March 29 is National Mom & Pop Business Owners Day…a great opportunity to discuss how entrepreneurs develop their business acumen. Do they inherit entrepreneurial genes, or is it the school of hard knocks?
If your kids beg to start a lemonade stand this summer, don’t take it lightly. Consider how many may become small business owners.
Though a small business may be highly profitable, it likely doesn’t employ a large staff today. Almost 8 out of 10 American companies have fewer than 10 workers, according to U.S. Small Business Administration (SBA) data released in 2016. That’s a lot of mom-and-pop shops…about 4.3 million actually.
Some of these entrepreneurs fail after a couple of years, but others really flourish. Some have Main Street storefronts, but the lion’s share are on-line or home-based businesses. They’re consultants, crafters, bloggers, inventors. Many often run the business by themselves, without full-time help.
Passion, motivation, creativity, work ethic?
There must be some attraction to working a side hustle since plenty of folks, both young and old, hang out their shingle. Do entrepreneurs make more money, live a better lifestyle, have more career satisfaction? Or, do they merely observe their parents’ business success and follow suit? Are kids born with traits that propel them into starting a business?
Over the past few years Gallup has studied 2,500 entrepreneurs and concluded that having higher levels of entrepreneurial talent significantly increase the odds of business success. Nicos Nicolaou of Cass Business School, City University London, and Scott Shane of Case Western Reserve University found that entrepreneurial tendencies are between 37% and 48% genetic.
Entrepreneurs with a natural gift for things like spotting opportunity find it easiest to succeed, but others compensate for a lack of inborn talent through efforts like working with coaches and getting technical assistance, according to the Gallup data. Coaches or mentors can’t teach their students to change their aversion to risk or to recognize business opportunities. But having such innate talents don’t necessarily override hard work and practice.
Is 2017 the year to start?
If that summer lemonade stand allows you to see your kids’ potential business abilities, you might want to look at the coming trends for startups. Wendy Guillies, President and CEO for the Ewing Marion Kauffman Foundation in Kansas City, reported in February about the new Kauffman Index of Entrepreneurship series that breaks down trends.
“Startup activity is up. More people are becoming entrepreneurs and creating more opportunity-driven businesses than in the recent past,” Guillies said, adding that “growth is improving, too. New companies are gaining more traction and reaching scale at higher rates than in recent years. And Main Street is nearing a two-decade high. More businesses are surviving their first five years of operation.”