Setting Personal Goals

Lessons

Senior 4 · Entrepreneurship

Setting Personal Goals

4 lessons

Lesson 3 of 4

Personal qualities that support entrepreneurship

25 min

Case: two bakers, one bad month

Two young bakers in Nyagatare open on the same street in the same month. In their third month, a power cut spoils a whole day's dough for both of them, and sales fall because a new supermarket opens nearby.

Habimana decides that "business is luck" and that the supermarket has ruined him; he closes in month five. Umutoni writes down what went wrong, buys a small generator with her uncle's help, starts delivering bread to two schools that the supermarket does not serve, and asks customers which loaves they want. A year later she employs three people. (Illustrative case: the people and events are invented.)

Think about it: the two faced the same events. What was different about the two people?

Definition

Entrepreneurial qualities: the personal characteristics, attitudes and habits that help a person start a venture and keep it going through uncertainty and setbacks. Research has linked several of them with entrepreneurs, though no single quality guarantees success, and most can be strengthened with practice.

What research says

Quality	Meaning	Where the idea comes from	In Umutoni's case
Need for achievement	A strong drive to do things well and to meet challenging standards	David McClelland, The Achieving Society, 1961	She wants to beat her own sales targets
Internal locus of control	The belief that results depend mainly on one's own actions, not on luck or others	Julian Rotter, 1966	"What can I change?" rather than "it was bad luck"
Moderate risk-taking	Choosing challenges that are neither too safe nor too wild, and reducing risk with information	John Atkinson, 1957; McClelland	A small generator, not a second bakery
Self-efficacy (self-confidence)	Belief in one's ability to carry out a particular task	Albert Bandura, 1977	She believes she can win the school contracts
Persistence (grit) and resilience	Keeping effort and interest towards long-term goals; recovering from setbacks	Angela Duckworth, Grit, 2016	She keeps going after a bad month
Initiative	Acting before being told; seeing what needs doing	Common to most studies of entrepreneurs	She finds the schools herself
Flexibility	Changing plans when evidence shows a better way	Common to most studies	She changes products and customers
Integrity	Honesty and keeping promises	Lesson 1 of this unit	Schools trust her deliveries

Definition

Locus of control: where a person believes control over their life lies. With an internal locus of control, a person believes that outcomes depend mainly on their own effort and decisions; with an external one, that outcomes depend mainly on luck, fate or other people. Example: "I failed because I did not revise" (internal) against "I failed because the exam was unfair" (external).

Why achievers prefer moderate risks

John Atkinson's model of risk-taking (1957) explains why people with a high need for achievement choose challenges of medium difficulty. For such a person, the pull of a task grows with both the chance of success $P$ and the satisfaction of succeeding, which is greater when the task is harder, about $1 - P$ . Their product,

\text{pull} \propto P(1 - P),

is largest when $P = 0.5$ .

Tip

Qualities are habits you can train. To build an internal locus of control, after every setback write down one thing you could do differently. To build persistence, set small weekly targets and record them. To build self-efficacy, start with tasks you can succeed at, then raise the difficulty.

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Worked example 1: comparing three challenges

Umutoni considers three targets for next month: (A) sell to 1 new school, which she is almost sure to do, $P = 0.9$ ; (B) sell to 3 new schools, $P = 0.5$ ; (C) win the contract for every school in the district, $P = 0.1$ . Use Atkinson's model to find which target is most motivating for a high achiever.

A: \ 0.9(1 - 0.9) = 0.9 \times 0.1 = 0.09

B: \ 0.5(1 - 0.5) = 0.5 \times 0.5 = 0.25

C: \ 0.1(1 - 0.1) = 0.1 \times 0.9 = 0.09

Interpretation: B scores 0.25, almost three times A or C. Target A is too easy to feel like an achievement; target C is so unlikely that it does not feel worth the effort. Entrepreneurs with a high need for achievement set stretching but reachable targets, which is also what the "Achievable" in SMART goals (Lesson 4) means.

Worked example 2: persistence in numbers

From experience, about 15% of the shops Umutoni visits agree to stock her bread. How many shops must she visit to win 12 new customers? After 20 visits she has 3. Is she on track? (Illustrative figures.)

\text{Visits needed} = \frac{12}{0.15} = 80

\text{Success rate so far} = \frac{3}{20} = 0.15 = 15\%

Interpretation: 17 of her first 20 visits were refusals, yet she is exactly on track. Someone who expects most visits to succeed would give up; someone who knows the numbers sees refusals as part of the process. Persistence is easier when you measure it.

Warning

Two misreadings. "Entrepreneurs love risk": research suggests they prefer moderate, calculated risks and work to reduce them. "You are born with these qualities or you are not": most of them, such as persistence, confidence and initiative, grow with practice and experience.

TED: Angela Lee Duckworth, "Grit: The Power of Passion and Perseverance". Listen for her definition of grit and for what she says about the link between grit and talent.

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Practice

Explain four personal qualities that support entrepreneurship, with an example of each.
Distinguish between an internal and an external locus of control, and classify: (a) "The customer left because my prices were too high"; (b) "Business is all about luck"; (c) "I will learn to keep accounts so this does not happen again".
Using Atkinson's model, calculate the pull $P (1 - P)$ for $P = 0.3$ and $P = 0.7$ . What do you notice?
A salesperson wins 1 customer in every 8 visits. How many visits are needed to win 15 customers?
Explain why entrepreneurs are said to prefer moderate risks rather than high risks.
Choose two qualities you would like to strengthen and describe a practical way to train each.
"The most important quality of an entrepreneur is talent." Evaluate this statement, using the case of the two bakers.

Show answersHide answers

Any four, e.g.: need for achievement (sets challenging sales targets); internal locus of control (looks for what she can change); persistence (keeps visiting shops after refusals); initiative (finds new customers without being asked); flexibility; integrity; self-efficacy; moderate risk-taking.
Internal: believes outcomes depend on one's own actions; external: on luck or others. (a) Internal; (b) external; (c) internal.
$0.3 \times 0.7 = 0.21$ and $0.7 \times 0.3 = 0.21$ . They are equal: the model is symmetric about $P = 0.5$ , where the pull is greatest (0.25).
Success rate $= \frac{1}{8} = 0.125$ ; visits $= \frac{15}{0.125} = 120$ .
Low-risk tasks give little sense of achievement and little profit; very high risks are likely to fail and could destroy the business. Moderate risks are challenging but reachable, and can be reduced further with information and planning.
Answers vary; good answers name a quality and a specific, repeated practice (for example, presenting at every club meeting to build confidence).
Against: both bakers had similar skills; the difference was in qualities such as internal locus of control, persistence, initiative and flexibility. Talent helps, but research by Duckworth and others suggests sustained effort matters at least as much. A good answer concludes that qualities and habits often decide success.

Quick check

"I lost the contract because my samples arrived late; next time I will deliver them a day early." This shows:

Key points

Qualities linked with entrepreneurs include need for achievement, internal locus of control, moderate risk-taking, self-efficacy, persistence and resilience, initiative, flexibility and integrity.
Atkinson's model: the pull of a task for an achiever is about $P (1 - P)$ , greatest at $P = 0.5$ : stretching but reachable goals.
Measuring effort (visits, success rates) makes persistence easier.
Most qualities are habits that can be trained; none guarantees success alone.

Sources and credits

Image: Tailor Lady, IGANZE, 2024, via Wikimedia Commons, CC BY-SA 4.0.
Video: Grit: The Power of Passion and Perseverance, Angela Lee Duckworth, TED, embedded from YouTube.

Written by Ganzaa: the Nyagatare bakers' case, the risk-taking graph (from Atkinson's published model), the tables, the worked examples and the practice items. The research findings are summarised in Ganzaa's own words. The people and figures are illustrative (2026).

This lesson adapts CC BY-SA material and is shared under CC BY-SA 4.0.

1Case: two bakers, one bad month

2What research says

3Why achievers prefer moderate risks

Case: two bakers, one bad month

What research says

Why achievers prefer moderate risks