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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.
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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.
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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
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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
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APPENDIX: ONLINE EQ SURVEY 113
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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
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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).
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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,
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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
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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.
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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.
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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
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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
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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
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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
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(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
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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
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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
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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
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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
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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.
30
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 -- --
43
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.
44
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
46
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.
52
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
100
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).
101
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
102
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
103
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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