A study into the psychology and risk behaviours amongst British entrepreneurs has found that they demonstrate a far more prudent and risk-averse attitude than the general public.
The study, carried out by AXA and Psychological Consultancy Limited, in conjunction with the Association of Business Psychologists, found that small business owners were far more likely to maintain wary, prudent and deliberate (calculated) traits than the general population.
Contrary to 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%).
Moreover, the entrepreneurs surveyed showed far less adventurous characteristics (3.6%) than the average public (12.8%). Despite the seemingly conservative approach taken by entrepreneurs, the research found 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.
Matthew Reed, managing director, intermediary at AXA Commercial Lines and Personal Intermediary said: “It is perhaps surprising to find out that small business owners are more cautious than their entrepreneurial nature would otherwise suggest. This is encouraging news for brokers as it would indicate SMEs value the security and peace of mind that insurance brings. Brokers are in the best place to advise which products are best suited to this audience, to talk them through all the details, allowing them to make a calculated decision, ultimately, giving them the reassurance they appear to crave.”
The business owners surveyed represented limited companies, sole traders and partnerships. Those involved in partnerships were more likely to be wary, prudent and composed, when compared to their entrepreneur peers; whereas sole traders demonstrated more carefree, intense and spontaneous qualities, suggesting the nature of their roles allows for more flexibility in their decision-making. Those representing limited companies showed a proportionate balance across wary, prudent and deliberate risk types.
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