What Defines Entrepreneurial Behavior in Business?

Explore the key characteristics and practices that drive entrepreneurial behavior to success. Understand how proactive planning, risk-taking, continuous learning, and effective team building contribute to business growth. Learn from real-world examples and gain insights into the behaviors that can foster your entrepreneurial journey.

Table of Contents:

Understanding Entrepreneurial Behavior

How Can Entrepreneurial Behavior Drive Success? Entrepreneurial behavior involves an entrepreneur’s proactive actions to achieve goals, emphasizing planning, risk-taking, and continuous learning. Successful entrepreneurs focus on clear objectives, embrace challenges, and remain self-aware while fostering teamwork. Their adaptability and willingness to innovate and serve customers drive business growth and overall performance in dynamic environments.

Definition and Scope

Entrepreneurial behavior encompasses the actions an entrepreneur undertakes to achieve their desired goals. It is specifically restricted to tasks that are, or can be, under the entrepreneur’s direct control, such as defining the role of the board, shaping the organization, making key decisions, and setting goals and strategies.

A core argument is that understanding entrepreneurial behavior requires focusing on these controllable actions. By examining the determinants of entrepreneurial performance, we can establish a link between an entrepreneur’s actions and overall business performance. Simply put, we need to know what an entrepreneur does, why they do it, and how these actions impact the business’s success.

Entrepreneurial performance itself is influenced by the external environment as well as the individual’s capacity and drive (ability and motivation) to manage that environment, often reflected in organizational design and context. The entrepreneur is presumed to act upon the environment in pursuit of their goals. While actual entrepreneurial performance is challenging to measure and is often conflated with business performance in studies, it is crucial to recognize that the two are not always identical.

Key Characteristics and Practices of Successful Entrepreneurs

Unstoppable entrepreneurs exhibit distinct behaviors that contribute to their success:

Focus on Planning and Goal Setting

Advance Daily Planning: They proactively plan their day before external demands take over, ensuring they block out time for their most important priorities.
Setting Clear Goals: They establish clear, measurable goals across the long-term, mid-term, and short-term horizons. This clarity provides focus, keeps them motivated during challenges, and guides their daily and weekly planning.
Evaluating Actions Daily: They consistently review their accomplishments and shortfalls at the end of each day, recognizing that today’s actions build tomorrow’s future.

Mindset and Approach to Business

Unafraid of Failure (Learners): They view failure as a valuable teacher, demonstrating a willingness to take risks and the resilience to recover and continue after setbacks.
Taking Calculated Risks: Contrary to the image of reckless risk-takers, successful entrepreneurs thoroughly know the numbers and probabilities behind their actions, ensuring their risks are calculated and strategic.
Constantly Learning (Lifelong Learners): They acknowledge they don’t know everything and continuously invest in expanding their knowledge of business, their industry, and new technology. This necessity-driven learning extends to all facets of running a business, from payroll to accounting.
Embracing Change (Love Change): They actively seek out and exploit change as an opportunity. In a volatile business landscape, their love for change and innovation is a key survival mechanism, as seen in the success of companies like Microsoft and Toyota.
Creative and Innovative: Creativity is the source of new ideas, which precede innovation—a core function of the entrepreneur. They translate new ideas, often sparked by changing needs or environment, into wealth creation.
Always Seeking Opportunities: They don’t rest on current successes. They proactively look for new trends, new applications for existing tools, and their next opportunity to avoid stagnation.

Personal and Interpersonal Skills

Knowing Strengths and Weaknesses: They are self-aware and honest about their abilities, using this knowledge to inform hiring, partnership decisions, and leveraging their own skill set.
Brave and Principled: They possess the courage to stand up for their beliefs and their business against external pressures, while still seeking counsel and adhering to applicable laws.
Positioning Themselves to Serve: Their focus is not solely on personal success but on serving their customers, whether through superior products or delightful customer service.

Drive and Team Building

Desire to Win and Succeed Coupled with Vision: They goal-oriented, focusing their energy on achieving specific, defined goals. This visionary drive has been a major factor in the success of both small and large enterprises.
Strong Need for Achievement: This powerful drive compels them to be creative and willing to take risks necessary for success, aligning their intensity of purpose with goal attainment.
Hiring A-Team Players: They understand the importance of building a top-tier team, hiring individuals who fill their skill gaps and providing the necessary incentives to attract the best talent.
Happy to Work Hard: While running a business involves wearing many hats, successful entrepreneurs are willing to put in the immense hard work required, especially when it directed toward something they love.
Getting Proper Nutrition and Exercise: They recognize that productivity and peak performance require taking care of both mind and body through proper diet, hydration, and daily physical activity.

Academic Perspectives on Entrepreneurial Behavior

The Importance of Achievement, Vision, and Risk

Studies have confirmed a strong relationship between entrepreneurial behavior and business growth. Key behavioral patterns noted in successful enterprises include vision, risk-taking, and the need for achievement (Mutazindwa, 1997; McClelland, 1961). The drive to achieve makes entrepreneurs creative and risk-takers.

Entrepreneurship and Business Success

While entrepreneurship is vital, it is not a panacea for success. Some small businesses, though numerous, are not inherently entrepreneurial, being formed for reasons like income or independence rather than growth. Furthermore, research suggests that entrepreneurial behavior exists in many small firms, yet poor performance sometimes attributed to factors like bad financial management, indicating the need for further research in this area (Sewannyana, 1997).

Types of Entrepreneurial Behavior Analysis

Organisational Behavior (OB) provides a framework for understanding, predicting, and controlling human behavior in an organizational context, drawing on integrated disciplines like psychology and sociology. OB involves two levels of behavior analysis relevant to entrepreneurship:

Group Behaviour: Examines the interaction of two or more people toward common objectives. In an organization, jobs are interdependent, requiring cooperation. Factors like group size, location, communication, and status affect group cohesion.
Individual Behaviour: Focuses on the differences between individuals (e.g., in intelligence, personality, skills) and the factors that influence their behavior (e.g., ability, perception, motivation, socio-cultural factors).

Examples of entrepreneurial behavior

Below are eight concise, real-world examples of entrepreneurial behavior you can copy as references or case snippets. Each one shows what the entrepreneur actually did—not just a trait—so you can mirror the action in your own venture.

Curiosity in action – Sara Blakely kept asking “why can’t shape-wear be seamless?” She cut the feet off panty-hose, wore the prototype herself, then ran a $5,000 experiment that became Spanx.
Rapid experimentation – The Collison brothers built a seven-line JavaScript payment snippet, tested it live with a single developer in 2009, and iterated weekly until Stripe processed billions.
Decisive pivoting – During COVID-19 lockdowns a digital-marketing agency owner lost 60 % of retainer clients; within 10 days she shifted the team to “virtual-event funnels,” landing three new contracts and saving 20 jobs.
Boundary-setting (saying “no”) – A SaaS founder rejected a $250 k one-off custom feature request because it would dilute the roadmap; six months later the same prospect signed a $1.2 M three-year SaaS deal for the standard product.
Asking for help – A solo tech-founder who hated operations hired a part-time COO through a founder-Slack group; the move freed 25 % of her week and let her close a $1 M seed round three months faster.

Other examples

Data-driven risk-taking – Elon Musk ran Monte-Carlo cost simulations on reusable rockets before betting SpaceX’s remaining cash on the fourth launch—which succeeded and cut launch cost per kg by ~85 %.
Social-impact behaviour – A Swiss start-up sourced coffee grounds from local cafés, turned them into biodegradable packaging, and published transparent impact metrics—winning B-Corp status and a loyal retail chain in year one.
Subscription-model discipline – Instead of one-off sales, a freelancer packaged monthly “website care” plans; onboarding + tiered pricing lifted monthly recurring revenue to 78 % of total sales and cut churn below 3 %.

Copy any behaviour above, set a 30-day measurable goal, and you’ll be practising entrepreneurship—not just reading about it.