ENTREPRENEURIAL POTENTIAL PROFILE MEASUREMENT IT’S IMPACT ON SMALL BUSINESS PERFORMANCE

Abstract

The entrepreneurship issue has been widely broadcasted among both academic and business environment by means of publications, practical cases and examples from entrepreneurs who are well succeeded in their business career. Several articles, seminars and conferences have addressed the issue and also have inspired researchers and scholars to identify which characteristics compose the entrepreneur’s profile. Small companies are considered to be one of the main agents of development and economic growth of a country as they contribute in two different ways: they create more job opportunities and technological innovations. In Brazil, for example, small companies represent 98% of the total running companies and 59% of the total workforce. Hence, small companies have a central importance for the social system in a capitalist society. Considering this scenario, the present research aims to build an instrument to identify which are the main factors that compose the entrepreneur’s profile. In order to achieve that objective, 965 questionnaires were collected. According to the results of the research, the EPP- Entrepreneur Potential Profile is composed by eight factors: strategic competence, risk, innovation, formal planning, relationship, analytical thinking, dedication and challenge. Through Structural Equation Modeling, it was verified that EPP (Entrepreneur Potential Profile) could explain 25% of performance of a small business. This study contributes with the development of a scale to measure Entrepreneur Potential Profile, with the proposal of a Entrepreneur Potential Profile Index - EPPI (using structural weights), associated with a typology of EPPI levels (low to high Entrepreneur Potential), that can help entrepreneurs to understand their profile and compare it with the population. Also, this work suggests that Entrepreneurship Profile Potential is an antecedent of business performance, and should be considered in new studies that aim to improve performance of small business firms. Key words: Search Terms. Entrepreneurship. Small business. Performance