Entrepreneurs more prone to taking risks are more likely to achieve success, according to new research.
The research, by Cranfield School of Management, that the relationship between the specific personality traits of entrepreneurs and the fortunes of their business.
Results back up the established belief that risk-takers are more likely to achieve the highest sales growth, but also shows that over confidence can harm their bottom line.
Researchers profiled the personality traits of 50 owner managers over a two year period and discovered that the most successful were more open to taking risks.
David Molian, co-director of CREDO, the School of Management’s Centre for Small Business Growth and Development, said: “The results may come as no surprise, but taking risk is no guarantee of growing profits. A crucial personality factor behind growing profitably seems to be confidence in your judgement, especially in areas outside specialist expertise.
"The correlation between confidence/over-confidence and profits is certainly news to us. It gives us an enhanced understanding of what drives financial performance, and an opportunity for owner-managers to reflect on their operating style.”
