Running a business is usually considered a stressful endeavor requiring long hours and a great deal of personal sacrifice. However, a study recently published in the Journal of Business Venturing suggests being an entrepreneur may have unique psychological benefits.
Using data from the 2011 Global Entrepreneurship Monitor survey, the study compared 251 early-stage entrepreneurs from Sweden with about 1,600 people working in traditional settings. Researchers built on the core principles of self-determination theory (SDT), a “theory of motivation and personality that addresses three universal, innate and psychological needs: competence, autonomy, and psychological relatedness,” when making observations and drawing conclusions. Their goal was to see how “psychological autonomy” plays into the relationship between entrepreneurial pursuits and personal well-being.
Autonomy is one of the basic components of entrepreneurship. People need to feel like they’re active agents in their own lives and have a measure of control over their decisions. This type of behavior is integral in entrepreneurial pursuits. Self-employed business owners must create goals, organize the steps to achieve desired outcomes and work through those steps in order to maintain the viability of the endeavor. This sense of being in control has a significant impact on personal welfare.
With autonomy comes the need to be open to learning new things and applying both learned information and acquired skills in real-life situations. Entrepreneurs are faced with daily challenges requiring adaptation and by nature learn to master tasks with which they may initially be unfamiliar. This cycle of learning, application and adaptation continues throughout the life of the business, providing a sense of accomplishment and encouraging entrepreneurs to move forward.
The study’s authors refer to being an entrepreneur as a “self-organized process,” suggesting business ownership is about more than taking risks and making money. Instead of basing goals and aspirations on what will generate the biggest payoff, the study proposes entrepreneurs should choose business visions “in line with their innate needs and aspirations.” Pursuing goals unhindered by an outside agenda and not influenced by third parties leads to greater satisfaction in work. Unlike in a traditional work setting, entrepreneurs create their own paths and are free to seek unique solutions to meet business objectives.
Having meaningful goals was an important highlight of the study discussion. The authors called attention to the psychological benefit of working toward a personal goal in all areas of life, including business. Since starting a business is often based on a personal desire or dream, entrepreneurs naturally pursue this path. Along the way, they form the connections and relationships necessary to turn their visions into viable companies, and these relationships contribute to greater personal and professional well-being.] Although being an entrepreneur will always be more challenging than working for an existing company, the potential benefits for those with self-directed mindsets may serve as encouragement for more people to follow their dreams of becoming independent business owners.
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