Partner, vCFO and Co-host Katina Peters joins Host, Megan Spicer on this episode. We are discussing personality traits of an entrepreneur, challenges for small business owners when it comes to formal plans and the science behind it all. If you don’t have a formal plan for your business, or have been putting it on the back burner, this episode is for you.
What we cover in this episode:
- 03:00 – Why are formal business plans ignored?
- 05:10 – Personality traits of an entrepreneur
- 12:20 – The balance between personalities and business
- 17:03 – Learning to be systematic
Why are formal business plans ignored?
Many businesses create formal plans or recruit experts to create formal plans at the beginning, but then fall off track. So why does this happen? Although there are many reasons this could happen or has happened to you and your business, Katina talks about a major trending factor that leads to ignoring formal business plans and how this can lead to challenges for small business owners.
“A lot of it is time. People think they don’t have the time to do it. Knowledge of know-how, how to really go about doing those check-ins as well. I think sometimes we also have that Ostrich thing; like I don’t wanna know what’s not working, I don’t wanna know how bad it is, if it is bad… It can be difficult for our egos, it can be difficult for difficult conversations with our team if we have a team. So yeah, I’ve seen kind of the gamut of things.”
Like most things we put off, sometimes it isn’t too late to start picking them up again. Katina has seen many owners ignore the plans or not have one and states, “We don’t have to look at those failures as we talked about in the past… it’s really that opportunity to figure out a better way to reconfigure, to do whatever we need to do to move forward in a better way.”
Personality traits of an entrepreneur
There was a study done by Harvard Business School about personality traits of an entrepreneur; and one of the finds linked entrepreneurship to the personality traits of confidence and optimism. Being able to understand and balance these traits in business can help with functioning and being systematically sound, leading to following formal business plans. Understanding these can definitely help find the reason why a business, or yourself, doesn’t tend to follow the plans put in place and give a deeper reasoning which can help with a solution.
We have all heard the saying that too much of anything is a bad thing. This goes for confidence and optimism as well. Business owner personality traits can vary from one extreme to the other, but there has to be a good balance.
“In the study… that specifically talks about having those high levels of confidence, which definitely triggers a lot of entrepreneurs to even want to become an entrepreneur… They need to be confident that they’re able to do it and to have the optimism that they can do it to become an entrepreneur.”
“But it can also lead to maybe being a little too overconfident; maybe not seeking advice or listening to advice that people are giving because they kind of can overestimate maybe their abilities, their gut feels… Fairly often or often enough with people with that type of personality that it caused them to have a little more difficulties in running their businesses and making the best decisions there.”
There are many challenges for small businesses owners, one being business owner personality traits. The study enlightens you into the mind of optimists and Megan and Katina talk about what being optimistic can look like for a business owner.
“I think the same thing goes for optimism… We need to have the goal, we need to have the dream, we need to have the optimism, right, to go there. But we also have to have the realism of how to get there and to monitor ourselves along the way as well.”
The balance between personalities and business
Balancing the personality traits of an entrepreneur can be difficult. They almost seem conflicting at times and if not geared towards the right goal, these traits can be detrimental to the end goal, which is the growth of your business.
Katina talks about some actions she has seen that help with this, “It’s important that you have a system that you’re following for planning strategically for your business and monitoring your business, making changes and those kinds of things. So I think having a real business plan with a realistic budget and a forecast.”
Asking and answering the necessary questions that are needed to run a successful business and forecast a successful business can help. Say you have a goal to go from $100,000 in revenue to 2 million next year. Katina states, “Well that’s great, but who wouldn’t want that? Right? …How are we actually getting there? Like how many sales do we need? How many salespeople do we need? … Is that realistic? So we need to make sure that we’re setting those dreams up in a way that we’re gonna be able to achieve them or get very close right, that’s the goal.” You want to make sure you keep your dream in mind and set those “stretch goals”, while also staying “down to Earth” for the sake of the actual and factual part of your business.
Learning to be systematic
“If we’re systematically doing it, we’re forcing it into our schedule. We’re making ourselves look at it. We’re not sticking our heads in the ground and just ignoring it… If they take the time to really stop and think about it… Coming back to just making sure we’re doing those things and then making adjustments, making a change to the plan…So we need to stop, look at the metrics, realize where things are breaking down so that we can do some more experimentation, fix those areas.”
Learning to find a balance between systems and dreaming can put you on the right track. It will not always be easy to do, and, most of the time it will be hard, making it one of the challenges for small business owners. Knowing this going into it can help prepare you, so you can find the support you need to move forward with a plan and follow or reevaluate that plan moving forward.
Not everyone fits in a box
We understand and want to address that not all business owners fit this exact profile. You may not have the confidence and optimism that pushes you to ignore advice from experts. Maybe it was your strong desire for accomplishment or internal locus of control that pushed you to start your business. There are many factors that push us toward entrepreneurship, but addressing some of these more common traits and tackling how we can overcome the downfalls is a good place to start.
There are so many different personality traits of an entrepreneur; which is why we have so many wonderfully different small businesses.If you do not fit into one of the categories in this study, that does not mean you are not entrepreneur material. If you can implement balance, discipline and structure, your business will go far.