Characteristics of successful entrepreneurs

An entrepreneur is someone who sets up and runs their own business. Doing this means they may accept financial risk, such as losing their own money if the business fails, and reputational risk, because people may judge them if it goes wrong. Successful entrepreneurs often share a set of characteristics, and each one helps in a different way.

The characteristics and how they help

Why a combination matters

Different situations call for different characteristics, so one on its own is rarely enough. Someone opening a small bike repair workshop might use creativity to dream up a collect-and-return service, negotiation to agree a fair rent on the unit, and determination to keep going when the first few months are quiet.

These characteristics can increase an entrepreneur's chance of success, but they do not guarantee it. A well-run business can still struggle because of a rival cutting prices, a supplier letting them down or customers simply not wanting the product, so skills raise the odds rather than settle the result.

Creativity is the ability to produce new ideas. For an entrepreneur, it means imagining fresh possibilities instead of simply copying what other businesses already do.

Creativity can help an entrepreneur generate ideas for products, branding, strategies and marketing. A product idea might be a new service or an improved version of an existing one. Branding covers the name, logo and overall feel of the business, while a strategy is a plan for reaching a goal, such as finding cheaper suppliers. Marketing is how the business tells customers about what it offers, such as a poster campaign or a social media post.

Why it matters across the business

An entrepreneur may run many or all parts of a business, especially when it is small. That means creative thinking is useful in lots of areas at once: improving a service, choosing a business name, planning a launch or finding a low-cost way to reach customers. Creative thinking also helps an entrepreneur solve problems and respond to opportunities. If a supplier raises prices or a new competitor opens nearby, a creative entrepreneur can think of alternatives rather than give up.

Worked example

Sam runs a weekend bike repair service from a trailer in a park. Instead of only fixing punctures, he creates a “family safety check” package. He gives the service a simple badge and posts short clips of common repairs on a local community page. When a nearby shop starts selling cheap repair kits, Sam responds by offering a free brake check with every repair. His creativity gives him a new product idea, a recognisable brand, a marketing plan and a way to respond to a competitor.

Innovation is finding new ways of doing things or creating new unique selling points (USPs). A USP is something that makes a business different from its competitors, so customers have a reason to choose it.

Innovation is more than having ideas. Creativity is generating ideas; innovation is putting those ideas into practice. For example, you might creatively imagine a bike repair service that travels to customers, but it only becomes innovation when you test the idea, set up booking and actually repair bikes at people's homes.

New products and marketing

An entrepreneur can innovate by developing a new product or service, or by using a new marketing strategy or channel. A new marketing channel can reach customers that a competitor is missing. For example, a small gardening business could offer a balcony plant health check and advertise it through a local allotment association's newsletter. The new service and the new way of reaching gardeners both help it stand out.

More efficient processes

Innovation can also improve internal processes, making operations more efficient or streamlined. This means the business uses less time, money or effort to get the same job done. For example, a mobile phone repair shop could use a simple online form that asks customers for their phone model and fault. Jobs are sorted before customers arrive, so staff spend less time asking questions and more time repairing. Efficiency can lower costs and improve customer service.

Standing out and growing

By offering something new or doing something in a better way, a business can stand out from competitors and grow. Customers may be attracted by the USP, and the business may win repeat sales or enter new markets. Innovation does not guarantee success, but it can give the business a stronger chance of competing.

Risk-taking is the willingness to take calculated risks rather than play safe. Playing safe keeps everything as it is, but a calculated risk can help a business grow and stand out — though it might also lose money.

Calculated, not careless

A calculated risk is a risk you have thought through first. You weigh up what could go wrong against what you could gain, and go ahead only when the reward is worth the chance of failure. Being reckless is different: it means acting without thinking about the consequences.

For example, a teenager selling handmade phone cases online has £150 saved. Instead of reordering the same designs, they spend £100 on a stall at a gaming event, after checking around 2,000 people are expected. If it works they gain dozens of customers; if not, they lose part of their savings but still have stock to sell online.

Some decisions will not succeed

Successful entrepreneurs accept that some decisions will not succeed. A new product might flop, but they treat that as a normal part of business rather than a reason to give up, so they try again. Risk-taking is not the same as determination: determination is carrying on despite setbacks, while risk-taking is accepting that a decision might not work out.

Why it can bring rewards

Risk-taking involves uncertainty, but a calculated risk can bring rewards such as higher sales, a new market or a stronger reputation. It also lets an enterprise do things differently from its rivals, giving it a competitive advantage — something that makes customers pick it over the competition. In a busy market full of similar businesses, the one prepared to try something new gets noticed.

Communication is the clear exchange of information and ideas. It runs in two directions: an entrepreneur sends messages out, and listens to the replies that come back.

Who an entrepreneur communicates with

• Colleagues and staff — briefing the team on a job and agreeing who does which task and when, so work is coordinated rather than repeated or missed.
• Customers — explaining what a product does, answering questions and sorting out complaints.
• Other stakeholders — suppliers, banks and investors all need to understand what the business wants from them.

Communication is not only speaking. It also covers written reports and statistics, marketing and advertising, body language, gestures and listening.

Good communication in practice

• Marketing and advertising — a clear description of a product in a poster or social media post helps customers see why they should buy it.
• Reports and statistics — sales figures set out neatly let an investor see at a glance that the business is growing.
• Body language and gestures — steady eye contact and calm listening during a pitch or a complaint make the entrepreneur seem trustworthy.

For example, a student running a weekend bike repair service writes a simple price list, posts a photo of a mended brake, and stays calm while a customer explains why a late repair annoyed them. The customer understands the delay and books again.

Why it helps the business succeed

A new product idea is only useful if the entrepreneur can share it clearly, both with the people who will make it and with the customers who will buy it. Good communication builds relationships, coordinates work so nothing is wasted, and persuades stakeholders to say yes — for instance, convincing a supplier to allow payment in 30 days.

Poor communication harms a business: a vague message leads to mistakes, wasted money, missed deadlines, lost customers and damaged relationships with people the business depends on.

Negotiation is a two-way discussion in which people put forward their views and work towards a deal that both sides are willing to accept. You explain what you need, listen to the other person and look for terms you can both agree on, aiming to reach an agreement rather than win an argument.

An entrepreneur may negotiate with many people. With customers, you might agree a discount for a large order. With suppliers, you might discuss price, delivery dates or payment terms. With banks, investors and loan companies, you might agree how much is borrowed and when it is repaid. With employees, you might settle pay, hours or working arrangements.

Why good negotiation helps

Good negotiation can obtain better terms, such as a lower price, a longer time to pay or a faster delivery. Better terms can lower your costs or free up cash, which helps you compete and increase profit. Negotiation also helps maintain good working relationships, because people are more willing to be flexible with someone who listens and keeps to what was agreed.

For example, you run a small business printing designs onto phone cases. A supplier quotes £2 per blank case for 50 cases. You explain that you can order 100 cases but need a lower price to keep your selling price competitive. After discussing it, the supplier agrees to £1.70 per case if you pay within seven days. You get better terms, and the supplier gets a larger order and prompt payment, so the working relationship stays positive.

Confidence is believing in what you do or sell. It is not arrogance. A confident entrepreneur trusts that their idea is worth trying, but still listens when something is not working.

Doing things differently and taking risks means stepping into the unknown, and confidence gives an entrepreneur the push to take that step. It is what makes you launch rather than delay. For example, if you set up a weekend dog-walking service, confidence helps you introduce yourself to owners, set your prices and ask a local pet shop to display your flyers. Without it, you might put off the launch or charge too little because you are afraid to ask.

Confidence also helps an entrepreneur:

• present ideas clearly to customers, banks or investors, so they understand and trust the plan;
• make decisions instead of putting them off, such as choosing a price or a supplier;
• persuade stakeholders to support the business, from a landlord to a first customer.

Entrepreneurs and their staff also need to be comfortable with changing their mind. If dog owners keep asking for early morning walks, a confident owner can change the timetable rather than defend the old one. Changing your mind when evidence shows a better way is a sign of confidence, not weakness, because it helps the business adapt and keep customers happy.

Determination is the drive, resilience and persistence an entrepreneur shows to keep working towards a business goal.

Setting up a business rarely goes smoothly. An entrepreneur may be turned down for a loan, lose a customer, have stock arrive late or find that a marketing idea does not work. Businesses face many hurdles and constant problems, so determination helps the entrepreneur deal with them one by one instead of giving up on the idea. Resilience helps them recover after a knock-back, and persistence keeps them taking the next step.

A worked example

Aisha makes and sells custom phone cases at weekend markets. Her first application for a stall is rejected because the organisers have no spaces left. A few weeks later, a batch of cases arrives with the wrong colour printing. Rather than stopping, she asks to join the waiting list, offers to share a stall with another trader and asks the supplier to replace the faulty batch. Her determination keeps the business moving forward instead of closing after two setbacks.

Determination does not mean refusing to change the plan. It means carrying on despite setbacks while still being willing to adjust how you reach the goal. If sharing the stall works well, Aisha could sell that way from then on, so determination can lead an entrepreneur to a better way of running the business.