An Investigation of Personality Correlates of Small Business Success

The purpose of the current study is to empirically examine the relationship between personality characteristics and small business success. A cluster of 14 personality variables were examined using a work-based measure of personality, the Personal Style Inventory (PSI), adapted for small business owners. Small business success was operationally defined in terms of financial and personal dimensions of success. The two criterion variables assessed were business performance and work satisfaction. It was hypothesized that business performance and work satisfaction are positively related.

One hundred forty-seven small business owners completed the web survey. Correlational analyses revealed personality characteristics were significantly related to business performance and work satisfaction. Goal-setting orientation, emotional resilience, ability to sell self, social networking, and work-related locus of control were positively related to both business performance and work satisfaction. Additionally, autonomy, adaptability, competitiveness, optimism, risk tolerance, work drive, and tolerance for financial security were positively correlated with work satisfaction measures. Results also indicated that business performance and work satisfaction are moderately correlated. The hypotheses were further tested using step-wise regression procedures. Organizational variables (company age, size, and industry type) were controlled in the regression analyses. The fist regression analysis identified one personality variable, goal-setting, as a significant predictor and the model accounted for 8% of the variance in business performance. In examining work satisfaction, regression analysis identified optimism and work-related locus of control as significant predictors. The model accounted for 26% of the variance on owners' work satisfaction.

The findings of the present study provide further support for research evidence suggesting that entrepreneurs' personality traits are related to success outcomes. Studies of personality and small business success are useful in career counseling, personnel selection, and in the design of training and development programs for small business owners.