Entrepreneurial Resilience: What Makes Entrepreneurs Start Another Business After Failure?
There are many ways of earning money and gaining self-realization in the modern western world. Rather often, these two needs are connected: people actualize themselves through choosing occupations which fit them, or which they like, and which can bring them income. In these terms, it does not matter how a person makes a living exactly—be it a regular office job, freelancing, or business, the main criteria for choosing a profession and staying in it are whether it brings in money, and whether an individual likes what he or she is doing. And though there is nothing bad about office jobs, many people nowadays prefer freelancing or starting their own businesses. The latter is probably the most adventurous, and, in the case of failure, an entrepreneur may find himself or herself at a crossroad, choosing between giving up or trying again—and even though failure in business may be a painful and disappointing experience, many entrepreneurs incline towards the second option. Why? Due to the phenomena, or quality, known as entrepreneurial resilience.
The first step towards understanding entrepreneurial resilience would be to define the concept of resilience itself. This word (or the word phonetically similar to it) exists in a number of European languages—English, French, Spanish, and German, in particular—although its meaning remains approximately the same. In its narrow meaning, resilience is related to the ability of physical objects to regain its original shape after deformations. In a more “social” and broad context, resilience can be defined as the ability of an individual to withstand hardships, and life and career setbacks without delving into despair and/or giving up. What is important here is that a resilient person not only withstands difficulties courageously (otherwise it would be closer to martyrdom), but also is able to recover from pressure and start all over again, considering the experience gained during the previous enterprise (Annals of Innovation & Entrepreneurship). In this regard, we can see that resilience is a crucial psychological trait for any entrepreneur, since, as we know, starting one’s own business is not always about achieving success, but mostly about the ability to face and overcome obstacles—many of which can be stressful and potentially ruining.
So, based on the definition above, entrepreneurial resilience can be understood as the ability to overcome and recover from stress caused by hardships and/or failure in business, and to build a new venture, having learned from the mistakes made previously. Undoubtedly being a great trait, entrepreneurial resilience is something one can develop, which is good news for those who want to start their own businesses, but worry about being able to bear obstacles: there are several key features successful (and resilient) entrepreneurs possess—and each of them can be worked on.
Generally, they can be divided into three groups: the way a person perceives the world around them; activities one takes; and the way of communication with other people. Entrepreneurial perception is based on the sense of personal responsibility, personal beliefs, and optimism. The sense of responsibility implies that it is the entrepreneur himself or herself who causes something to happen or not happen in his or her life. A person with the sense of personal responsibility sees his or her achievements and failures not as a result of extraneous circumstances, but rather as a result of the application of one’s skills and talents, and as a product of inner motivation. Instead of relying on luck, beneficial environments, or the goodwill of other people, an entrepreneur applies his or her skills and talents in the area he or she wants to succeed in, gaining control over difficult situations and admitting that outcomes directly correspond with the amount of effort and motivation spent. Personal beliefs may differ depending on a person, but in general, they serve as additional support and motivation; for example, a person may believe that what he or she is doing is for the greater good, and gain additional confidence through this. Optimism, in its turn, is crucial for being able to interact with the world openly, in a positive manner, without expecting it to be mean and hostile; it is important that such optimism remains realistic, which means that an entrepreneur is still aware of challenges and difficulties awaiting him or her (Business 2 Community).
The way an entrepreneur acts is the second component of entrepreneurial resilience, and includes a goal-oriented approach to life, problem-solving skills, and the capability of self-support. The goal-oriented approach means that having decided what an entrepreneur wants to achieve, he or she develops a vision of how to do it, and is able to analyze resources, tendencies, and actions which are related to accomplishing this goal. Also, a goal-oriented entrepreneur is flexible enough to adjust his or her behavior in accordance to unexpected changes occurring on the path towards the goal. Problem-solving generally implies the ability to approach problems in a systematic way, without panicking or blatantly rushing through. An entrepreneur with great problem-solving skills can analyze a problem, define its key aspects, develop a plan addressing each of these aspects, and act accordingly, thus minimizing the problem or solving it completely. Finally, self-support includes self-assurance (the belief one has all the necessary qualities, talents, and resources needed to succeed) and self-composure—the ability to withstand and manage stress, approaching difficulties rationally, and restraining from acting under the influence of emotions (Business 2 Community).
The communication skills necessary for any entrepreneur include developing a diverse and supportive social network, and the ability to initiate contact with other people and keep doing so. The former is crucial during hard times; when there are many people whom an entrepreneur has established close personal and/or business relationships with, overcoming harsh times can be much easier; the latter implies that an entrepreneur is able to communicate with others in a courageous and open way, freely expressing his or her ideas, expectations, and opinions. Such direct communication is necessary for resolving personal and business conflicts, and is a key element in developing the aforementioned supportive network (Business 2 Community).
As we can see, entrepreneurial resilience is a valuable quality everyone starting their own business should possess or develop. Being, in general, the ability to withstand difficulties and rise after failures, entrepreneurial resilience comprises various skills related to how a person communicates with others, solves problems, and perceives the world. These skills can be developed, so those who would like to start their own businesses might want to work on some of these traits.
Six Steps to Building Entrepreneurial Resilience." Business 2 Community. N.p., n.d. Web. 19 July 2017. http://www.business2community.com/strategy/six-steps-building-entrepreneurial-resilience-0986433#W2AYmXdTg5IHQ8eo.97
Hedner, Thomas, Adli Abouzeedan, and Magnus Klofsten. "Entrepreneurial Resilience." Annals of Innovation & Entrepreneurship. N.p., n.d. Web. 19 July 2017. http://journals.co-action.net/index.php/aie/article/view/7986/html_194