| I've read this thread with some interest -- given that my specialty is management and organisational theory. I've also done a bit of work developing business plans for a couple of new enterprises (and will hopefully be off doing a couple more in a few weeks). I'm sort of going to skim over a bunch of issues.
One interesting study I read was based on a census of data on small business survival. They controlled for all sorts of variables (business age, location, legal and organisational structure, and industry), and then looked at the gender and racial differences. They used businesses owned by white males as the base line (they were the largest group), and compared other owners. They found:
1. Businesses owned by asian's performed better than those owned by whites.
2. Those owned by blacks and hispanics performed worse.
3. Those owned by women performed worse than those owned by men (except for black owned businesses, where this was reversed).
These results suggest that there are issues related to race. If you are not a white or asian male, you are going to find it harder to establish a small business.
Other studies have looked at the most common motivations for founding a small business. The most comprehensive I've seen is a UK studiy that found seven basic motivations: need for approval, need for independence, need for personal development, welfare considerations, perceived instrumentality of wealth, tax reductions and indirect benefits, and the desire to follow role models.
Interestingly, the same data was used to compare 'novice' and 'experienced' entrepreneurs -- those who had succeeded in the past were compared to those who had not. They found no difference, suggesting that past success in entrepreneurship does not contribute to future success. All of that hints at the idea that success in entrepreneurship is not something that can be adequately modelled or predicted -- something which my experience supports.
Taking these sorts of findings one step further, you see that the classical model of the entrepreneur as a driven, innovative risk-taker is not confirmed by looking at actual entrepreneurs. Some can be described this way, but other's cannot. The most common way to solve this is to develop typologies, usually based on the entrepreneur's motivations and management methods. A basic typology will seperate the entrepreneurs from the small business owners. Small business owners are focused on their business -- usually it's operations. Administrative tasks are kept to an absolute minimum and the motivation usually centres on intrinsic rewards (doing a job well) -- it is sometimes called the artisan mentality. The entrepreneurial type is generally focused on the growth of the business. They tend to delegate more readily and develop administrative structures to handle the expected growth. Motivation for the entrepreneur tends to be more extrinically based -- financial rewards and esteem of others through achievement are the main drives.
Another area is that the entrepreneurial demands of a business vary as it grows. The operational excellence of the small business owner is great when the business is small, but needs to be augmented by the delegation as the business grows. Formalising administrative processes and practices becomes more important as the number of staff gets larger. At the same time, large businesses require operational excellence and innovation to maintain their long-term survival; but the ways that these are manifest is quite different from how they are embodied in small businesses.
The final point is the focus on THE entrepreneur is generally something of a mis-representation. Successful start-ups are almost inevitably a combined effort of several people. The tendancy to associate entrepreneurship with flamboyance reinforces the myth of the solo entrepreneur. Vision is all nice and good, but requires structure to actually make it functional. William Blake wrote that reason is the circumference of energy. He was getting at this point: energy, without reason to organise and direct it, is either dangerous or useless. this balance, between energy (vision) and reason (structure or organisation), is the one that most entrepreneurs tend to trip over. |