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November 23, 2012

Entrepreneurs are inherently cautious, say psychologists

Small business owners are far more likely to have wary, prudent and deliberate characteristics than the general population. These are the somewhat surprising findings of a new study carried out by AXA Business Insurance and the Association of Business Psychologists (APB).

Contrary to the stereotypical perceptions of entrepreneurs as maverick individuals with an inherent appetite for risk, the analysis found that the majority (52%) of respondents fell within one of three risk types – wary (22%), prudent (15.2%) or deliberate (14.8%).

The entrepreneurs surveyed showed far less adventurous characteristics (3.6%) than the average general public (12.8%). The research also discovered that individuals who are more calm, confident, optimistic, organised, methodical and measured have greater financial resources and may, therefore, be more successful small business owners.

Darrell Sansom, managing director at AXA Business Insurance, said: "We often think of entrepreneurs as being adventurous renegades, renouncing the more common commercial work environment in search of their own fortunes and in support of their passions. So it's fascinating to see the level of vigilance they employ when compared with the broader population."

The business owners surveyed represented limited companies, sole traders and partnerships. Those involved in partnerships were more likely to be cautious whereas sole traders were more carefree.

In total, the research identified eight characteristics and found that small business owners were more likely than the general public to be wary, intense, prudent or deliberate. And they were less likely than the general public to be spontaneous, composed, adventurous or carefree.