Reluctant Entrepreneurs: Why They Do It and How They Do It

Little is known about the growing phenomenon of the “reluctant entrepreneur,” or individuals who start new ventures because they have no other choice. Often, these individuals would prefer to work as salaried employees but find themselves jobless; their motivation is less the entrepreneurial spirit than economic necessity. This article, based on an empirical study of 287 reluctant entrepreneurs, examines the personality issues that may drive them and provides evidence that they can achieve impressive results despite their less-than-perfect motivation. The study seeks to find out whether reluctant entrepreneurs possess the “Big Five” characteristics of entrepreneurs — risk-taking, need for achievement, need for autonomy, self-efficacy, and internal locus of control. The authors find that reluctant entrepreneurs are generally older than opportunity entrepreneurs when they start their business, and so have more managerial experience. A higher level of managerial experience predicts a higher level of success, and a higher level of the Big Five characteristics predicts a lower level of reluctance to become and remain an entrepreneur. Although it is encouraging that reluctant entrepreneurs are often successful, it is less encouraging that many are unhappy and want to return to their positions as salaried employees.