ratings on Reason for Personal Satisfaction as a Business Owner

Least

Important

Most

Important

Satisfaction Areas 1 2 3 4 5

f % f % f % f % f %

Female

Being the Boss 5 9.1 9 16.4 6 10.9 10 18.2 25 45.5

Ability to set Hours 10 18.2 6 10.9 15 27.3 11 20.0 13 23.6

Time Off when Desired 21 38.2 8 14.5 10 18.2 8 14.5 8 14.5

Income Potential 21 38.2 8 14.5 9 16.4 7 12.7 10 18.2

Pride in Quality 7 12.7 2 3.6 6 10.9 10 18.2 30 54.5

Male

Being the Boss 16 29.1 7 12.7 5 9.1 11 20.0 16 29.1

Ability to set Hours 22 40.0 12 21.8 10 18.2 4 7.3 7 12.7

Time off when Desired 28 50.9 10 18.2 12 21.8 2 3.6 3 5.5

Income Potential 28 50.9 10 18.2 12 21.8 2 3.6 3 5.5

Pride in Quality 10 18.2 -- -- 2 3.6 7 12.7 36 65.5

Covariate Assessment

Variables are entered as covariates due to their known association with dependent

variables. Bivariate analyses (correlations and ANCOVAs) were conducted to assess which of

the demographic variables were related to the EQ subscales and measures of entrepreneurial

success (dependent variables). Results revealed that marital status, years in business, and years to

profit were related to EQ. Due to their relationship with the EQ subscales, marital status, years in

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business, and years to profit were entered as covariates in Hypothesis 1. Results of the

correlations and ANCOVAs also suggest that years in business, previous experience, current

employees, family business, and age at first business were related to entrepreneurial success. Due

to their relationship with the entrepreneurial success subscales, years in business, previous

experience, current employees, family business and age at first business were entered as

covariates in hypothesis 3.

Hypothesis 1

To examine hypothesis 1—There are differences on the 11 EQ scales by gender (males v.

females)—1 MANCOVA and 11 ANCOVAs were identified in Chapter 3 as the appropriate

analysis, using the 11 EQ scales as the dependent variables and gender as the independent

variable. Previous analyses revealed that marital status, years in business, and years to profit

were related to the EQ subscales, thus a MANCOVA and 11 ANCOVAs were conducted—these

three variables were entered as the covariates. The assumptions of ANCOVA—normality and

homogeneity of variance—were assessed.

A MANCOVA and 11 ANCOVAs were conducted to assess if differences exist on the 11

EQ subscales by gender (male v. female) while controlling for marital status, years in business,

and years to profit. Preliminary analyses (one-sample K-S test) revealed that adaptability, time

management, and intuition were not normally distributed; however Stevens (2002) suggested that

with large enough samples (N > 50) the sample assumes normality. Box’s M and Levene’s tests

were not significant, suggesting homogeneity of variance/covariance matrices. Results of the

MANCOVA suggested that after controlling for marital status, years in business, and years to

profit, a significant difference existed on the 11 EQ subscales by gender, F (11, 84) = 5.69, p <

.001 (η2 = 0.89, Power = 1.00). Univariate ANCOVAs are presented in Table 10. After

49

controlling for marital status, years in business and years to profit, results suggest that males

scored significantly higher on adaptability, risk tolerance, time management, extroversion, and

thinking, compared to females. Females scored significantly higher on planning, goal orientation,

intuition, and perceiving, compared to males. No other significant differences existed; estimated

marginal means are presented in Table 11.

Due to a significant MANCOVA, hypothesis 1—differences exist on the 11 EQ scales by

gender—was retained; the null hypothesis was rejected. Differences were revealed on the 11 EQ

scales between males and females.

Table 10. ANCOVA on EQ Subscales by Gender EQ Subscales F Sig. η2 Power

Adaptability 3.60 .009 0.13 0.86

(808.62)

Risk Tolerance 9.65 .001 0.29 1.00

(645.46)

Time Management 3.80 .007 0.14 0.88

(381.70)

Creativity 2.26 .068 0.09 0.64

(690.32)

Strategic Thinking 1.44 .228 0.06 0.43

(333.54)

Planning 6.32 .001 0.21 0.99

(441.42)

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Table 10. (continued) ANCOVA on EQ Subscales by Gender

EQ Subscales F Sig. η2 Power

Goal Orientation 5.27 .001 0.18 0.96

(419.29)

Extroversion 3.40 .012 0.13 0.84

(712.25)

Intuition 6.17 .001 0.21 0.98

(527.95)

Thinking 6.08 .001 0.21 0.98

(392.46)

Perceiving 3.69 .008 0.14 0.87

(488.34)

Note. df = (4, 94). Numbers in parentheses represent MSE.

Hypothesis 2

To examine hypothesis 2—There are relationships between the 11 EQ scales and the 6

measures of entrepreneurial success (males v. females)—three canonical correlation analyses

were performed to assess the pattern of relationships between the EQ subscales and the measure

of entrepreneurial success for the overall sample and separately for males and females. Canonical

correlations are used to see if two sets of variables are related. Canonical correlations also reveal

how many ways or how many reliable groupings exist between the first set of variables (EQ) and

the second set of variables (entrepreneurial success). Results of three canonical correlations (see

Table 12) revealed no significant groupings between EQ and entrepreneurial success. The results

suggest that the first set of variables, EQ, is not related to the second set of variables,

entrepreneurial success. Due to no significant canonical groupings, hypothesis 2—relationships

51

exist between the 11 EQ scales and 6 measures of entrepreneurial success—was rejected; the null

hypothesis was retained. No significant relationships existed between the 11 EQ scales and the 6

measures of entrepreneurial success.

Table 11. Estimated Marginal Means and Standard Errors on the EQ Subscales by Gender Gender

Female Male

Dependent Variable M SE M SE

Adaptability 23.05 4.22 38.22 3.93

Risk Tolerance 42.50 3.77 68.24 3.51

Time Management 68.64 2.90 68.71 2.70

Creativity 52.36 3.90 59.61 3.63

Strategic Thinking 63.35 2.71 68.11 2.52

Planning 62.65 3.12 60.63 2.90

Goal Orientation 55.00 3.04 53.12 2.83

Extroversion 48.58 3.96 54.67 3.69

Intuition 47.39 3.41 41.62 3.18

Thinking 40.64 2.94 59.50 2.74

Perceiving 45.06 3.28 30.53 3.05

Note. Covariates appearing in the model are evaluated at the following values: years in business = 18.41, marital status = 1.17, years to profit = 2.48. The values above are the means for each of the covariates and were used to adjust the dependent variable (EQ) scores prior to assessing if differences existed on EQ subscales by gender.

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Table 12. Canonical Correlation among Entrepreneurial Success and EQ Subscales for Females

Canonical Correlations

Coefficients

χ2

df

Sig.

Overall

1 .489 67.71 66 .418

2 .450 43.42 50 .733

3 .333 23.32 36 .949

4 .295 12.87 24 .968

5 .202 7.80 14 .988

6 .110 1.08 6 .983

Males

1 .692 71.08 66 .312

2 .612 44.34 50 .699

3 .503 25.10 36 .914

4 .379 13.14 24 .964

5 .320 6.77 14 .944

6 .236 2.35 6 .884

Females

1 .629 51.54 66 .904

2 .609 32.39 50 .975

3 .403 14.77 36 .999

4 .315 8.04 24 .999

5 .244 4.06 14 .995

6 .210 1.72 6 .944

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Hypothesis 3a

A MANCOVA and 6 ANCOVAs were conducted for females to assess if differences

exist on the 6 measures of entrepreneurial success by education levels (high school diploma v.

associate’s degree v. bachelor’s degree v. master’s/doctorate) while controlling for years in

business, previous experience, current employees, family business, and age at first business.

Preliminary analyses (one-sample K-S test) revealed that annual profit, increase of employees,

personal satisfaction, and customer satisfaction were not normally distributed; however, Stevens

(2002) suggested that with large enough samples (N > 50) the sample assumes normality. Box’s

M could not be computed due to fewer than two nonsingular cell covariance matrices; Wilks’s

lambda, a more conservative statistic, was used. Levene’s test was not significant; the

assumption of homogeneity of variance was met.

Table 13. ANCOVA on Entrepreneurial Success by Education Level for Females

Dependent Variable F Sig. η2 Power

Personal Satisfaction 1.02 0.44 0.19 0.39

(0.39)

Customer Satisfaction 1.03 0.44 0.20 0.39

(0.55)

Annual Profit 1.78 0.12 0.30 0.66

(0.92)

Annual Revenue 3.04 0.01 0.42 0.91

(1.54)

Sales Growth 0.49 0.86 0.11 0.19

(10.15)

Increase Employees 1.06 0.41 0.20 0.41

(0.48)

Note. df = (8, 42). Numbers in parentheses represent MSE.

54

Results of the MANCOVA (see Table 13) suggest that after controlling for years in

business, previous experience, current employees, family business, and age at first business, a

significant difference does not exist for females on the 6 measures of entrepreneurial success by

education levels, F (18, 79.68) = 1.05, ns, (η2 = 0.18, Power = 0.63).

Univariate ANCOVAs reveled that a significant difference existed on annual revenue by

education level; however, paired comparisons did not reveal any significant difference between

the education levels. No other significant mean differences were revealed on the 6 measures of

entrepreneurial success by education levels; estimated marginal means are presented in Table 14.

Table 14. Estimated Marginal Means and Standard Errors on Entrepreneurial Success by Education Level for Females

High School Associate’s Bachelor’s Master’s/Doctorate

Dependent Variable M SE M SE M SE M SE

Customer Satisfaction 3.14 0.22 3.06 0.21 2.78 0.15 3.15 0.28

Personal Satisfaction 3.09 0.26 3.01 0.25 3.22 0.18 3.80 0.33

Annual Profit 2.05 0.34 2.15 0.33 2.26 0.23 3.26 0.42

Annual Revenue 3.89 0.43 2.87 0.42 3.31 0.30 3.78 0.55

Sales Growth 3.54 1.11 4.12 1.09 3.44 0.76 4.20 1.40

Increase Employees 0.99 0.24 1.07 0.24 1.39 0.17 0.91 0.30

Note. Covariates appearing in the model are evaluated at the following values: years to profit = 3.43, current employees = 0.81, years in business = 18.12, previous experience = 0.71, and family business = 0.52. The values above are the means for each of the covariates and were used to adjust the dependent variable (entrepreneurial success) scores prior to assessing if differences existed on entrepreneurial success by education level for females.

A MANCOVA and 6 ANCOVAs were conducted for males to assess if differences exist

on the 6 measures of Entrepreneurial success by education levels (high school diploma vs.

55

associate’s degree vs. bachelor’s degree vs. master’s/doctorate) while controlling for years in

business, previous experience, current employees, family business, and age at first business.

Preliminary analyses (one-sample K-S test) existed that annual profit, increase of employees,

personal satisfaction, and customer satisfaction were not normally distributed; however Stevens

(2002) suggested that with large enough samples (N > 50) the sample assumes normality. Box’s

M could not be computed due to fewer than two nonsingular cell covariance matrices; Wilks’s

lambda, a more conservative statistic, was used. Levene’s test was not significant—the

assumption of homogeneity of variance was met.

Table 15. ANCOVA on Entrepreneurial Success by Education Level for Males Dependent Variable F Sig. η2 Power

Customer Satisfaction 0.96 0.48 0.16 0.38

(0.26)

Personal Satisfaction 1.20 0.32 0.19 0.48

(0.81)

Annual Profit 0.70 0.68 0.12 0.28

(1.43)

Annual Revenue 1.89 0.09 0.26 0.71

(2.24)

Sales Growth 4.12 .001 0.44 0.98

(7.27)

Increase Employees 1.89 0.09 0.26 0.71

(0.94)

Note. df = (8, 42). Numbers in parentheses represent MSE.

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Hypothesis 3b

Results of the MANCOVA suggest that after controlling for years in business, Previous

experience, current employees, family business, and age at first business, a significant difference

existed for males on the 6 measures of entrepreneurial success by education levels, F (18,

105.14) = 1.21, p < .05, (η2 = 0.22, Power = 0.91).

ANCOVAs showed a significant difference on sales growth by education level;

participants with an associate’s degree had higher means on sales growth compared to

participants with a bachelor’s degree. No other significant differences existed on the 6 measures

of entrepreneurial success by education levels (see Table 15); estimated marginal means are

presented in Table 16.

Table 16. Estimated Marginal Means and Standard Errors on Entrepreneurial Success by Education Level for Males

High School Associate’s Bachelor’s Master’s/Doctorate

Dependent Variable M SE M SE M SE M SE

Customer Satisfaction 3.08 0.13 3.14 0.16 2.93 0.15 2.97 0.17

Personal Satisfaction 2.66 0.23 2.80 0.28 2.36 0.27 3.19 0.30

Annual Profit 3.05 0.31 2.23 0.37 2.46 0.35 2.51 0.40

Annual Revenue 4.46 0.39 3.41 0.46 4.76 0.44 4.31 0.50

Sales Growth 4.28 0.69 5.54 0.84 2.54 0.79 3.74 0.91

Increase Employees 1.09 0.25 1.23 0.30 1.36 0.29 1.96 0.33

Note. Covariates appearing in the model are evaluated at the following values: years to profit = 3.27, current employees = 0.88, years in business = 19.44, previous experience = 0.61, and family business = 0.33. The values above are the means for each of the covariates and were used to adjust the dependent variable (entrepreneurial success) scores prior to assessing if differences existed on entrepreneurial success by education level for males.

57

Due to a significant non significant MANCOVA for females, hypothesis 3—Education

level impacts entrepreneurial success for each gender—was rejected; the null hypothesis was

retained. No significant difference existed on the 6 measures of entrepreneurial success for

females.

Data Analysis

Quantitative methods are designed to provide summaries of data that support

generalizations about the phenomenon under study. In order to accomplish this, quantitative

research usually involves few variables and many cases and employs prescribed procedures to

ensure validity and reliability. Using standards means that the research can be replicated and then

analyzed and compared with similar studies. Kruger (2003) confirmed that quantitative methods

allow for summarization of vast sources of information and facilitate comparisons across

categories and over time.

“Qualitative methods create openness between all parties and can help generate new

theories. Participating subjects can discuss issues that are important to them, rather than

responding to closed questions” (Kruger, 2003, p. 18). To complete the qualitative part of the

analysis, interviewees were selected from the 110 respondents of the quantitative study. Face-to-

face, structured interviews were conducted with 10 entrepreneurs, 5 male and 5 female, for

approximately 45–60 minutes each. Interview questions were designed to achieve a greater depth

and detail than quantitative techniques and to clarify any ambiguities or confusion over concepts.

“It certainly seems reasonable to suggest that one may have a better understanding of a

community members situation by reading a descriptive passage than just looking at demographic

statistics” (Kruger, 2003, p. 18).

58

Quantitative research methodologies were used to test the hypotheses proposed in this

study. However, several questions arose during the quantitative analysis that needed further

explanation through face-to-face interviews with the respondents. The goal of the qualitative

analysis was two-fold: first, to see if the qualitative sample was representative of the quantitative

sample, and second, to look more in depth at the lives of people who chose to become

entrepreneurs.

Therefore, this researcher was principally interested in experiencing the affective as well

as the cognitive aspects of the experience of entrepreneurship. An open-ended questionnaire was

developed to discover additional information about a subsample of the 110 subjects who

responded to the survey.

The twelve questions posed during the interview phase provided qualitative data relating

to responses for research questions 1 and 2:

1. Are there differences in men and women who choose to become entrepreneurs?

2. Are there differences in how men and women measure entrepreneurial success?

Data from existing literature illustrate the disagreement among researchers about whether

the personality characteristics associated with leadership differ between genders and whether

only replicating masculine characteristics can attain leadership. There appears to be agreement

about the different reasons that men and women go into business for themselves, how they define

success, and that women entrepreneurs have distinctive characteristics relating to social and

interpersonal skills. However, the existence of continuing disagreement about the specific gender

derivation and orientation of the leadership traits typically involved in entrepreneurial behavior

led to further exploration of these answers through qualitative data analysis.

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The qualitative data provided greater detail into why the participants chose to become

entrepreneurs, discussed various personality and managerial characteristics, explored reasons

behind their personal and customer satisfaction and success, and concluded with advice to

someone seeking entrepreneurship as a career. In addition, there were three other areas that

emerged as a result of talking with the entrepreneurs when collecting the completed EQ and

demographic surveys that were not part of the quantitative data. These areas included personal

satisfaction as a business owner, how entrepreneurial success is defined, and advice to someone

considering entrepreneurship as a career.

An analysis of the interview transcriptions was performed using the processes outlined in

Chapter 3. The qualitative data supplemented the quantitative data obtained from the EQ and

demographic survey and provided further detail in the areas of inquiry. Questions were asked in

reference to demographics, 4 out of the 11 EQ scales, and entrepreneurial success. The analysis

of the qualitative interview data is presented in this section. The analysis includes reason to

become an entrepreneur, previous experience, years to profitability, education level, adaptability,

extroversion v. introversion, risk tolerance, creativity v. traditional, customer satisfaction

measurements, personal satisfaction, entrepreneurial success, and advice.

Interview Protocol

At the cessation of the quantitative data collection, of the 110 respondents from the

quantitative study, a subsample of 10 participants, five males and five females, were contacted

by telephone to schedule a structured, face-to-face interview. The subsample was aggregated

from participants who indicated their receptiveness to participate in the follow-up interview.

Although 80% of the 110 study participants expressed willingness to complete a follow-up

60

interview discussing their entrepreneurial experiences, only 19 participants could be reached for

the sequential interview. The last nine respondents who indicated interest in completing the

interview replied after the response deadline.

Interview Findings

An interview guide was used to initiate discourse. The face-to-face interviews were

conducted and recorded, then transcribed for each interviewee. Participants responded to the

interview questions in depth and appeared to have a clear understanding of the subject matter.

All of the participants were generous in their contributions of time and insight while participating

in the interviews and each expressed interest in the research topic.

Each transcript was read with reflection on the underlying meaning of the responses

during the exchange, looking further at new information that might explain some of the

quantitative results; seeking clarification on an event that originally seemed insignificant, but

could have significance to the study. Next, the transcripts were further studied to find recurring

phrases or common threads as well as differences. These categories were entered on Excel

spreadsheets. Qualitative and quantitative summaries were entered in table form to compare the

results from each method.

Qualitative Data Analysis

Demographic Data

The study explored the extent to which the subsample of interviewees was the same or

different from the quantitative sample. Four demographic variables were also collected for the

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qualitative sample: education levels, previous experience, years to profitability, and reason to

become an entrepreneur.

Education. The main way in which the samples differed was that the qualitative sample

was more highly educated than the quantitative sample. In the quantitative sample, 32 subjects

(29.1%) possessed a high school diploma, 20 (18.2%) had an associate’s degree, 38 (34.5%) had

a bachelor’s degree, and 20 (18.2%) participants possessed a master’s/doctorate degree. In the

qualitative sample, five of the ten interview participants possessed a master’s/doctorate degree,

one had a high school diploma, one had an associate’s degree, and the remaining three possessed

a bachelor’s degree.

Previous experience. The qualitative sample mirrored the quantitative sample in previous

industry experience before starting his/her business. In the quantitative sample, 69 (63.9%) had

experience, 39 (36.1%) had none. The qualitative sample indicated that 6 participants had

experience, 4 did not. The qualitative sample also provided additional insight into the nature of

previous experience for the small business owner. The following comments show that

participants gained experience from previous employers prior to opening their businesses, as

well as by developing a hobby into a business opportunity.

One respondent indicated that she had 10 years of industry experience with a previous

employer before opening her own similar business. A different participant recalled a hobby that

turned into a business,

Throughout college I hit flea markets and bought things at garage sales. I was well aware of buying and selling; not in a wholesale way, in terms of going to a warehouse: you buy it, then you sell it. But in a searching out and hunting-gathering kind of way: buying your stock here and there and then putting it together and selling it. I knew how to do that. (R9)

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One of the respondents recalled trying to buy an existing business when the owner did

not want to sell. The participant became an apprentice for a year and opened his own business

after learning the trade.

He sat down and he said it would be much easier if you learned how to do it and started your own business. He was absolutely correct. It’s a lot cheaper. It took a lot longer, but it evolved the way I wanted it to evolve. In terms of, if you know what you’re doing, you can start your own (business) for a lot less. He’s absolutely right, at least in this industry. (R7)

Years to profitability. This particular subsample differed slightly for the qualitative study.

Each of the respondents was asked how long it took for the businesses to become profitable. Less

than 1 year to profitability was the most frequent response for both the qualitative and

quantitative results for both the male and female samples, followed by 1-2 years (see Table 17).

The participants had different experiences regarding profitability of their businesses. To remain

profitable in their businesses was a continual process that had to be nurtured and grown. One

participant commented,

We were real lucky, pretty much right out of the gate. My business partner and I developed a product, a marketing strategy for other companies to use online. Within the first 2 or 3 months we sold that, put a client on a 5-year contract, and it was a big client and made the business profitable overall almost immediately. (R3)

Another participant indicated, “A year and a half with positive cash flow.” (R7) Another

participant suggested, “Into the third year, that I started seeing a profit and I too, started paying

myself a little bit also. I could do that.” (R2) One participant who had not yet made a profit

suggested that he would like to make money, but has his business because he loves what he does

and has a passion for it. One participant did not pay herself immediately, even after the business

became profitable.

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In the early stages, in the early years, everything we earned in the business we put back in the business in terms of money for inventory. In the beginning, I started out with one or two companies and as we began to get more companies coming to us and asking to carry their lines, we used our profit to buy more merchandise. I would say we started pulling money out of the business maybe 5 or 6 years after we established our business. We actually moved and opened the new store where we were open all the time. The first store we were open by appointment. (R6)

Table 17. Years to Profitability Summary

% of Responses

Qualitative Quantitative

Years to Profitability Male Female Male Female

< 1 Year 20 10 28.3 28.3

1-2 Years 10 10 30.2 37.0

3-4 Years 0 20 17.0 19.6

5-6 Years 10 10 11.4 13.0

7-8 Years 0 0 3.8 0.0

9-10 Years 0 0 1.9 2.2

> 10 Years 10 0 7.5 0.0

Note. Totals equal greater than 100% due to rounding.

Reason to become an entrepreneur. The qualitative study varied significantly between the

reasons males and females became entrepreneurs. Forty percent of the female sample indicated

they became entrepreneurs because they were not satisfied working for others, while only 20%

of males indicated this reason. Thirty percent of the males and 0% of the females indicated they

had previous entrepreneurial success when younger, and 10% of the females and 0% of the males

indicated there was a need in the community that was not met.

”Not satisfied working for others” was derived directly from the interview question

soliciting the main reason the participant chose to become an entrepreneur. All participants had

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personal needs that were not met prior to opening a business of their own. Six of the participants

commented that they were not satisfied working for their previous employers. One participant

shared, “Mainly because I was tired at being at the mercy of others – bosses, bosses of bosses. I

was at the university and was an academic for quite awhile. That wasn’t that pleasant for me

personally.” (R4) Two were fired from their jobs.

I think like many people who do this, to a large degree, I wasn’t a good employee of someone else. Although I had worked in the school system and done other jobs, I think I always felt I would enjoy being my own boss, whatever that would take. I think a lot of entrepreneurs either are fired or they tend to the decision that they really are not the best employee. (R10)

Two had experiences with entrepreneurship earlier in their youth. One participant

recalled his first business while still in college:

Started out with a couple hundred bucks to buy a used car. It was much more wildly successful and kind of a full-blown destiny. It took awhile to put together, but once it was put together, we were making a lot of money. Buyers were happy, very satisfied. In fact, a lot of people were laughing at these things, but we were laughing all the way to the bank…Having been there, been successful once, you get a taste of it. It’s very motivating. (R7)

One participant retired from a long-term career and sought a business to keep him active

in the community. His wife had previous experience in retail and it seemed a natural transition.

Another participant shared that the products she was seeking were not available in the

community. She decided to research these specialty products and opened a home-based business

with a few vendors that eventually grew into a full-scale niche market. Reason to become an

entrepreneur was measured qualitatively. The three top reasons for becoming an entrepreneur

included (a) not satisfied working for others, (b) success as an entrepreneur when younger, and

(c) a need in the community was not met.

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EQ scales and Managerial Characteristics

Qualitative data was collected on a subset of the items in the EQ. These included

adaptability, risk tolerance, extroversion versus introversion, and creative versus traditional.

Adaptability. Adaptability in this study refers to whether the participants reached outside

of their immediate circle of friends and contacts and formed new alliances to acquire resources

needed to accomplish business objectives. The participants in the qualitative study showed high

levels of adaptability, with both males and females at 100%. Many participants indicated

traditional alliances such as banks or friends, and some indicated local and specialized

networking contacts that were unique to their type of business. Other responses included having

a partner and making contacts with local civic groups such as the Chamber of Commerce.

The quantitative study results were significantly different from the qualitative results (see

Table 18). Adaptability meant that entrepreneurs sought resources outside their immediate

friends and family to accomplish business objectives. A participant who used a bank to get

started shared,

Yeah. As far as like bankers and like that kind of thing, yeah. And businesses, companies that I deal with, yeah. As far as anything else, no. And sometimes I think I should, but that would require time I don’t have right now. (R8)

One participant commented,

Definitely. I contacted our local Chamber of Commerce, the women’s division of the Chamber of Commerce, American Business Women’s Association, spoke at schools, and just made different contacts earlier in networking, and Business Network International, a weekly meeting group for networking. (R2)

Another participant indicated the importance of client interaction,

Literally to go in and say, hey, we’re thinking about this, being in your business, does that make sense to you?…So, it’s a good example of how we knew we needed to learn

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about the business we were getting into and the likely customers of a business like that. It was really part of that fact-finding mission that actually turned the company profitable almost immediately. (R3)

One participant suggested, “Well, I was pretty independent. I started with a partner. I

bought the partner out after three months. I guess, in some ways I used her resources when we

started…” (R9) Another participant shared,

As far as reaching out to acquire new avenues of sales, I began by working in my home and having parties where people would come in to see my merchandise and I initially worked with friends and worked with friends of friends and they would organize a party. I would give the party and then make my sales through this process. The next stage was to open the store. (R6)

Table 18. Adaptability Summary % of Responses

Qualitative Quantitative

Adaptability Male Female Male Female

Low (0-6) 20 36

Medium (9-60) 49 44

High (> 66) 100 100 31 20

Risk Tolerance. This qualitative subsample had slightly different results from the

quantitative. With risk tolerance on a scale from 1 to 10 with 1-3 = low risk, 4-6 = moderate risk,

and 7-10 = high risk, two female participants indicated they were comfortable taking low risks,

one was in the moderate range, and three were in the high-risk range. Compared to males, one

male indicated that it depended on the decision to be made, none were in the low risk range, one

was in moderate risk range, and three were in the high-risk tolerance range. Therefore, males

were more risk-tolerant than females (see Table 19).

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The quantitative results showed that 44% of the female sample was more comfortable in

the low risk range, 40% moderate risk, and 16% high risk tolerance range. Quantitative results

for the male sample was 13% low risk tolerance, 49% moderate risk, and 38% indicated comfort

with higher risk.

Table 19. Risk Tolerance, Qualitative Results Male Female

Low (1-3) 0% 20%

Medium (4-6) 10% 10%

High (7-10) 30% 20%

Depends on the Opportunity 10% 0%

Note. Total of both genders equals 100%.

Interviewees were asked on a scale of 1 to 10, with 1 being a low risk and 10 being a high

risk, “How would you rate your willingness to accept possible business loss in order to achieve

possible future gain?” Three answered that they would feel comfortable with a “7;” one

participant shared,

Oh, probably a 7 or 8, but that would hugely play into how much of a loss. If it was a little loss, it might go up to a 10. If it was a huge loss, it would go down to a 6 or 7. It would depend on how much I was risking as to how high that would be. (R8 )

Two indicated an “8;” one participant suggested,

Oh, I’m definitely in the 8 to above category. I’ve never seen where I’ve stayed static for–I don’t think you can. I quite honestly don’t think you can function in a way that some people try to do, which is a 1–2% risk. I’m definitely an 8, 9, 10 or something depending on what it is and which day of the week it is. (R1)

One respondent indicated a “5” and commented,

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Well, to start with I’m going to say 5. Five is to me halfway between 1 and 10. I think I may have been riskier in the past. Now that I’ve been in business for so long, I’m a little less risky because I think I know the lay of the land a little bit more. And because I’ve had success I know where that comes from. And I’m a little less inclined to enter because things work well the way they are. Now to get there, you have to take the risk to find your way. I bought a store in Champaign in ’95. I thought multiple locations would be the answer to the cash flow problem. Well, that equation was done right until the Internet came along. Then I had to consolidate rather than expand. So, now when someone comes up with an idea for a business, I’m pretty skeptical right off the bat. On the Internet, so many people are coming up with schemes who are selling, you really have to look at those things and see how it fits into the systems that you’ve built up for many years and see how that works within the system. I wouldn’t take a risk now because the system works so well now. By taking a risk, consequences of failure are stronger now than they were 10 years ago. So, I would have to say that on a scale from 1 to 10, that would have been 3 to 4 twelve years ago, and maybe 6 to 7 now. (R9)

One participant indicated a “6,” suggesting, “I would go a 6. I’d be more willing to take a

risk.” (R2) One indicated a “2,” and mentioned,

Probably 2. I don’t take a lot of risk. If I would feel I was losing money for any period of time, I would be very reluctant to do that. I am willing to not make money for a period of time, but not really to lose money. (R10) One participant indicated a “1,” stating the reason,

I don’t think I’ve ever really entered any type of endeavor, any type of purchase with the idea that I would initially take a loss to make a gain. I think I have always felt that I was certain about it. Now, that’s not to say that we haven’t had product that didn’t turn out well. But my initial feeling when I purchase something was that is going to be profitable and we were going to be successful with it. As far as taking a risk, I don’t feel comfortable taking risks; particularly if it’s going to be a financial risk. I will take a risk if it involves my own work. I would take a risk that way. If it’s a financial risk that would be affecting my family, no, I would not take a risk and I would probably rate myself a 1 or 2. (R6)

One respondent indicated an “unknown” response. He indicated to the researcher,

That’s a difficult question because it depends on your opportunity. When I was helping people buy businesses, buy, there were types of businesses that one would have that potential, again, what to ask, you’re buying this business, it’s at this state right now, what are you going to bring to it? What are you going to do to it to get it to where you want it to be? (R7)

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Extroversion versus introversion. The results of extroversion v. introversion were

inverted by gender in the qualitative and quantitative responses. Qualitative for extroversion for

female was 30%; 20% for male. Quantitative for extroversion was 47% for female and 55% for

male. Introversion for the female qualitative results was 20%; 30% for male. Introversion for

female quantitative was 53%; 45% for male. Therefore, extroversion is higher for males on the

quantitative results and higher for females on the qualitative results. Introversion is higher for

females on the quantitative results and males were higher on the qualitative results.

Each participant was asked if they considered himself or herself to be more of an

extrovert or an introvert. The following definition of each was given: Extroverts direct their

energy mainly toward the outer world of people and objects. Introverts direct their energy mainly

toward the inner world of experiences and ideas. Five considered themselves extroverts; five

considered themselves more introverted. The participants who identified themselves as

extroverts were people who enjoyed being around people and sought to build relationships with

them. The participants who identified themselves as introverts indicated that while they are

mostly introverts outside of their businesses, they find it necessary to become more extroverted

when building relationships with their customers. A participant who classified himself as more of

an introvert made the following comment:

I would say introvert, but that has changed. It’s a lot more fun to joke around with some of the customers. Yeah, if you own your own business, you need to be a little more out, and you get the cold calls, yeah. (R7)

Even an identified extrovert indicated there are times when he displays some introverted

characteristics.

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It’s interesting, Myers-Briggs says that I’m an extrovert, and I probably am in practice. At the same time, I feel very strongly, I relish alone time for thinking and stuff like that. I used to actually live about 30 miles from the office and I, really my family wanted to move closer to town and we ended up doing it. The biggest obstacle for me in my life was that I loved that 30 minutes of time, because in many cases, days, that’s the only time I was alone with the things I had to think about and the things I had to plan in my head and those kinds of things. So, I feel like I’d like to be more of an introvert and I feel like that’s a natural calling. Every indication, you know, I’m a politician, an elected official, I’m running a business, and I’m bugging the customers all the time. I, in practice, I probably am an extrovert. (R3)

One participant indicated,

I think I’m both. And I have taken tests where I think I test both. So, I need about, I can’t be one way without the other way. I think deep inside I’m more of an introvert. But I definitely focus on my art. I’ve got a strong element in that too. I could never be just one or the other. (R4)

Creative versus traditional. This subscale describes the manner in which the candidate

thinks about and acts upon new ideas. Creative entrepreneurs think and operate in an innovative

manner, implementing and promoting new ideas, new products, new markets, and new programs.

Traditional entrepreneurs prefer to rely on proven solutions, feeling secure with the traditional

business and business systems that have worked in the past.

Participants have a score on both the creative scale and traditional scale. The higher score

of the two indicates that the participant is either more creative or more traditional. The lower the

score, the less creative or less traditional the participant is. The qualitative results for creative

females and males (20%) mirrored one another. Traditional results indicated that females are

slightly higher (10%) than males (0%). Both male (30%) and female (20%) samples indicated a

preference for both creative and traditional, depending on what was needed in the best interest of

the business. Therefore, both male and female had low scores on creative and traditional

separately; however, the highest scores for both female and male samples are for the preferences

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of both creative and traditional. The quantitative results mirrored a moderate level for both male

and female samples on creative and also for traditional levels. Thus, a balance of both creative

and traditional traits is important in a successful business.

Five of the respondents described themselves both as being innovative and using

traditional business systems. Four indicated they were innovators and one indicated he/she was

traditional. The interview question that was asked of each respondent was, “Are you an

entrepreneur who thinks about and acts upon new ideas and operates in an innovative manner

implementing and promoting new ideas, new products, new markets, and new programs, or do

you prefer to rely on proven solutions, feeling secure with traditional business and business

systems that have worked in the past?” One participant who answered the question as both an

innovator and traditional provided the following response:

I would say I’m a combination of those. I definitely have favorites that we’ve had for many years and we continue to use them as long as they are still showing they are a success for us. And so, probably 50%-60% of the things we have and continue to use are proven successes. We always want to stay on the cutting edge and so we’re constantly looking for new product and do research that intensively. I go with sales representatives that I’ve had proven success with. These are people that choose things carefully, research it carefully before they present it to me. So, I’m always looking for new product and wanting to stay ahead of the market. (R6)

The participants who considered themselves more innovative shared, “Definitely the first.

We’re out of the box. Not the traditional. We try something. If it doesn’t work, back to the

drawing board. That, we like different, not the run-of-the-mill way of doing it” (R2). One

respondent who answered that she utilizes a more traditional business system offered the

following:

Now, I would like to initiate more new programs and everything. The more I initiate, the more work it is. So, I balance that with my willingness to work harder and want more and I have to balance that. I can only work so much. And so, I’m willing to give up some

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profit in order to have that introspective time, which I need as well. I probably not nearly as innovative as a lot of entrepreneurs that are just go, go, go, go, all the time. I’m much more slow. But it’s not just because of conservatism; it’s just because of energy consumption. (R4)

Entrepreneurial Success

The qualitative data also focused on how the respondents measured customer satisfaction,

how they measured personal success, and how they defined entrepreneurial success. The

respondents were additionally asked to provide advice to aspiring entrepreneurs.

Customer satisfaction. The qualitative results for customer satisfaction were slightly

different from the quantitative samples. Qualitative results indicated that verbally asking

customers was mirrored for both males and females and quantitative results indicated that repeat

sales were mirrored for males and females. Other responses included referrals and word-of-

mouth, as well as surveys (see Table 20).

Table 20. Customer Satisfaction Measure Summary % of Responses

Qualitative Quantitative

Measure Male Female Male Female

Surveys or Questions 0 10 5.5 9.1

Verbal Inquiry 20 20 23.6 27.3

Repeat Sales 20 10 61.8 58.2

Referrals 10 10 47.3 43.6

Profitability 0 0 14.5 21.8

Note. Totals equal greater than 100% due to multiple answers.

Participants were asked how they measured customer satisfaction in their businesses.

Four indicated that they ask their customers. One respondent shared,

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That’s one we work on every day. We have signage to the employees to encourage them that our number one objective is to treat the customer nicely. I talk to as many as I possibly can and ask them how did we do. So, I don’t know if that’s adequate or not, but that’s crucial for a business like this, crucial – customer satisfaction. (R5)

Another participant suggested that sampling the product can also play an important part

in asking the customer,

Well, for us, that’s easy. ‘Cause people try it and if they like it, they buy it. We play on that. We’ll put samples out. We know they are seconds. They’re quality, they’re leaking or something, but somebody eats them and they do like and they are impressed by the quality and they buy it. Also, people let us know if pecans are bad or rancid and it’s good they tell us because we might be sampling, but not all the time and somebody gets a bad one. And some people for whatever reason – we had a gal that bought, people make a purchase of something, they’ve never tried it and don’t like it for whatever reason, there’s nothing wrong. They say there’s something wrong with it. And that happens too, but we can taste and can say, yeah, and pull it. So we’re always kind of okay, test it, check around, and we’re able to verify it’s good or it’s bad. (R7)

One participant mentioned that sometimes he get invited to people’s houses to see if he

likes where they’ve hung his art. Three indicated that they measure it by repeat visits.

We always talk to customers and I get a lot of feedback from the customers. It’s mostly interaction and keeping track of how much repeat business we have. It’s sort of an informal way. We don’t have a system really of doing that. I think the regularity of customers coming back gives an indication, plus we do get a lot of feedback from people coming in and saying they have been recommended by other people. (R10)

Another participant indicated the importance of repeat visits.

I measure customer satisfaction by repeat visits. We are very familiar with our customers, although our customer base is large. We greet people at the door. We thank them for coming and so we get to know them on a personal basis, not just as a customer–know their families, know their children. And so, we like hearing from them that they have recommended us to other people. Those are things that tell us that we are doing something right. We also will use advertising that meets the public both on the radio, a little bit on print, not nearly as much on print as we used to, but radio stations and then we watch for product that we’ve advertised. We watch to see if that’s the product that’s selling. So, we try to measure it that way as well. (R7)

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One participant indicated word-of-mouth.

Word-of-mouth is always the best. Anytime that we hear positive feedback we always send a thank you if someone’s referred in, we send a thank you and follow up with the person that referred them. With customers that do purchase their eyewear or sunglasses we always do a follow up call after about a week. And then, we send a handwritten postcard within about two weeks. We also keep in touch with them throughout the year with things going on, specials, events, and parties. (R2)

One participant indicated by referral,

One interesting thing about our business is that we haven’t spent a dollar advertising since 1999. We don’t advertise. By strict definition of the word marketing, we probably do a little bit of that in that we do have a customer referral program where existing customers can refer us to other customers and we’ll give them some abatement on their fees for a couple of months or something like that as part of the loyalty program. We also do a lot with non-profit organizations, where we will provide services to non-profit associations, but give them access to this referral program to actually use that as a way for not-for-profits to generate revenue for themselves. We’ve had some success with that. In terms of advertising, we’ve not. Getting back to your questions of customer satisfaction, we really do measure customer satisfaction with the one crystal clear indication of whether or not they are happy or not happy with us, is whether they will tell their friends. We really believe that to be true. When we were smaller, I used to be dead set that as president of the company I was going to call every one of our customers every six months and ask them how we were doing. And I did that for a couple of years. We’re to a point now where it’s not practicable anymore to do that and even at that, I can have a conversation with a customer in August, how we’re doing, oh, you’re doing great, you’re doing great, we couldn’t be happier. Then in September, we get the email that we’re transferring our website to such-and-so. I think in terms of completely honest, customer service indicators, it is about referrals. If you ask them to refer you and they are happy with you, they will. And if you ask them to refer and they’re not so happy or not happy at all, they won’t. (R3)

One respondent indicated he/she used surveys and indicated,

We have had surveys at the insurance company we’ve been serving. I’ve done a survey here before, too. We’ve asked for suggestions. We get to know people pretty well here. So, they’ll often give us feedback about what they like and what they’d like to see changed. I don’t have a real organized way of gathering that information right now. (R4)

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Entrepreneurial success. The results for male and female samples differed slightly. The

results indicated that achieving financial rewards was equally important for males and females.

Females sought recognition for their work more than males; males searched for opportunities

that offered a challenge. Being passionate about business was more important to females than

males, and relationship building was more important for males than females (see Table 21).

Table 21. Entrepreneurial Success, Qualitative Results

Male Female

Financial 10% 10%

Recognition 10% 20%

Challenges 10% 0%

Passion 10% 20%

Relationships 10% 0%

Note. Total of both genders equals 100%.

Participants were asked how they defined entrepreneurial success and how they knew

when they achieved or exceeded it. Three said it is loving what you do.

Doing something you love to do, making enough money to live on, not an excessive amount, know when enough is enough, and contributing to the society, doing something useful. All the friends and associates you meet through your work are precious. That it contributes to a wholesome, happy lifestyle that works. (R4)

Another respondent shared,

I’m sure that’s different for everybody. But, for me personally, again, it’s not the money and it’s not if I have one store or five stores or–that’s not it. For me, it’s doing what I love to do and being able to work, that with being a mom and having that freedom to come and go instead of being at State Farm and waiting for that bell to ring so I can leave my desk. Now, that, to me, is what makes it successful because you’re doing what you love to do and you’re doing it on your own terms and your own time. It’s not the money. I’m sure for a lot of people it is. (R8)

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Twenty percent indicated that it was financial:

For me, and I’m sure everyone is different here, it’s being able to make an adequate living and I don’t need to go a long way above that to feel successful. But I do, would, feel very unsuccessful if I’m unable to support myself financially in a comfortable way that I feel comfortable with. (R10)

Two said it was recognition:

Entrepreneurial success for me has been recognition by the community, recognition by people throughout the state that have found out about our store, sent people to see our store, we have people from all over the United States that travel through and come back to visit again and again. Those kinds of things make me feel successful. I don’t know that you ever feel that you have exceeded it. I think you’re constantly wanting to be, have some kind of approval. Being in business is extremely hard work and particularly if you are attempting to be successful with it. You put in tremendous time and energy. So you need some kind of feedback and think a person telling you that you’re doing a good job, a teacher telling you that the products that she’s received have been well received by the children. I don’t know that you can exceed it. I think you’re always, as you continue to work, you’re always looking for more recognition. (R6)

One participant indicated that there is always more,

Wow, that’s tough. I don’t know. I don’t know there is such a thing you can put on a scorecard. There are a lot of people that would say I’ve kept the lights on in this building for 5 years; I guess that’s success. I guess, the classic answer is I now know it when I see it. I guess I’m not all that optimistic that I’ll ever see it. Because, I think in my mind that’s what makes an entrepreneur, that they always believe that there is more. That there’s more customers, more products, more services that can be offered, a higher level of quality, or whatever. Obviously, it doesn’t answer your question. How will I know, I don’t know how I’ll know. I know that I’m not there yet (R3).

One said it is proving it can be done.

To come into an area when your bankers think you’re on drugs when I take them downtown. Why are you locating there? Nobody goes downtown. We came down and saw a lot of opportunity in the downtown. Unfortunately, what’s happened with [location] is unfortunate that they have chosen bars over retail, which is another; it’s out of our hands. It’s all, in a lot of other towns where downtowns, when put in specialty shops the way the downtown wants to be, way before, it’s happening. Things have changed with a political attitude that’s not there to support us. To come in and everybody is giving you six months you’ll be out of business, when your contractors have that attitude that they are going to charge you through the nose and in six months you’ll be

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closed. You get this feeling that; it kind of makes you mad. Everyone wants to hit a home run off you and take your money. They don’t care. They want to get paid now. I can’t blame them, I guess. But to be here 8 ½ years later despite the attitude of the local city government supporting malls and small customer support. I can stand up anywhere in the United States and not be ashamed of it. We’re still here, we’re still profitable, and we’re still in business. We have a lot of potential, but we won’t achieve it unfortunately, at this location, at least not under this set of circumstances. We still focus on a quality product. Whether we’re here or across town, whatever. Still do what you have to do. We’ve achieved it. (R7)

Personal satisfaction. Personal satisfaction showed the most significant differences

between quantitative and qualitative responses. The qualitative results differed from the literature

review in that men and women, according to Helm (1997, p. 17), have different reasons for

entering business and that women have internal-stable reasons (“I want to be my own boss”),

while men have external-stable reasons (“I saw a terrific market opportunity”). When

participants had an open-ended choice on how to respond in an interview format, none of the

participants indicated any of the choices from the quantitative study (see Table 22).

Table 22. Personal Satisfaction Summary

% of Responses

Qualitative Quantitative

Satisfaction Factor Male Female Male Female

Being My Own Boss 29.1 45.5

Taking Time Off 5.5 14.5

Pride 65.5 54.5

Set My Own Hours 12.7 23.6

Uncapped Income Potential 5.5 18.2

Interaction with People 20 20

Seeing a Change 10 10

Competing 10 10

Control 10 10

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Note. Quantitative totals equal greater than 100% due to multiple answers. Total of both qualitative columns equals 100%. Four of the participants indicated that the main reason for their personal satisfaction as a

business owner was interaction with people.

I would say the purpose of a business is to provide a financial gain for the family and my financial gain for the business. But I don’t know that I get as much pleasure from that as my interaction with the public and my interaction with the people that work for me. Different years are different because we have different staff. But, I would say we definitely measure at the end of the year to see how we have done against other years. I’m very self-competitive and so I’m always wanting to do better than what we did before, look for new product mixes that would do better. My initial goal was to have money for college for my children and I would say that’s what I was working towards to supplement my husband’s income so that we would have a comfortable way to send them through college. (R6)

Another respondent suggested,

Because I’m doing something that’s fun and helpful to people, and I need to feel like if I’m working hard that I’m doing something to benefit the society. I can’t just work that hard just for a paycheck. It’s not worth it to me. (R4)

One participant’s satisfaction included,

That’s a good question because it depends on the day you ask me. Because some days I have satisfaction, giving someone a book they’ve read and enjoyed and they love the book and come back and read more. Sometimes when you sell a very expensive book to someone, you have cash flow. Not money to go home and buy anything, but cash flow. But you know, I don’t know how much satisfaction plays a role considering why I had to start the business in the first place was to make a living. You realize this is making a living. There’s satisfaction in making a living. There’s some satisfaction in the fact that you’re dealing with books and you’re learning beyond what you could learn otherwise. People walking in, smarter than you and you have discussions with them on topics they know best, we learn from them. You develop personal relationships with those people beyond the customer and retailer relationship. It’s not based on the buying and selling, but on the discussion and exchange of ideas. That’s the only place where I would get satisfaction. Beyond that, if I won the lottery tomorrow, I wouldn’t have a bookstore. I would just, lock the door and walk away. I don’t need it then. My satisfaction would come from something else. I’ll be able to, 60 hours running a business a week. Satisfaction, how do you measure it? I guess what I do; it’s an accumulation effect, where somewhere down the line you’ll be able to exchange what you’ve built for what you’ve always wanted to do. But it’s an illusion that does keep one motivated. That maybe you’ll

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sell your business and partially retire on the results of your business. That’s the only drive I can think for success in business other than self-survival. (R9)

Two said they liked seeing a change.

Well, it’s not the money. My personal satisfaction is seeing the change, in this business anyway, in people’s houses you know, what you started with and what you end up with. That’s my personal satisfaction. That’s why I do it. That’s, it’s a goal oriented, but at the same time, it’s pretty. That’s what my draw is to this whole business. It’s not how many appointments I get or any monetary. My thing is because I love, you know, all the rest of it I just as soon not have to deal with. I want to be able to go into and make everybody’s houses pretty and all the hassles of the companies and I just as soon not have to deal with that. That’s not my forte. My forte is that. So, that’s where my satisfaction comes. It doesn’t come with all the bills being paid. I don’t even like dealing with that aspect of it. My satisfaction is in the transformation and having happy customers at the end of it that are thrilled to death and so excited about how their house looks. That’s where my satisfaction is. (R8)

Another participant suggested,

I think for me, it’s a personal satisfaction of being in business, driving some destiny. I love the teamwork aspects of it. Being the head of a team of people, who are all focused on pulling the oars in the same direction is pretty cool We got a lot of diverse, talented folks around here, just kind of neat to be part of that. I’m actually probably not good enough to be one of them. But, I’m the one that sign the paychecks, so they let me sit around the table. (R3)

Twenty percent suggested that they like being competitive. “This, well, there’s probably

several. But one is to get up everyday and go get the giants, the Wal-Marts, the K-Marts, the

Meijers, because we can outperform them. We do it well on customer service” (R5). Another

respondent commented that her service is unique.

We have people literally, I mean, we have customers, a couple flew in, had some from Florida, we had people realize that what we do is unique. I think the satisfaction of that is people enjoy coming in here because they aren’t only going to get good service, they’re going to get something you can’t get just anywhere. The whole packages that people enjoy. So, I get a lot of satisfaction knowing that we’re bringing in different to central Illinois but we’re also pulling in people from all over by word of mouth. (R2)

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Two suggested that having control is personally satisfying. “I think being able to be

totally in charge of my own time and life and destiny. I like that the best.” (R10)

Advice for people considering entrepreneurship. The final question asked what advice the

entrepreneurs would give to someone considering entrepreneurship as a career (see Table 23).

Four suggested that it is more important to be passionate, one indicated to know what your risk

tolerance level is, one indicated to be prepared to adapt and fail, one indicated to do something

that would benefit others, one said to be willing to give the business as much time as it takes, one

indicated to research your product/service/idea and learn as much as you can about it, and one

indicated that anyone can do it if you’re willing to do whatever it takes to become successful.

Table 23. Advice Summary, Qualitative Results Male Female

Passion 20% 20%

Time 0% 10%

Research 10% 0%

Beneficial to Others 0% 10%

Note. Total of both genders equals 100%.

One participant was so passionate in his advice that it must be included here,

I think that if you are truly an entrepreneur, you cannot not do it. You’ve go to do it because you can’t stand the thought that the world might exist happily without your product or service and your way of delivering it.…You have to know how the other person counts his points. And, in business, he’s been an expert at that in life and has done very well and, he’s still a good human being on the other end of it. I know, that myself, and other people, people who are truly entrepreneurial, the way they count their points, what makes it all matter to them is not really the money. It’s like me, they want the money. It’s not that they don’t want the money. They like the idea of being able to say that this did not exist. I did this, made this product, did this service, did this business model, whatever, and I made this work. And I, and I, all the people I know that are really entrepreneurial all have that same characteristic. (R1)

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Another participant shared,

You have to be passionate about what you’re doing. If you’re not, there are days I lock that door and I swear to god I’m never coming back. I’ve had it. But you have to be passionate about what you’re doing. It has to mean enough to you that you put up with all the stuff that you’re going to have to put up with. And yes, you put up with more than you would if you worked for someone else because everything is up to you. In reality, if you work for someone else, there’s pressure there too. To me, it’s almost easier to accept the pressures when they’re yours because the decisions you make affect you as the decisions you make if you’re working for someone else affects them. So, it’s not as important, and like I tell everybody, nobody cares about this more like I do. Nobody I ever had work for me, no sales rep. Nobody cares about it like I do ‘cause it’s mine. You have to be passionate about what you’re doing and really believe in it and do whatever it takes. (R8)

Yet another participant commented,

And if there is something you really hate about owning your own business, unless you have somebody else that’s going to help you or, you can’t just put blinders on and pretend it’s going to go away. All that needs to be done. So you have to make sure you have all your bases covered as far as getting it done correctly. Realize that it’s 24/7, it’s nonstop. Like I said with my computer issues this weekend and I don’t have the luxury of any computer geeks in my family and I don’t want to spend a fortune to get it fixed. So, it’s like getting it fixed myself and saving a few pennies here or there. It is hard work but it’s very rewarding. Realizing that you have to put a lot of time in on it and just when you think, oh, I might kick back and watch my favorite show tonight or go to a movie or go out to dinner with friends, something inevitably comes up that relates to business that you have to weigh out what’s more important, then I think that to be a good entrepreneur, you have to do what you feel is right, which is part of your business. (R2)

Another participant cautions on becoming too passionate about business ownership,

Long hours, sometimes when no one is coming in to buy books and you don’t see any hope in the future in terms of books or people reading or anything like that, take all of that, some people just want to be around books. If someone asked me if they wanted to become an entrepreneur, I would say, go into business doing what you know, what you like, but not what you absolutely love. Because if you absolutely love it, you will hate it after awhile as a way to make money. Have passion, but don’t let the passion get out of control. (R9)

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One participant indicated that it was necessary to put in the time to make the business

successful.

I suppose my advice would be that you have to be sure that you’re willing to be able to give as much time as a business takes. When people are used to working an 8–5 job and then they think it would be better to work on your own and work for yourself. You have to be willing to work evenings, you have to be willing to work weekends, you have to be willing to be home and have a customer call and need something and go back and open up the store. If you’re not comfortable doing those things, if you think that’s pulling too much time from your family, or if you do not have high energy, good health, resources to continue putting back into the business, I think you should probably stay you’re your 8–5 job. (R6) One suggested taking time to do research in the product/service area.

Do your homework. Check and see as much as you can learn about the path that you’re trying to do down. Find out what others have done in the area, whatever that is. See if you have the wherewithal to stay with it for like 5 years with no profit. (R5) One encouraged budding entrepreneurs to do something that is helpful toward society.

“To do something that is beneficial, that people need, and that will help make things better in the

world.” (R4) Ten percent indicated the need to adapt and to expect failure.

Be prepared to adapt and fail. It didn’t work this time. Location, timing, working capital, the area they are in, the product, and what they are trying to do. That’s a tough one. It’s growing slowly. If you had that extra working capital, maybe another year, you may cross the bridge, by thinking this, I’ve put a lot of; I’m not getting the return. It may not happen in six months, but after three years, you’re still struggling, that’s a tough one. Do I keep putting money in or do I think of something else to do. That’s one of the hardest things. I need to figure out how to make it work or analyze why it did not work. I think that’s the hardest thing for people to do. If you’re able to look at it objectively and say, be honest and accept the criticism. When do I stop? It’s unfortunate for some people they’ve done something and it doesn’t work. How do you recover from that? Sometimes you don’t. That’s a tough one. Chances are this is a big chunk of someone’s life. Minimize that risk to a degree. I think that’s where I’ll take the risk but I’ll be smart on how I’ll take the risk. But, if you’re going to move in, you’re going to buy a piece of property. But if the business fails, the property appreciates in value. I may actually make, recoup my money by selling the property, I can minimize it. (R7)

One suggested a serious conversation about risk and risk tolerance,

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I’ve probably discouraged and convinced more people than I haven’t that they’re headed down a bad path, which is probably awkward because I could have probably turned it into revenue for my business if I had pumped up their egos a little bit or something. But, that wasn’t the answer in those cases. I think my advice is two-fold. A lot of it has to do with where they are in certain stages of their life. I mean, while I’m willing to take risks and risk losing the business and all of those types of things, I’m not willing to take risks that are so substantial that my wife and four kids aren’t going to have dinner tomorrow. Do I think it would be easier to be a risk-taking entrepreneur if I were 20 years old, not married, no kids, sure. I can live in a tent. Now that I’m older, I have responsibilities and that type of thing. A lot of what I coach people on depending on where you are in your life, what phase of your life you’re in, you can be more aggressive or less aggressive as an entrepreneur. The fact is, certain businesses require certain levels of aggressiveness to be successful. So, it’s difficult to talk with someone about a blanket statement of how to become an entrepreneur. Usually it’s not that black and white. There are a lot of people who are running around saying they want to be in business, but frequently the root cause of whether or not they will be successful or not is the business they pick. It is about the individual, also, but I mean, the greatest entrepreneur in the world goes out on a limb with a sucker idea isn’t going to be successful. At the same time, really bad entrepreneurs, bad business people have somehow latched together enough things to be successful to make a lot of money on great ideas or great products or great markets or something like that. So, that’s the kind of conversations I have with people. The advice to people who are thinking about entrepreneurship or getting into business for themselves, it has to be, a conversation about risk and risk tolerance…So, risk and risk tolerance and then they need to know what they’re in for in terms of work, right? We’ve all seen the ads on the Internet and everything else, you know, make $20,000 before noon at home in your underwear. That’s fantasyland. I work over 100 hours a week. People have to know that’s what they’re getting into. (R3)

The remaining respondent was optimistic and suggested anyone can do it if he or she is

prepared to work hard.

I think anyone can do it and certainly encourage people to do it. I think you do have to have a sort of personality that is willing to be somewhat isolated because a lot of times you’re working on your own by yourself. You’re not in a big corporate situation where you have colleagues. That was a thing I missed a lot, not having colleagues to talk with. And no other business owner has exactly the same situation. So, there’s a certain amount of loneliness in it, particularly in the beginning. I think people need to be sure that they can tolerate that well. (R10)

Another point made by a participant who was married,

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If you’re married, that’s another big thing, a lot of marriages collapse or fall apart over businesses; sometimes they do work out. I think the spouse has a tough time understanding the commitment to the business. I think you have to have a spouse; my wife’s very conservative. She’s not a risk taker. I think when I proposed this she thought, oh, my god. Now that it’s up and running, it’s successful, it’s full of prospective, but I think it’s willing to go along, but also willing to say also, whoa. No, it doesn’t always. But if you don’t try, it’s sort of like, if you don’t ask, you’re never going to know. What have you got to lose? Talking to people; having something to support them. A partner, spouse, to understand, willingness to take a risk can be very scary, but also behind this can be the benefits. A lot of people never have their own business. They don’t understand. Do homework, research. I think a lot of that pays off. (R7)

Summary

In this chapter, quantitative and qualitative data were analyzed and presented in an effort

to answer the two following research questions:

1. Are there differences in men and women who choose to become entrepreneurs?

2. Are there differences in how men and women measure entrepreneurial success?

Interview findings were compared to quantitative results and summarized in three areas:

(a) Demographics that included education, years to profitability, previous experience, and reason

to become an entrepreneur; (b) EQ and managerial characteristics that included adaptability, risk

tolerance, extroversion v. introversion, and creativity; (c) entrepreneurial success that included

customer satisfaction, entrepreneur success, personal satisfaction, and advice.

Chapter 5 provides a summary of the study, discussion, implications of findings,

limitations of the study, and concluding remarks.

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CHAPTER 5: DISCUSSION, CONCLUSIONS, AND RECOMMENDATIONS

Summary of Study

Gender differences exist between how males and females approach entrepreneurship.

Men and women are both significantly influenced by the experiences they have personally and

professionally, as well as in-born personality preferences, and both of these factors may affect

their behavior and motivation according to gender (Ridgeway & Smith-Lovin, 1999). The

purpose of this study, therefore, was to examine the effects of these experiences and to assess the

personality characteristics, demographic variables, and views about success that distinguish male

from female entrepreneurs.

The research questions addressed in this study were:

3. Are there differences in men and women who choose to become entrepreneurs?

4. Are there differences in how men and women measure entrepreneurial success?

5. Are there differences in the education level of men and women entrepreneurs?

As indicated in Chapter 4, the quantitative and qualitative results provided mixed support

for the research questions. Data revealed differences in men and women entrepreneurs, no

differences in how men and women measured entrepreneurial success, and partial support for

differences in education level of men and women entrepreneurs.

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Discussion

This mixed methodology study explored the gender differences in entrepreneurial

behavior between male and female small business owners in two Midwestern counties in the

United States. Quantitative research methodologies were used to test the hypotheses proposed in

this study. The twelve questions posed during the interview phase provided qualitative data

relating to entrepreneurs’ responses for research questions 1 and 2. The goal was twofold: (a) to

see if the qualitative sample was representative of the quantitative sample and (b) to provide

deeper investigation of the lives of people who chose entrepreneurship as a career. Following is a

discussion of the findings for the research questions and hypotheses in this study.

Research question 1 is: Are there differences in men and women who choose to become

entrepreneurs? What an entrepreneur chooses to do with his/her life is motivated by a unique

bundle of wants and needs, some of which might seem inconsistent with one another, and many

of which might compete for priority at different times in life. An entrepreneur’s motives are

largely shaped by personal characteristics (talents, interests), deeply held beliefs, family

influences and social role models, and the cultural context. The decision to become an

entrepreneur is never as simple as “wanting the money” or “seeking fame” or “building a better

world.” The act of starting a business is usually the result of a combination of personal motives

or drives that an entrepreneur tries to satisfy through the business (Brush, 1992; Vesper, 1990).

An entrepreneur’s commitment to the business is determined by the priorities he/she sets among

many competing motivators. For the purpose of this study, entrepreneurs were defined as male

and female business owners who started their businesses from the ground up and have been in

business for at least 5 years.

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EQ Scales and Managerial Characteristics

The findings from the quantitative results suggest that on the 11 EQ scales by gender

(males v. females), males scored significantly higher on adaptability, risk tolerance, time

management, extroversion, and thinking, compared to females. Females scored significantly

higher on planning, goal orientation, intuition, and perceiving, compared to males. No other

significant differences existed. This is a major contribution of the study because in prior phase

developments of the EQ, the categories studied were executives, self-employed, and individuals

working for others in varied professions. This study looked at both the importance and

differences between male and female entrepreneurs. While the EQ does measure some

personality and managerial characteristics, additional research is needed to determine more

tangible entrepreneurial success measures and the relationship between those measures and the

EQ scales. It also indicated the need for development in education and mentoring to close the

skills gap.

Adaptability. Adaptability in this study refers to whether the participants reached outside

of their immediate circle of friends and contacts to form new alliances and acquired needed

resources to accomplish business objectives. The quantitative study results were different from

the qualitative results. The quantitative findings indicated that females were more comfortable

with taking a low risk than were males. Males scored slightly higher than females, with a

moderate comfort level of risk-taking, and males were more comfortable with higher risk taking

than females, suggesting that they sought more resources outside their immediate friends and

family to accomplish business objectives. All of the participants in the qualitative study showed

high levels of adaptability for both males and females. Many male and female participants

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indicated having traditional alliances such as banks and friends, and some indicated local and

specialized networking contacts that were unique to their type of business.

Risk tolerance. This qualitative subsample had slightly different results from the

quantitative. Risk tolerance was measured on a scale from 1 to 10 with 1-3 being low risk, 4-6

being moderate risk, and 7-10 being high risk. Two female participants indicated they were

comfortable taking low risks, one was in the moderate range, and three were in the high-risk

range. Compared to males, one male indicated it depends on the decision to be made, none were

in the low risk range, one was in moderate risk range, and three were in the high-risk tolerance

range. Therefore, males were more risk tolerant than females. The quantitative results showed

that the female sample was more comfortable in the low risk range, followed by moderate risk,

and less comfortable making decisions in the high-risk tolerance range.

Extroversion versus introversion. The quantitative results for extroversion v. introversion

showed that males scored significantly higher on extroversion than did females. Five participants

from the qualitative study considered themselves extroverts; five considered themselves more

introverted. The participants who identified themselves as extroverts were people who enjoyed

being around other people and sought to build relationships with them. The participants who

identified themselves as introverts indicated that while they are mostly introverts outside of their

businesses, they find it necessary to become more extroverted when building relationships with

their customers.

Creative versus traditional. This subscale describes the manner in which the candidate

thinks about and acts upon new ideas. Creative entrepreneurs think and operate in an innovative

manner, implementing and promoting new ideas, new products, new markets, and new programs.

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Traditional entrepreneurs prefer to rely on proven solutions, feeling secure with the traditional

business and business systems that have worked in the past.

Participants have a score on both the creative and traditional scale with a higher score

indicating that the participant is either more creative or more traditional. The lower the score, the

less creative or less traditional is the participant. The qualitative results for creative females and

males mirror one another. Results on the traditional scores indicate that females score slightly

higher than males. Both male and female samples indicated a preference for both creative and

traditional, depending on what was needed in the best interest of the business. Therefore, both

males and females have low scores on creative and traditional separately; however, the highest

scores for both female and male samples are for the preferences of both creative and traditional.

The quantitative results mirror a moderate level for both male and female samples on both

creative and traditional levels. Thus, a combination of both creative and traditional traits is

important in balancing a successful business.

A longitudinal study that assessed the relationship between psychological characteristics

and business organizing activities, using measures of achievement, motivation, locus of control,

risk perception, and creativity, found that the most significant difference between men and

women entrepreneurs was found in scores on innovation and achievement/activity (Shaver,

Gartner, Gatewood, & Vos, 1996). These results showed that female entrepreneurs and managers

were more likely to take risks than their male counterparts. Bellu (1993) suggested that women

may be more willing to accept entrepreneurial risk because they face a more hostile and

prejudicial work environment.

Numerous studies have shown that there are no differences between entrepreneurial men

and women in personality dimensions, including achievement, motivation, autonomy,

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persistence, aggressiveness, independence, (non-) conformity, goal orientation, leadership, and

risk-taking propensity. A few differences in how men and women manage their businesses have

emerged, however. Compared to men, female entrepreneurs are more adaptive, more socially

aware, have wider experience in different business areas, delegate more, and engage in longer-

term planning (Buttner, 1993). The findings in this study do not support the findings from

previous research indicating that women are more comfortable with risk taking than men.

The quantitative results suggest that females scored significantly higher on planning, goal

orientation, intuition, and perceiving, compared to males. Contrary to the stereotypical

conceptions of female behavior that is manifested in the leadership styles, Lipman-Blumen

(1996) argued that these female leaders can be even more task-oriented that their male

counterparts, a behavioral characteristic that is typically related to men. Furthermore, women’s

predisposition towards accomplishing tasks by forging relationships also proved to be unfounded

in Lipman-Blumen’s research.

Research question 2 asks: Are there differences in how men and women measure

entrepreneurial success?

Entrepreneurial Success

The findings in this study strongly indicate that the quantitative results from the first set

of variables, EQ, are not related to the second set of variables, entrepreneurial success.

Therefore, there are no significant relationships between the 11 EQ scales and 6 measures of

entrepreneurial success (males and females).

The literature review suggested that the important yet often neglected issue to consider in

evaluating studies of successful entrepreneurs is whether the measure of successful performance

is equally applicable and relevant to all of the participants in the study. Far too often, the studies

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examined take the linkage between success and performance for granted, rather than submitting

them to critical rigorous interrogation. This is most apparent in a consideration of the distinction

between a performance measure such as venture survival and financial measures such as

profitability or sales. Numerous studies find that the determinants of firm survival are different

from the determinants of firm profitability (Bosma, van Praag, Thurik, & de Wit, 2004; Gimeno,

Folta, Cooper, & Woo, 1997) and that, on average, entrepreneurs could earn more income in paid

employment than they earn from entrepreneurial activity (Hamilton 2000). This suggests that the

non-pecuniary rewards associated with entrepreneurial activity lead some entrepreneurs to persist

in entrepreneurship despite inferior economic returns.

The qualitative results support previous studies that financial reward accounted for only a

small percentage of how males and females measure entrepreneurial success. Recognition from

others accounted for the highest percentage among the females, followed by passion for her

business. Male responses indicated a tie between financial rewards, recognition, challenges, and

passion. Males scored higher on building relationships with their customers than did females.

These results tend to agree with data from the National Foundation for Women Business

Owners. Romano (1994) probed how entrepreneurs define and achieve success. The findings

showed specific gender differences in definitions of success. Women reported that success was

having control over their own destinies, building ongoing relationships with clients, and doing

something fulfilling. Men described success in terms of achieving goals (Romano, 1994).

However, another study reported that women chose self-fulfillment and goal achievement as

primary measures of success rather than financial profitability (Buttner & Moore, 1997). Still

other found that women business owners under-performed on both survival and growth

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dimensions, which raised the critical question of whether initial goals for the business influenced

financial outcomes (Srinivasan, Woo, & Cooper, 1994).

Customer satisfaction. The quantitative results for customer satisfaction were slightly

different from the qualitative samples. Quantitative results indicated that both male and female

entrepreneurs used repeat sales, referrals, verbally ask, profitability, and surveys to measure

customer satisfaction. The qualitative results of this study indicated that participants measured

customer satisfaction by (in descending order): asking them, repeat visits, word-of-mouth,

referrals, and surveys.

Loyalty is an individual’s overall attachment to a product, service, brand, or organization

(Hallowell, 1996). In the service context, customer loyalty is a customer’s disposition in terms of

preferences given to a particular service provider, or his/her intentions to act favorably towards

the provider (Gremler & Brown 1996; Jain, Pinson, & Malhotra 1987). Customer loyalty could

manifest itself in a number of ways: for example, willingness to recommend a service provider to

other consumers, commitment to repeatedly patronize a preferred service provider, and

willingness to pay a premium price (Fornell 1992; Raju, Srinivasan & Lal 1990; Zeithaml, Berry,

& Parasuraman, 1996). Customers loyal to a service provider will likely increase the scale and/or

scope of their relationship with the provider (Yi, 1990). In a study of two dozen service

businesses, Bain & Co. found that a 5% improvement in customer retention could lead to a profit

increase of 25% to 80% (Reichheld & Sasser, 1990). The results of enhanced customer loyalty in

service firms are increased revenue, reduced customer acquisition costs, and lower costs of

serving repeat purchasers, leading to greater profitability (Reichheld 1993; Reichheld & Sasser,

1990). Understanding how various factors relate to customer loyalty can help entrepreneurs

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monitor and enhance customer satisfaction effectively through initiatives involving those factors

that affect customer loyalty directly and significantly.

Entrepreneurial success. The results for male and female samples differed slightly.

Recognition was most important for females, followed by passion for her business. Males

indicated an equal preference for: financial rewards, recognition, challenges, and passion.

Building relationships with customers was higher for males than females. Financial rewards were

mirrored for male and female samples, indicating a lower level of importance. The qualitative

results indicated (in descending order): loving what you do, recognition of doing something well,

financial rewards, proving it can be done; and there is always more to do.

Personal satisfaction. Of all the results in this study, personal satisfaction had surprising

results. The reasons for the surprise are because the choices given on the quantitative survey

were choices that the literature review indicated were important. However, during the face-to-

face interviews when participants were able to freely offer their preferences, none of the

participants selected any of the options in the quantitative survey. Quantitative results indicated

the same choices for males and females (in descending order): pride in quality, being the boss,

ability to set hours, income potential, and time off when desired. The qualitative results are given

in descending order: interaction with people, seeing a change, enjoyment of competing, ability of

having control of their lives.

Helms (1997) identified several groups of female entrepreneurs and their reasons for

pursuing entrepreneurship as a career. The first group is usually frustrated with their inability to

shatter the glass ceiling and circumvent other types of gender discrimination. For them, the

personal freedom associated with self-employment is a critical motivating factor. Clearly, instead

of vying for recognition and promotion to leadership positions by male business owners, these

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women have decided to carve a niche for themselves in the business world by creating their own

business and business culture (Pentilla, 2001).

Helms (1997) described a second group of female entrepreneurs who have turned to

entrepreneurship due to their experiences with a dramatic event such as a massive lay-off,

downsizing, or the death of a family member. From their perspective, their own business will

offer them and their family a greater measure of economic security in the unstable job

environment that no longer guarantees job security or retirement funds. The final group of

female entrepreneurs has turned to entrepreneurship in order to prove that they are able to

succeed at a professional career.

Helms argued in her paper that men and women have different reasons for entering

business and that women have “internal-stable reasons (“I want to be my own boss”), while men

have external-stable reasons (“I saw a terrific market opportunity”) (Helms, 1997, p. 17). In

contrast, Weiler and Bernasek stated the reasons as a preferable alternative to working in a

discriminatory labor market or corporation and that self-fulfillment (rather than profits) is the

most significant measure of success for women entrepreneurs. Similar to Weiler and Bernasek’s

theory, Buttner and Moore argued that women become entrepreneurs due to blocks in career

advancement as a result of gender discrimination, resulting in the popular term glass-ceiling

effect (women cannot access the highest levels in an organization or corporation due to their

gender) (Nguyen, 2005).

Reason to become an entrepreneur. Participants were asked the main reason they chose

to become an entrepreneur. This question was only in the qualitative study. Results indicated the

three top reasons for becoming an entrepreneur are not satisfied working for others, success as an

entrepreneur when younger, and a need in the community was not met. The qualitative study

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varied significantly from the quantitative results. According to Helms (1997), female

entrepreneurs, unlike their male counterparts who tend to inherit family businesses, typically

establish their own businesses for a variety of personal reasons, thus making them a

heterogeneous group.

Advice for people considering entrepreneurship. This question was asked only in the

qualitative part of the study. The purpose of asking this question was to find out both the positive

and negative aspects of owning a business. Advice given to others considering entrepreneurship

included being passionate about your business, knowing what your risk tolerance level is, being

prepared to adapt and fail, doing something that would benefit others, giving the business as

much time as it takes, researching your product/service/idea and learning as much as you can

about it prior to opening your business, and being able to succeed if you are willing to do

whatever it takes to become successful.

Question 3 is: Are there differences in the education level of men and women

entrepreneurs? The findings in this study indicated that when controlling for years in business,

previous experience, current employees, family business, and age at first business, there is no

significant difference between males and females on the 6 measures of entrepreneurial success

by education levels. These results contradict the findings of Van de Sluis, van Praag, and

Vijerberg’s (2004) comprehensive meta-analysis of 94 studies that included estimates of the

relationship between schooling and entrepreneurial entry and performance. They concluded that

schooling, irrespective of how it is measured, significantly and positively affects entrepreneurial

performance. For example, Gimeno et al., (1997) found that relatively highly educated

entrepreneurs take more money out of their ventures (presumably because there is more to take

out) and are less likely to exit entrepreneurship.

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A significant difference was revealed for males on annual revenue by education level;

however, paired comparisons did not reveal any significant difference between the education

level. No other significant mean differences were revealed on the 6 measures of entrepreneurial

success by education level.

Controlling for years in business, previous experience, current employees, family

business, and age at first business, a significant difference exists for males on the 6 measures of

entrepreneurial success by education level. When controlling for variables, the means are

adjusted for the covariates and any effect that they might have is portioned out of the equation.

This is done to assess the difference due only to education level and to remove the interference

by the other variables.

A significant difference exists on sales growth by education level; participants with an

associate’s degree had higher means on sales growth, compared to participants with a bachelor’s

degree. This suggests that on sales growth, the mean for associate’s degree was statistically

higher than the mean for bachelor’s degree. No other significant differences existed on the 6

measures of entrepreneurial success by education levels.

The literature review indicated, as van der Sluis, van Praag, and Vijverberg (2004)

pointed out, that the interpretation of the estimated effects of schooling on entrepreneurial

performance was ambiguous. In particular, it was not clear from existing studies whether this

effect represented the impact of investments in schooling per se on entrepreneurial performance,

or whether it reflected the effects of ability. Differences in schooling levels are shaped by

individual choices to continue schooling, which depend in part on ability. The fact that those

with higher education appear to do better in entrepreneurship may therefore reflect the fact that

they are, on average, more able. It is not clear that schooling per se improves entrepreneurial

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performance. Furthermore, it should be noted that many of the studies that examined the impact

of schooling looked at its effects on individual income, which is an imperfect measure of the

performance of new ventures, since entrepreneurs can choose their income levels.

No significant difference existed on the 6 measures of entrepreneurial success for

females. This suggests that the means on the 6 measures of entrepreneurial success were not

statistically different for each of the education levels for the female participants in the study.

Education. The main way in which the qualitative sample differed from the quantitative

sample was that participants in the qualitative study were more highly educated than the

quantitative sample. An interesting item to note is that both McLean and Champaign counties

have universities within a reasonable driving distance. Some researchers have suggested the

appeal of self-employment and launching a new business has resulted from continued uncertainty

about the economy, corporate and government downsizing, and a declining number of corporate

recruiters on college campuses (Moore, 2002). Moreover, members of Generation X do not

perceive launching a business as a risky career path. Described as “the most entrepreneurial

generation in history” (Zimmerer & Scarborough, 2002, p. 15), they account for approximately

70% of new business start-ups (Bagby, 1998; Phillips, 1999).

Previous experience. Entrepreneurs were asked if they had previous experience in the

industry that they had chosen as their business. The quantitative sample mirrored the qualitative

sample in previous industry experience before starting his/her business, indicating that most of

the participants had prior experience.

Most entrepreneurs in this study indicated they worked in a business owned by someone

else prior to opening their own business. The characteristics of business owners (CBO) contain

information on whether the owner previously worked “for a business whose goods/service(s)

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were similar to those provided by this business” (U.S. Census Bureau, 1997, C-4). This type of

work experience undoubtedly provides opportunities for acquiring job- or industry-specific

business human capital in addition to more general business human capital. Slightly more than

half of all small business owners reported working in a similar business prior to starting their

own (Fairlie & Robb, 2007). Most entrepreneurs (n = 64) had parents who owned businesses; 43

did not. An important finding in the literature on self-employment is that the probability of self-

employment is two to three times higher among the children of business owners than among the

children of non-business owners (Dunn & Holtz-Eakin 2000; Fairlie, 1999; Hout & Rosen 2000;

Lentz & Laband 1990). Twenty-seven of the participants worked in their parents’ business, 15

did not. Another interesting finding is that more than half of all business owners who reported

having a self-employed family member did not work for that family member’s business. This

finding suggests that intergenerational links in self-employment are not generally due to the

acquisition of general and specific business human capital and that similarities across family

members in entrepreneurial preferences may explain part of the relationship (Fairlie & Robb,

2007).

Years to profitability. The study sought a realistic understanding of how long it would

take a business to become profitable after it was started from the ground up in this geographic

area. This particular subsample differed slightly for the quantitative sample and the qualitative

sample (see Chapter 4). In the quantitative sample, the most frequent response was 1-2 years,

followed by less than 1 year, while the qualitative sample participants reported that their profits

began in less than 1 year, followed by a three-way tie for 1-2 years, 3-4 years, and 5-6 years. One

participant indicated his/her business was not yet profitable, although the IRS indicated that

his/her business was profitable.

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Participants’ annual revenues reported as most frequent were tied between $100,001-

$250,000 and $250,001-$500,000, followed by $500,001-$1,000,000. Participants reported

annual profits most frequently as $10,001-$50,000, followed by less than $10,000, then $50,001-

$100,000. Sales growth was reported most frequently at 0%-5%, followed by 6%-10%. Most of

the participants reported they had employees. Number of employees in the past 5 years was

reported most frequently as 0–5, followed by 6–10.

Estimates from the CBO indicate that nearly a quarter of small businesses existing in

1992 were not operating by 1996, and slightly more than 30% of businesses reported a net profit

of at least $10,000. Small firms also hired 1.77 employees on average, with only 21.3% hiring

any employees at all. Finally, small businesses had mean sales of $212,791 in 1992 (Fairlie &

Robb, 2007).

Implications of the Findings

The findings from the study have implications for individuals who choose

entrepreneurship as a career. While this study provided some of the characteristics desirable to

become a successful entrepreneur, it is not all-inclusive. Entrepreneurs need to ask questions

such as “How do I determine my strengths and weaknesses in running a business? How do I hire

experts in areas where I am weak?” Recognizing that no one has excellent abilities in all business

skills areas, entrepreneurs need to be prepared to compensate for deficiencies or weaknesses in

areas that are important to his/her business. An entrepreneur may need to rely on experts or

professionals to complement personal skills. The best sources of recommendations for these

outside experts are personal contacts, bankers, business associates, or board members. In

addition to hiring an expert, another way to make up for deficiencies is through self-help

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methods such as continuing education, mini-courses, or seminars sponsored by trade

associations.

By inviting experts to serve on the board of the new business, entrepreneurs can ensure

their commitment and interest in the business. Experts on the board will often be valuable in

providing network opportunities, assisting with financing, and offering objective appraisals about

the business.

Limitations of the Study

This mixed methodology study was limited to 110 participants within the Illinois counties

of McLean and Champaign. The purpose of this study was to examine the effects of the

experiences and to assess the personality characteristics that distinguish male from female

entrepreneurs. The findings from this study may or may not be generalized to all entrepreneurs.

The study was limited by the use of demographic surveys, the EQ instrument, and

structured face-to-face interviews, due to the extensive amount time required to complete the

research and the financial constraints of the researcher. The researcher made a conscious effort to

identify and reflect on possible sources of bias and to project an air of neutrality during the

interviews; however, the fact that the researcher is a woman may have inadvertently influenced

the participants to respond in a certain manner.

Another potential limitation is that the participants qualified themselves as candidates for

the study after the researcher explained the qualifications needed for the study. Additionally, the

participants may have been subject to self-report bias, in which people respond to questions in

the way they believe is socially desirable (Moorman & Podsakoff, 1992; Zerbe & Paulhus,

1987).

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Recommendations for Future Research

This study explored the nature of the gender differences among individuals who start

entrepreneurial businesses and proceeded by examining the traits and characteristics of

successful new business developers. There are related topics that future researchers may consider

for further study.

1. Should potential entrepreneurs be “qualified” before opening a business to reduce

the failure of the business? If so, what type of qualification test would be

required?

2. Can a better scale be defined that would make it easier to identify entrepreneurial

success?

3. How can more effective networking opportunities be developed in the

community?

4. Should career fairs include entrepreneurship as a potential career?

5. Should local, state, and federal governments get involved in developing

entrepreneurs?

It is important to raise these issues early and to present them as choices rather than

destiny. The use of teaching materials that feature women entrepreneurs in a greater variety of

industries and with high growth aspirations can expand the horizons and stimulate aspirations of

women students while broadening the perspectives of their male colleagues who are likely to be

their future bankers, investors, employees, and spouses. Multiple ways to expand business

experiences can also be considered, including development of a mentorship program at the junior

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high level, a small business center in conjunction with workplace development centers with the

guidance of an expert panel that includes successful entrepreneurs from the community, small

business bankers, and a curriculum of basic business management courses that are specific to

each small business owner. Training programs to address specific tasks and skills can result in

not only increased expertise, but also enhanced levels of self-confidence. A broader education

can also help young women understand their unique situation regarding historical, economic,

ethnic, legal, and religious contexts (Oppedisano, 2003).

Conclusions

This exploration of the gender differences of entrepreneurs indicates there are differences

between males and females who choose entrepreneurship as a career. It should be clear that those

individuals who are considering entrepreneurship as a career should not be concerned if they do

not possess all the characteristics. One of the first decisions that should be made is if they are

ready to change their present career and lifestyle. This decision may be made for them if they are

fired, downsized, or move to a new location because of a spouse’s new job. They may be

motivated to make this decision by job frustration or by lack of advancement opportunity,

pursuing the dream of becoming a business owner, or they may have recognized a market

opportunity.

The second decision that needs to be made is to determine that an entrepreneurial career

is both attractive and practical. This decision involves assessment of personal feelings on control,

independence, and risk tolerance.

A common concern about potential entrepreneurs is whether they will be able to sustain

enough drive and energy to create and manage a new business. Are they driven by an inner need

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to succeed and win? Will they have the courage to set aside personal feelings and do what is in

the best interest of the business?

Closely related to the feeling of control is the need for independence. A potential

entrepreneur should consider whether he/she is the type of person who needs to do things in

his/her own way and time. As an entrepreneur, are you self-motivated and willing to do

whatever it takes to get the job completed on time and have pride in doing the job well?

To acquire independence, an entrepreneur must be willing to undertake a certain amount

of risk. Each potential entrepreneur should assess his/her risk-taking behavior. Depending on the

level of risk associated with the decision, an entrepreneur must be comfortable with his/her

decision.

While a potential entrepreneur does not need to be totally self-directed, or a totally

independent risk-taker, an awareness of individual characteristics is needed before deciding on

entrepreneurship as a career. Each individual has strengths and an opportunity to develop skills.

While the data for education were at best ambiguous, unequivocal, intuitively contradictory,

becoming a successful entrepreneur has more to do with assertiveness, drive, energy,

independence, and developing networks. Successful entrepreneurship is a characteristic that will

be unique to each individual, not a general mix.

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