Satisfaction or business savvy--examining the outcome of new venture creation with respect to entrepreneurial characteristics, expectation, optimism, realism, and pessimism.
Liang, Chyi-lyi "Kathleen" ; Dunn, Paul
INTRODUCTION
In the most recent global turmoil of the financial market,
entrepreneurs continue to struggle to secure funding and market
opportunities. According to the latest research released by the Small
Business Administration, "in the first three quarters of 2009,
small businesses accounted for almost 60 percent of the net job losses,
with the greatest losses in the first quarter. By the third quarter, net
small firm job losses were one-third what they had been in the first
quarter.'" (SBA, 2011) Interestingly, the American Express
Open Small Business Monitor found that "55 percent of entrepreneurs
were optimistic about the future of their businesses in September 2009,
up 10 percent from earlier in the year"' (SBA, 2011) This
situation brings up a myth of entrepreneurship that many researchers
have yet to identify: why do entrepreneurs start and stay in business
even when the economic environment is against the odds of success?
It is typically assumed that people engage in entrepreneurship
because there are profits to be made. In the traditional school of
economic way of thinking, we assume the creation of value-added goods
and services should lead to profit maximization. Furthermore, the
decisions and actions related to profit maximization should be
positively correlated with higher utility for individuals who are making
the decisions. In contrast to this view, this paper argues that
entrepreneurship is more adequately characterized as a
beyond-profit-seeking activity. Evidence from some has shown that
entrepreneurship does quite generally not pay in monetary terms (Baron
& Shane, 2005; Hey, 1984, Petrakis, 2005; De Meza and Southey, 1996;
Coelho and De Meza, 2006; Brocas & Carrillo, 2004; Puri and
Robinson, 2004; Simon and Houghton, 2002; Benz, 2006). However the
literature lacks empirical studies to examine how entrepreneurs reflect
on the outcomes of new venture creation with respect to financial reward
and personal satisfaction.
This article focuses on understanding if being an entrepreneur is
truly rewarding because it entails substantial non-monetary benefits,
like greater autonomy, broader skill utilization, and the possibility to
pursue one's own ideas. We have introduced an innovative framework
to examine entrepreneurs' reflection after starting and running
their new ventures linking to 5 factors: entrepreneurial
characteristics, expectation, optimism, realism, and pessimism
There are three reasons for us to choose these five factors as the
core of the paper. First, optimism, realism and pessimism are newly
introduced to entrepreneurship studies in recent years, and there is a
lack of understanding what these factors mean to entrepreneurs and how
they impact decisions. Second, many researchers have argued against the
idea that we should pay more attention to how entrepreneurs are made,
not who entrepreneurs are. Several studies have confirmed the importance
of recognizing the differences between optimism, realism, and pessimism
and other entrepreneurial characteristics (references will be added
later due to authors' identities). There is a need to further
examine the levels of effects of optimism, realism, and pessimism on
entrepreneurs and their decisions in venture creation. Most of the
studies have emphasized on pre-venture psychology and extraordinary
circumstances that drive people to become entrepreneurial. We understand
the rate of failure is high among new ventures in the first 1-3 years of
establishment. What we don't know enough, is how entrepreneurs
manage to survive beyond the objective of profit maximization. Very
limited information exists to verify how entrepreneurs feel after they
start the business, given business outcomes and personal satisfaction.
Thirdly, entrepreneurial decision-making is a complex process. We agree
that a positive cash flow implies a happy business. We have learned from
much of the literature regarding separated issues about characteristics
of entrepreneurs, entrepreneurial decision making and behavior, and
reactions of entrepreneurs while facing challenges and barriers. There
still exists a gap in entrepreneurship literature to generate a cohesive
and systematic approach to link separated factors together which will
reveal more robust results in analyzing entrepreneurial phenomena.
This article presents the results of a unique study designed to
bridge the gap in existing literature regarding reflections of
entrepreneurs on business outcome and personal satisfaction after
starting and running the business. It is not our intention to generalize
our conclusions based on a limited sample. However the results of this
study provide new knowledge and new information that have not been
discussed before. Many assumptions remain untested associated with
entrepreneurial decisions and behavior. We also acknowledge that new
venture creation is a process that may change from time to time as a
result of changes in the social, political, or economic environment. The
perceptions of entrepreneurs on their new venture will also change over
time.
LITERATURE REVIEW
Scholars have generally agreed that a crucial aspect of
entrepreneurship involves the recognition of emerging business
opportunities, which are often exploited through the new venture
formation. While most of the research has focused on entrepreneurs and
environment, very little attention has been paid to how entrepreneurs
actually feel about the business outcome.
Much of the work on entrepreneurial characteristics has discussed
high achievement drive, action oriented, internal locus of control,
tolerance for ambiguity, moderate risk taking, commitment,
opportunistic, initiative, independence, commitment/tenacity,
creativity, and optimism (Liang & Dunn, 2003; Malach-Pines, Sadeh,
Dvir, & Yafe-Yanai, 2002; Crane & Sohl, 2004; Liang & Dunn,
2008(1)). Several researchers have discussed the role of optimism as a
motive force accounting for persistence and commitment (Kuratko &
Hodgetts, 2004; Tennen, Affleck & Klock, 1992; Seligman &
Schulman, 1986; McColl-Kennedy & Anderson, 2005).
Optimism has also been characterized as a negative factor in
entrepreneurship resulting high risks of failure (Baron & Shane,
2005; Hey, 1984, Petrakis, 2005; De Meza and Southey, 1996; Coelho and
De Meza, 2006; Brocas & Carrillo, 2004; Puri and Robinson, 2004;
Simon and Houghton, 2002).
Manove (2000) is among one of the first researchers to demonstrate
the coexistence of optimists and realists. He explored the interaction
between the optimists and realists regarding their self evaluated
productivity and competitiveness. Fraser and Greene (2006) in the
development of an occupational choice model suggest that entrepreneurs
learn from experience and that both optimistic biases in talent beliefs
and uncertainty diminish with experience--the more entrepreneurs learn,
the more realistic they become. However, none of these researchers
provided tool to measure either optimism or realism.
The optimism discussed in the entrepreneurship literature is
similar to "dispositional optimism" in psychology.
Dispositional optimism is the bias to hold, across time and situations,
positive expectations (Sujan, 1999; Wrosch and Scheier, 2003; Chang,
2001; Haugen, Ommundsen, and Lund, 2004). Psychology literature suggests
that optimists feel in control of their activities, suggest that those
activities will give them more satisfaction, that they have a
significant role in initiating projects, have adequate control and time
to carry them out, have made more progress toward their goal, and have
relatively heightened expectations that the outcomes of their projects
will be successful which would yield more positive outcomes in
well-being and coping behavior (Jackson, Weiss, Lundquist and Soderlind,
2002; Jackson, Weiss, Lundquist and Soderlind, 2002; Leung, Moneta and
McBrice-Chang, 2005; Day and Maltby, 2003; Wrosch and Sheier, 2003;
Scheier and Carver, 1987).
Some scholars have discussed relationships between optimism,
business opportunities recognition, new venture performance, and
positive expectations for entrepreneurs (Ardichvili et al, 2003; Shane
and Venkataraman, 2000).
Crane and Crane (2007) conclude that, "Based on a review of
the literature spanning almost 25 years, one must conclude that
successful entrepreneurs do possess dispositional optimism; that they
are goal-oriented individuals; and, importantly, that they persist or
continue to pursue these goals despite impediments and setbacks."
P. 23. Similarly, Compte and Postelwaite (2004) conclude that, "On
those projects they under-take, however, their optimism leads to higher
performance, that is, they have higher probability of success." P
1543
On the other hand, Hmielski and Baron (2009) conclude that there is
a negative relationship between entrepreneurs' optimism and the
performance (revenue and employment growth) of their new ventures. Past
experience creating ventures and industry dynamism moderated these
effects, strengthening the negative relationship between
entrepreneurs' optimism and venture performance. P 473
It is typically assumed that people engage in entrepreneurship
because there are profits to be made. In contrast to this view, this
paper argues that entrepreneurship is more adequately characterized as a
non-profit-seeking activity. Evidence from a broad range of authors and
academic fields is discussed showing that entrepreneurship does quite
generally not pay in monetary terms. Being an entrepreneur seems to be
rather rewarding because it entails substantial non-monetary benefits,
like greater autonomy, broader skill utilization, and the possibility to
pursue one's own ideas. It is shown how incorporating these
non-monetary benefits into economic models of entrepreneurship can lead
to a better understanding of the phenomenon.
Benz (2006) may be closer to the truth when he concludes that
"Measures that use the standard economic theory performance may be
inappropriate for entrepreneurs." He says that there is substantial
body of indicating that is not particularly attractive in monetary
terms. Entrepreneurs receive non-monetary satisfaction from the higher
autonomy, the possibilities to use their skills and ability and
opportunity to be creative.
CONCEPTUAL MODEL AND HYPOTHESES
We developed a conceptual model for this study to test how
entrepreneur's reflection to new venture creation relates to
entrepreneurial characteristics, expectation, optimism, realism, and
pessimism. Based on the literature review, entrepreneurs enter the
initial phase of entrepreneurial process by recognizing business
opportunities. Entrepreneurs have a set of perceptions in this initial
phase to expect the new ventures will create individual happiness and
will improve individual financial situations, given their
optimism/realism/pessimism levels and other characteristics.
Entrepreneurs re-assess the outcomes of the business after the venture
is created and as they are operating and managing their businesses,
which result in the 5 hypotheses for this study:
H1: Entrepreneurs who are realistic optimistic believe their
business is up and running well, their sales are higher than expected,
and their profits are higher than expected.
H2: Entrepreneurs who are realistic optimistic agree that they are
happier and their financial situation has been improved after they start
the new venture.
H3: Entrepreneurs who are pessimistic believe their business is not
up and running well, their sales are not as high as expected, their
profits are not as high as expected, they are not happier, they are not
financially better off, and they would not support another new venture.
H4: Entrepreneurs who are taking control, independent, creative and
willing to take risks believe their business is up and running well,
their sales are higher than expected, their profits are higher than
expected, they are happier, they are financially better off, and they
would support to create another new venture.
H5: Entrepreneurs who have had higher expectations prior to
starting new venture, are more likely to believe their business is up
and running well, their sales are higher than expected, and their
profits are higher than expected. Furthermore, they are actually happier
and financially better off, and would support to create another new
venture.
METHODOLOGY
Survey design
The first step of this research was to design a questionnaire. The
target respondents to this research were in-business entrepreneurs. The
survey asked: demographics of the entrepreneur and the business,
optimism assessment, realism assessment, expectations and personal and
business outcomes from the venture. Entrepreneurial and business
demographics included gender, age, ethnicity, marital status, education,
entrepreneur's experience, type of business, location of the
business and number of full-time and part-time employees.
Entrepreneurial characteristics included in this study were
independence, taking control, believed they were creative and being
willing to accept risks. The answers were on a Likert scale as Strongly
Agree (1), Agree (2), Disagree (3), and Strongly Disagree (4). We
avoided the "Neither Agree Nor Disagree" level and hoped to
impose more specific choices on entrepreneurs.
[ILLUSTRATION OMITTED]
Optimism assessment statements were adopted from the Life
Orientation Test (LOT-R) which contains three positive statements, three
negative statements, and four non-scored items as filler statements.
Three positive statements were: "In uncertain times, I usually
expect the best", "I am always optimistic about my
future", "Overall I always expect more good things happen to
me than bad". Three negative statements were: "If something
can go wrong for me, it will", "I hardly ever expect things to
go my way", and "I rarely count on good things happening to
me".
The LOT-R test is recognized and used by psychologists as a
sufficient and robust tool to measure optimism. The LOT-R has been used
to explore personal control in sports, to investigate the relationship
between optimism and depression/coping/anger, to analyze effects of
optimism on career choice and well-being, and to examine the impact of
optimism on changes of environment and circumstantial situations (Burke,
et. al. 2006; Burke, Joyner, Czech and Wilson, 2000; Puskar, Sereika,
Lamb, Tusaie-Mumford and Mcguinness, 1999; Creed, Patton and Bartrum,
2002; Perczek, Carver, Price and Pozo-Kaderman, 2000; Sydney, et. al.
2005). Clinical researchers have used the LOT-R to explore how optimism
affects patients in dealing with health problems and therapies (Walker,
Nail, Larsen, Magill and Schwartz, 1996). The LOT-R is available on-line
and it is free for researchers to use (Centre for Confidence and
Well-being, 2006). There are 5 levels of choices in the original LOT-R
test, which are I Agree a Lot (1), I Agree a Little (2), I Neither Agree
Nor Disagree (3), I Disagree a Little (4), and I Disagree a Lot (5).
There is no research-based instrument to measure realism in the
literature. We generated a list of realism statement, conducted a
thorough literature review in psychological and entrepreneurial
research, and extensive discussions and consultations with entrepreneurs
and entrepreneurship educators. The seven realism statements were:
"I usually set achievable goals", "I usually look before
I leap", "When planning, I usually consider both negative and
positive outcomes", "I am always realistic about my
future", "I try to be reasonably certain about the situation I
face when starting an important activity", and "I usually
weigh the risks and rewards when making decisions". Entrepreneurs
responded based on a five-point Likert scale ranging from "I agree
a lot" to "I disagree a lot", which was the same scale
used in LOT-R testing optimism statements.
Using the reliability test on the responses received from our
sample of married entrepreneurs, Cronbach's Alpha statistic showed
a much higher confidence level for the realism statements, 0.838,
compared with the optimism statements, 0.350, (Table 1).
Survey procedure
The questionnaire was pre-tested among researchers and
entrepreneurs and administered to business entrepreneurs by a research
contact person. The entrepreneur was given the questionnaire and allowed
to complete it in private during business hours or another convenient
time for the business owner and returned it. The questionnaire was
administered to a convenience sample of business owners in the
Mississippi River Delta region between 2007 and 2009. There were 354
respondents totally.
Statistical analysis
Factor analysis is applied to identify underlying variables, or
factors, that explain the pattern of correlations within a set of
observed variables. Factor analysis can also be used to generate
hypotheses regarding causal
mechanisms or to screen variables for subsequent analysis. In our
case, we use the factor analysis to extract factors that have similar
patterns in optimism, realism, pessimism, other entrepreneurial
characteristics, and entrepreneurial expectations. Principal components
extraction (PC) method is applied to extract factors based on
calculating factor loadings. A regression equation is then constructed
to test the relationship between entrepreneurial perceptions on spousal
reactions to new venture process and individual happiness/financial
improvement. A general form of the regression equation can be expressed
as:
[Y.sub.i] = [b.sub.0] + [b.sub.1][h.sub.1] + [b.sub.2][h.sub.2] +
[b.sub.3][h.sub.3] + ... + [b.sub.n][h.sub.n] + random errors
Where [Y.sub.i] represents the ith group of responses of the
entrepreneurs' reactions (i = 1, 2, 3, 4), [b.sub.n] represents the
levels or tendency of each factors corresponding to [Y.sub.i,] and
[h.sub.n] represents the nth factors corresponding to [Y.sub.i].
Six sets of regression equations were calculated:
[Y.sub.1]: My business is up and running well (scale 1 to 4, with 1
being strongly agree and 4 being strongly disagree)
[Y.sub.2]: The sales are higher than expected (scale 1 to 4, with 1
being strongly agree and 4 being strongly disagree)
[Y.sub.3]: The profits are higher than expected (scale 1 to 4, with
1 being strongly agree and 4 being strongly disagree)
[Y.sub.4]: I am happier after I start the business (scale 1 to 4,
with 1 being strongly agree and 4 being strongly disagree)
[Y.sub.5]: I am better off financially after I start the business
(scale 1 to 4, with 1 being strongly agree and 4 being strongly
disagree)
[Y.sub.6]: I would start another business again (scale 1 to 4, with
1 being strongly agree and 4 being strongly disagree)
The P-value of each [b.sub.n] was calculated and was used to verify
if any factor had a statistically significant relationship with
[Y.sub.i].
FINDINGS
Sample profile
Among all respondents to our survey, two-thirds were male and
one-third was female. Most of the respondents were white, over 30 years
old, and with at least some college education. Majority of them were
married with children. (Table 2)
When considering the business situation, most of the respondents
were in retail and service businesses. Approximately two-thirds of the
businesses were located in urban area. One third of the respondents
started the businesses last than five years ago. Not surprisingly most
of the businesses in the sample hired fewer than 5 full-time or
part-time employees. (Table 3)
It is always intriguing to know if entrepreneurs have had any work
experience before they start a new venture. In our sample, two-thirds of
the respondents had experience in their line of business. Quite a few of
the respondents had over 6 years of experience in business operations
and management. (Table 4)
FINDINGS
Five significantly different factors could be extracted using the
Principal Component Method. The first factor represents the
"optimism" and "realistic optimism" including some
of the statements for optimism and realism - I usually set achievable
goals; I usually expect the best; I'm always optimistic about my
future; Overall, I expect more good things to happen to me than bad.
The second factor represents the "realism" including
these statements--I usually look before I leap; When planning, I usually
consider both negative and positive outcomes; I usually try to find as
much information as I can before I decide what to do; I am always
realistic about my future; I usually weigh the risks and rewards when
making decisions; I try to be reasonably certain about the situation I
face when starting an important activity.
The third factor represents the "pessimism", which
included--If something can go wrong for me, it will; I hardly ever
expect things to go my way; I rarely count on good things happening to
me.
The fourth factor represents "entrepreneur's
expectation" which involves--I expect I would be happier after
starting my own business; I expect my family to be happier after I start
the new business; I expect to be financially better off after starting
the business; I expect family to be financially better off after
starting the business.
The fifth factor included statements to represent "other
entrepreneurial characteristics" such as being in control, being
independent, being creative, and being willing to accept risks.
Researchers have been contemplating to find the answer of a
million-dollar question: why do people become entrepreneurs starting
their businesses? There might not be a one-size-fits-all answer to this
question. Our sample has revealed some very interesting results that
have not been fully discussed in literature. Six regression models were
constructed to analyze if and to what extend different entrepreneurial
psychological factors relate to outcome assessment. (Table 6) When
entrepreneurs in our sample were optimistic or realistic, they were more
likely to believe their businesses were up and running well. The
pessimistic entrepreneurs were less likely to believe their businesses
were up and running well. Entrepreneurs who wanted to be in control,
independent, creative and risk taking, were more likely to believe their
businesses were up and running well. For entrepreneurs who had high
expectations before starting new venture, their did not think their
businesses were up and running well. (Table 6, Model 1)
With respect to sales and profits in businesses, entrepreneurs who
were optimistic or realistic were more likely to agree that the sales
were higher than they had expected before starting. Entrepreneurs who
were pessimistic or had higher expectations prior to starting new
venture, were not as satisfied with their sales situation after
starting. Respondents who had specific entrepreneurial characteristics
were more likely to agree that the sales were higher than they had
expected. (Table 6, Model 2 & Model 3)
Is personal satisfaction an influencing factor to motivate
entrepreneurs starting their own businesses? According to our sample,
being happy was a significant determinant for new venture creation. Only
pessimistic respondents in our sample were less likely to agree that
they were happier after starting the businesses. (Table 6, Model 4)
Even though some respondent did not think their expectation in
sales and profits were met, entrepreneurs still believed their venture
had improved their financial situation. Respondents who were optimistic,
realistic, had high expectations, and with certain entrepreneurial
characteristics were more likely to agree that they were better off
financially due to the new venture creation. Only pessimistic
respondents in our sample disagreed that they were better off
financially after starting the businesses. (Table 6, Model 5)
Finally we asked entrepreneurs: "give all you know now, will
you start another new venture again?" Respondents who were
optimistic, realistic, or with certain entrepreneurial characteristics
were more likely to say "yes". Respondents who had high
expectations or who were pessimistic disagreed. (Table 6, Model 6)
CONCLUSIONS AND IMPLICATIONS
This study focused on entrepreneurs and their assessment of their
venture outcomes. We have attempted to show that entrepreneurs do think
that their ventures provide satisfactions other than profits.
Specifically, those who were optimistic, had higher expectations, had
the selected entrepreneurial characteristics and were realistic felt
that their business was up and running well, met their sales and profit
expectations, improved their financial well being and they were happier
from having started the new venture. They were, in fact, willing to
start another venture. Those who were pessimistic had a negative
assessment of their ventures outcomes. Using our sample information, we
can conclude that--
H1: Entrepreneurs who are realistic optimistic believe their
business is up and running well, their sales are higher than expected,
and their profits are higher than expected. Hypothesis confirmed.
H2: Entrepreneurs who are realistic optimistic agree that they are
happier and their financial situation has been improved after they start
the new venture. Hypothesis confirmed.
H3: Entrepreneurs who are pessimistic believe their business is not
up and running well, their sales are not as high as expected, their
profits are not as high as expected, they are not happier, they are not
financially better off, and they would not start another new venture.
Hypothesis confirmed.
H4: Entrepreneurs who are taking control, independent, creative and
willing to take risks believe their business is up and running well,
their sales are higher than expected, their profits are higher than
expected, they are happier, they are financially better off, and they
would support to create another new venture. Hypothesis confirmed.
H5: Entrepreneurs who have had higher expectations prior to
starting new venture, are more likely to believe their business is up
and running well, their sales are higher than expected, and their
profits are higher than expected. Furthermore, they are actually happier
and financially better off, and would support to create another new
venture. Hypothesis confirmed.
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Table 1. Reliability of Tests Used
Realism Variables Optimism Variables
Reliability Number Reliability Number
Statistics Statistics
Cronbach's Alpha Variables Cronbach's Alpha Variables
0.838 7 0.350 6
Table 2. Entrepreneurial Demographics
Gender Frequency Percent
Female 129 36.4
Male 225 63.6
Total 354 100.0
Race
White 281 79.6
African American 56 15.9
Asian 9 2.5
Hispanic 5 1.4
American Indian 1 .3
Other 1 .3
Total 353 100.0
Marital Situation
Single 59 16.7
Single/children 49 13.9
Married/children 225 63.7
Married wo children 20 5.7
Total 353 100.0
Age
under 30 62 17.8
30-50 169 48.4
Over 50 118 33.8
Total 349 100.0
Education
<High School 11 3.6
High School 84 27.4
Some College 96 31.3
College 93 30.3
Graduate 23 7.5
Total 307 100.0
Table 3. Business Demographics
Type Business Frequency Percent
Retail 107 30.5
Service 206 58.7
Distribution 10 2.8
Contractor 4 1.1
Other 9 2.6
Manufacturer 15 4.3
Total 351 100.0
When Started
Last five years 109 37.5
6-10 years 56 19.2
11-15 years 42 14.4
Over 15 years 84 28.9
Total 291 100.0
Rural/Urban Frequency Percent
rural 133 37.7
urban 220 62.3
Total 353 100.0
Full-Time Employees
1-5 209 68.1
6-10 41 13.4
11 and over 44 14.3
None 13 4.2
Total 307 100.0
Part-Time Employees
1-5 159 63.6
6-10 18 7.2
11 and over 23 9.2
None 50 20.0
Total 250 100.0
Table 4 Entrepreneurial Experience
Line Experience Frequency Percent
Yes 219 63.1
No 128 36.9
Total 347 100.0
Operation Experience
0-5 78 39.8
6-10 40 20.4
11+ 56 28.6
None 22 11.2
Total 196 100.0
Mgt Exp Frequency Percent
1-5 49 31.8
6-10 28 18.2
11+ 53 34.4
None 24 15.6
Total 154 100.0
Mgt Exp Before
1-5 71 29.7
6-10 32 13.4
11+ 52 21.8
None 84 35.1
Total 239 100.0
Table 5. Factor Analysis
Rotated Component Matrix (a)
Component
Realism Expectations Optimism
Set Achievable goals .390 .059 .516 *
Leap .733 -.019 -.086
NegPos Outcomes .562 .077 .267
Find Information .777 .014 .184
Realistic About the Future .529 .055 .310
Weigh the risks and rewards .759 .065 .239
Certain About the Situation .727 .059 .214
Expect the Best .173 -.082 .762
Go Wrong .036 -.015 -.250
Always Optimistic .317 .081 .618
Don't Expect Things to Go My Way -.076 .082 -.040
Rarely Count on Good Things -.064 .008 -.024
Expect More Good Than Bad .273 .099 .539
Independence .097 .137 -.018
Control -.034 .053 .027
Creative .062 .100 .483
Risk Acceptance .188 .060 .319
Expected I would be happier .047 .855 -.017
Expected family to be happier .002 .864 .056
Expected to be better off .026 .880 .018
Family expect to be better off .126 .824 .075
Component
Characteristics Pessimism
Set Achievable goals .178 .008
Leap .013 -.010
NegPos Outcomes .050 .069
Find Information .069 -.105
Realistic About the Future .088 -.115
Weigh the risks and rewards .027 .044
Certain About the Situation .048 -.077
Expect the Best -.053 -.080
Go Wrong .079 .691
Always Optimistic .139 -.096
Don't Expect Things to Go My Way -.077 .859
Rarely Count on Good Things -.062 .819
Expect More Good Than Bad .178 -.233
Independence .849 .003
Control .854 .024
Creative .542 -.145
Risk Acceptance .541 -.055
Expected I would be happier .138 .050
Expected family to be happier .124 .050
Expected to be better off .025 .015
Family expect to be better off .021 -.042
Table 6. Regression Results
Model 1: My business is up and running well
[R.sup.2] 0.166 Sig 0.000 ***
Durbin-Watson 1.809
Coefficients
Optimism 0.161 ***
Realism 0.071 **
Pessimism -0.064
Expectations -0.036
Other Characteristics 0.168 ***
Model 2: Sales are better than I expected
[R.sup.2] 0.042 Sig 0.026 ***
Durbin-Watson
Coefficients
Optimism 0.065 *
Realism 0.036
Pessimism -0.077 *
Expectations -0.006
Other Characteristics 0.073 *
Model 3: My profits are higher than I have expected
[R.sup.2] 0.061 Sig 0.000 ***
Durbin-Watson 1.993
Coefficients
Optimism 0.066 *
Realism 0.023
Pessimism -0.128 ***
Expectations -0.061
Other Characteristics 0.067 *
Model 4: I am happier after starting the business
[R.sup.2] 0.177 Sig 0.000 ***
Durbin-Watson 1.877
Coefficients
Optimism 0.181 ***
Realism 0.049
Pessimism -0 14 ***
Expectations 0.085 **
Other Characteristics 0.172 ***
Model 5: I am better off financially
[R.sup.2] 0.125 Sig 0.000 ***
Durbin-Watson 1.998
Coefficients
Optimism 0.163 ***
Realism 0.118 ***
Pessimism -0.109 ***
Expectations 0.058
Other Characteristics 0.117 ***
Model 6: I would start another new venture
[R.sup.2] 0.119 Sig 0.000 ***
Durbin-Watson 1.974
Coefficients
Optimism 0.094 **
Realism 0.087 **
Pessimism -0.094 **
Expectations -0.01
Other Characteristics 0.211 ***
Note: *** indicates statistically significant at 1%.
** indicates statistically significant at 5%. * indicates
statistically significant at 10%.
