Motivations, business planning, and risk management

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RAIRevistadeAdministraçãoeInovação14(2017)140–150

Motivations, business planning, and risk management: entrepreneurship among university students

Aleciane da Silva Moreira Ferreira

^∗

, Elisabeth Loiola, Sônia Maria Guedes Gondim

UniversidadeFederaldaBahia(UFBA),Bahia,BA,Brazil Received14April2016;accepted19December2016

Availableonline17March2017 ScientificEditor:FernandaCahen

Abstract

Theobjectiveofthisstudywastocomparemotivationsforentrepreneurship,businessplanning,andriskmanagementbetweentwogroupsof universitystudents:thosewhoalreadyhadabusiness(experiencedentrepreneurs)andthoseintendingtostartone(potentialentrepreneurs).A totalof424undergraduateandgraduatestudentsparticipatedinthesurveystudy.Descriptiveandinferentialanalyseswereconductedtocompare thegroups.Theresultsindicatethattheentrepreneurialmotivationsofpotentialstudententrepreneursarehigherthanthoseofexperiencedstudent entrepreneurs.Intheprocessofcreatingthebusiness,itwasshownthatbothgroupsofstudentsarecautiousaboutmanagingbusinessrisks,but thegroupofpotentialstudententrepreneursappearedmoreconcernedwiththebusinessplanthantheexperiencedgroup.

©2017DepartamentodeAdministrac¸˜ao,FaculdadedeEconomia,Administrac¸˜aoeContabilidadedaUniversidadedeS˜aoPaulo–FEA/USP.

PublishedbyElsevierEditoraLtda.ThisisanopenaccessarticleundertheCCBYlicense(http://creativecommons.org/licenses/by/4.0/).

Keywords: Entrepreneurialmotivations;Businessplanning;Riskmanagement;Universitystudents

Introduction

Sincethe1990s,interestintheentrepreneurshiptrainingof universitystudentsinBrazilianhighereducationinstitutionshas beencontinuallyincreasing.Politicians anduniversityleaders havebeguntorealizetheimportanceoftreatingentrepreneur- shipasanacademictrainingarea.ThefocusofBrazilianhigher educationstrictlyonthetrainingoffuturequalifiedemployees hasalreadyproveninsufficientgiventhecountry’sneeds(Lima, Lopes,Nassif,&Silva,2011).

Thereisevidenceintheliteraturethatentrepreneurshipedu- cationhashelpeduniversitystudentsdeveloppositiveattitudes towardentrepreneurshipandincreasedtheirpositiveperception of businessviability(opportunityanalysis)(Bae,Qian,Miao,

&Fiet,2014).Inshort,themaximumuseofskillsandtalents,

∗Correspondingauthor.

E-mails:alecyane@yahoo.com.br(A.S.Ferreira),beteloiola10@gmail.com (E.Loiola),sggondim@gmail.com(S.M.Gondim).

PeerReviewundertheresponsibilityofDepartamentodeAdministrac¸ão, FaculdadedeEconomia,Administrac¸ãoeContabilidadedaUniversidadede SãoPaulo–FEA/USP.

the perceptionof controlover thefuture, thepositiveattitude towardlearningnewthingsandputtingcreativityintopractice, fearofunemployment,personalvalues,thesearchforautonomy, financialindependence,andself-actualization,plustheidealof fulfilling asocial mission, are furtherindividual reasons that leaduniversitystudentstotakeontheirentrepreneurial career (Barba-Sánchez&Atienza-Sahuquillo,2012).

Althoughtheresultsofresearchonthemotivationandrea- soningthatleadscollegestudentstofollowtheentrepreneurial career path indicate a set of personal and contextual vari- ables that, hypothetically, explain the entrepreneurial career choice of college students in general, little is known about the differences in the influence of such variables among experienced entrepreneurialstudents,non-entrepreneurial stu- dents,andstudentswhoarepotentialentrepreneurs.Behavioral and attitudinal differences between entrepreneurs and non- entrepreneurshavelongbeenthesubjectofresearch.Empirical andtheoreticalresearchcomparingexperiencedentrepreneurs, newentrepreneurs,non-entrepreneurs,andmanagersisempha- sized here, considering that studies of this nature focused on university students were not located in a bibliographic search.

http://dx.doi.org/10.1016/j.rai.2017.03.003

1809-2039/©2017DepartamentodeAdministrac¸˜ao,FaculdadedeEconomia,Administrac¸˜aoeContabilidadedaUniversidadedeS˜aoPaulo–FEA/USP.Published byElsevierEditoraLtda.ThisisanopenaccessarticleundertheCCBYlicense(http://creativecommons.org/licenses/by/4.0/).

The study by Carland, Hoy, Boulton, andCarland (1984) explores, based on Schumpeter (1934) and on results from otherstudies,thedifferencesbetweenentrepreneursandsmall business owners,proposinga conceptualframework that dif- ferentiates them. In this framework, pro-innovation behavior is a critical factor in differentiating entrepreneurs from non- entrepreneurial managers, on the one hand, and from small businessowners,ontheother.

Contrary to many studies on entrepreneurship, Gartner (1985), a classic in the field of entrepreneurship studies, warnsthatinadditiontothedifferencesbetweenentrepreneurs and non-entrepreneurs, there are also differences among the entrepreneursthemselves.Basedonabibliographyreview,that authoridentifiessixactivitiescommontoentrepreneurs:find- ingbusinessopportunities,accumulatingresources,introducing products andservicesinthe market, manufacturingproducts, establishingorganizations,andrespondingtotherequirements ofsociety andof governments. Allof theseactivitiesinvolve risk,demandsomelevelofplanning,andcanalsohelpreveal thediversityamongentrepreneurs.

ThestudybyBaronandEnsley(2006),forexample,showed thatexperiencedentrepreneursidentifyandexploremorebusi- ness opportunities than novice entrepreneurs. The study by Hooks(2010) compared attitude,leadership, innovation, per- ceived control, and self-confidence of new and experienced entrepreneurs, and how these are related to satisfaction with life.Itfoundthatnewentrepreneurshavemoresatisfactionwith lifeandthattheexperiencedonesseethefailuresofthepastas anopportunityforgrowth.ThestudybyWalterandHeinrichs (2015)alsopointsouttheexistenceofdifferentcognitivepro- cessesbeforeandafterstartingabusiness.

The literatureshows that propensity for risk is oneof the main personal attributes of the individual entrepreneur. This belieffindssupportintheories ofpersonaltraits,whosemain proponentisMcClelland(1961).Butinspiteof thewidedif- fusion of this vision, the research results indicate a broader picturestillmarkedbycontradictions.Theworkonriskpropen- sitythat becamea reference, andoneof the mostconsulted, wasthatofBrockhaus(1980).UsingKogan-Wallach’schoice dilemmasquestionnaire,theauthorconcludedthatriskpropen- sity might not be a specific characteristic of entrepreneurs.

In contrast, Carland, Carland, and Pearce (1995) compared entrepreneurs,managers,andsmall businessownersandcon- cludedthatentrepreneurspossessagreaterpropensityforrisk.

The results of the meta-analysis study by Stewart and Roth (2001) are in line withCarland, Carland, andPearce’s (1995)findings,suggestingthatentrepreneurs’riskpropensity isgreaterthanthatofmanagers/bosses.Inaddition,theresults revealeddifferencesbetweenentrepreneurs:theriskpropensity ofentrepreneurs whofocus onbusiness growthas theirmain objectiveishigherthanforthosefocusedongeneratingfamily incomeastheirmainbusinessobjective.

In comparing Brazilian andPortuguese entrepreneurs, the researchcarriedoutbySilva,Gomes,andCorreia(2009)showed thatalthoughBraziliansrejectuncertaintiesmore,theypresent higherriskpropensitythanthePortuguese.Thepropensitywas measured by the ability to “makedecisions andtake actions

without the sureknowledge of results”(p. 69). Becauserisk propensityandaversiontouncertaintyarecorrelatedconcepts, the cross-reading of these results reveals how much of the perceived uncertainty the entrepreneur accepts and exposes him/herselfto(calculatedrisk),inexchangeforareturn.

In addition to risk management, business success among potential entrepreneurs or experienced entrepreneurs also depends on planning, as both can influence market anal- ysis, return on investment, experimentation, and flexibility (Sarasvathy,2001).Risk managementandplanning arelittle- exploredconceptsinresearchonentrepreneurshipinBrazil.The internationalliteratureadvancesalittlefurtherinthediscussion ofplanning,byfollowingSarasvathy’s(2001)promisingpath,or byembracingtraditionalapproachestoplanning,whichreduce ittothepreparationofbusinessplans,especiallyinentrepreneur- shiptrainingprograms.

Theresearchwhoseresultsarepresentedinthisarticlebegan from the premise that risk management, the motivations for anentrepreneurialcareer,andbusinessplanningareimportant variablesforunderstandingentrepreneurship.Italsosupposed thatstudyingthesevariablesbycomparinggroupsofpotential entrepreneurs and experienced entrepreneurs, in the univer- sitycontext,wouldhelptoidentifydifferencesbetweenthese groups.Studiesindicatethatyoungpeoplearethemainactors ofentrepreneurshipinBrazil(GlobalEntrepreneurshipMonitor -GEM,2015).Inaddition,thepresentstudygoesfurtherasit fillsatheoreticalgapintheinterpretationoftheweightoflittle- exploredindividualvariables(planning,riskmanagement)inthe entrepreneurialactions(Salusse&Andreassi,2016)ofuniver- sitystudents,whoarealreadyentrepreneursorwhorevealtheir intentiontobecomeentrepreneurs.Inthepracticalcontext,the studycontributestothegenerationofrecommendationsforbet- terpracticesandpolicies–includingpublicpolicies–aimedat improvingcompetenciesandresourcesofhighereducationinsti- tutionstobetterpreparefutureprofessionals,especiallythose whowilltakeonsomekindofentrepreneurialinitiative.

Theoreticalsupport

Motivationsguidingstudents’entrepreneurialcareers

Themotivationsforstartingabusinesshavebeenrelatedto economicfactors(Schumpeter,2002),thesearchforopportuni- tiesinthecompetitivemarket(Shane&Venkataraman,2000), thelackof,ordissatisfactionwith,jobopportunities(Kautonen

&Palmroos,2010),andeventotheneedforself-actualization (McClelland, 1965). Although McClelland’s model predicts othertypesof motivationssuch astheneedfor affiliationand power, various empirical studies(Barba-Sánchez &Atienza- Sahuquillo,2012;Sivarajah&Achchuthan,2013)pointoutthat theneedforachievementisthestrongestamongthoseintheir models.

Theneedforachievementcanbedefinedasapatternofmoti- vation that revealsself-confidence,great initiative, guidedby clearly established goals, assuming moderate responsibilities and risks, and favoring situations that can provide feed- backforperformanceimprovement(McClelland,1961).Such

characteristicsarestronglyassociatedwiththeentrepreneurial profile(Aschuler,1967).Afewyearslater,McClelland(1965) proposed ways to develop the need for achievement among young people,whichcanbesummarizedon fourfronts:goal setting(encouragingyoungpeopletotakeonresponsibilities), motivesyndrome(promotingtheintegrationofthinking,action, andcontext,allowingyoungpeopletoadjusttheirgoalstothe particular situation in whichthey find themselves), cognitive supports (promoting intense reflections so young people can connecttheirmotivestotheiractualreality),andgroupsupports (usethegrouptopromotebetterinsightsandprovidefeedback).

Universitystudentswanttoachievegoalsthatarechalleng- ing,as well as overcome obstacles,whichallow themtosee theirsuccessasaresultoftheirownactions.Thesuccessfuluse ofskillsacquiredthroughouttheiruniversityeducation(Frese, Rousseau,&Wiklund,2014;Olufunso, 2010;Padachi,2006) heightens their personalcapacity for learning a repertoire of knowledge,attitudes,andbehaviorsthatstrengthen theirself- confidence.Theyfeeluncomfortablewhentheyfailtoputthis theoreticallearningintoeffectasemployees,andtheopeningof anewbusiness(whetherforprofit,notforprofit,ormixed)isa promisingroutetothisachievement.

Althoughtheneedforachievementisperceivedasthemost importantmotivationamongscholars,thecurrentworldsitua- tionleadsstudentstoincludeothermotives,suchassocialones, asawayofcontributingtosolidarityintheworld(Omorede, 2013),tosocialjustice, andtoprotectionof the environment (Bornstein,2004).ThisperspectiveconvergeswithwhatSmith andWoodworth(2012)callsocialentrepreneurship,which,in short,aimsatimprovingsocietyingeneral.Thefinancialreturn, althoughitmotivatesthestudents,hasnotbeenassociatedwith theirprincipalmotivations(Lima,Nassif,Lopes,&Silva,2014).

Family context (Almeida & Teixeira, 2014; Sivarajah &

Achchuthan,2013)andacademiccontext(Kacperczyk,2013) also contribute to the decision to pursue an entrepreneurial career. The networks serve as a type of social capital (Granovetter, 2005) and are fundamental inthe creation and supportofthebusiness(Vale&Guimarães,2010),inlinewith McClelland’s(1965)thinking,inaddressingtheneedtobelong toagroupatthesametimeasthereisconcernaboutmeetingits needs.

Motivationsmayalsobeinfluencedbyculture,region,gen- der,andethnicity(Shane,Kolvereid,&Westhead,1991).Inthe UnitedStates,forexample,morementhanwomenarestarting anentrepreneurialcareer(Reynolds,Carter,Gartner,&Greene, 2004), unlike Brazil, whose GEM data for 2014 points to a greaterpresence ofwomenatthisinitialstage(51%),as well asregionaldifferences(Almeida,2013).InMalaysia,Akmaliah andHisyamuddin(2009)foundthatcommunitysupport,inter- est,andhighself-esteemmotivatedthe entrepreneurialcareer ofstudents.InChina, Mexico,andtheUS,independenceand risk-propensityweretheprincipalmotivesforself-employment, particularlyin theUS, withindividualand contextualfactors moreconducivetoentrepreneurship(Wang,Prieto,Hinrichs,&

Milling,2012).

From the motivationslisted, it is clear that the processof business creationdepends onpersonal, social,andcontextual

motivations,andtheirintensity(Valencia,Restrepo,&Restrepo, 2014).Thesemotivesinteractwitheachotherandguideplans andgoals(Sivarajah&Achchuthan,2013).Motivation, how- ever,isnotastaticstate,asthestimulithatmovepeoplechange throughout life.What motivates the creation of the business, for example, mayundergo changes duetoacquired practical experienceandadversefactors.

Businesscreation–businessplanningandriskmanagement

Businessplanningusuallytakesplacethroughsystematiza- tionofideas,suchasthebusinessplan,asetofwrittendocuments modelingthefutureofanenterprise(Carvalho,2009;Testa&

Frascheri,2015).Thisalsohelpspeopletoinitiate,maintain,and evaluatetheactionsneededtoachievethegoal(Frese,2009).

The study by Santos and Silva (2012) concluded that the businessplanisaguidethatassiststheentrepreneurinmanage- ment,includinganumberofmodelsadaptedtodifferentbusiness realities.Variouspositiveeffectsofthebusinessplanweresum- marizedbyDelmarandShane(2003),withemphasison:speed indecisionmaking,anticipationofinformationflaws,resource management, business feasibility analysis, and improvement of communication internal and external tothe business. The meta-analysisbyBrinckmann,Grichnik,andKapsa(2010)also showedthatthebusinessplanincreasestheperformanceofthe business.

Although studiesonbusiness planningamongstudentsare not common,thereis arelativeconsensusthat such planning isindispensableintheprocessofformulatingandcreatingthe business(Botha&Robertson,2014,Sebrae,2012).Itisrecog- nized, however,that thereisa debateinthe entrepreneurship fieldaboutthevalueofthebusinessplan(Chandler,Detienne, Mckelvie,&Mumford,2011;Delmar&Shane,2003).While onegroupofresearchersperceivesitasafundamentalactivity forsuccessincreatingabusiness,othersquestionthisassertion (Gruber, 2007),consideringthehighlevelsof uncertaintyand volatilityinthestartups’environments.

Alongtheselines,twoapproachestoplanningarediscussed inthe literature(Sarasvathy,2001).Oneabout causes(causa- tion)takesintoaccountthetraditionalparadigmofelaborating detailedplans,anditsrelevancetothebusiness.Theotherabout effects (effectuation)reverses this traditional logic andintro- ducestheparadigmofexperimentation,thatis,oftryingdifferent marketentryperspectivesbeforechoosingabusinessconcept.

Theeffectuationapproachfollowsalogicthatallowsthestudent totakeadvantageofcontingentopportunities,acceptlosses,and explorestrategicalliances.Thereisarecognitionthatfailures arepartofbusinesssuccess,andrealitiescanbereconstructed byexploringnewopportunities(Sarasvathy,2008).

Somestudiesconcludethatsuccessfulentrepreneursaremore able to manage risk (Botha & Robertson, 2014), since the positiveoutcome of entrepreneurial venturesalso dependson financial management andthe availability of workingcapital (Padachi,2006).Inaddition,itinvolvesagreatvarietyofskills instrategy,accounting,legalandtechnicalknowledgeimportant inrunningthebusiness(Almeida,2013).

Risk management also takes into account other aspects suchastechnologicalrequirements,markets,scenarios,current andfuturecompetition,financialprojections,currentlawsand regulatoryprocesses, socioeconomicenvironment, andpoliti- cal interference (Braga, 2012). Although cognitive skills are assumedtobeinvolvedinriskanalysis,suchasassessingwhich lossesareacceptableandwhentostopincaseoffailure(Baron

&Ensley,2006),thisprocessseemstobemoreclearlydefined byexperiencedentrepreneurs(Matlin,2005),suggestingthatthe largersocialcontextmaycontributetothedevelopmentofsuch skills.

Theargumentspresentedinthissectionemphasizetheimpor- tanceof planningandrisk managementforunderstandingthe behavior of entrepreneurs, and justify comparative empirical studiessuch as whatwill be reportedhere, helping togather evidenceondiversityandheterogeneityamongentrepreneursin specificcontexts,suchastheuniversity.

Potentialandexperiencedentrepreneurs

Potentialentrepreneursarethosewhointend tostartanew businessorexpecttobeinthesituationofownersorpartnersofa newcompany(Sieger,Fueglistaller,&Zellweger,2014).Expe- riencedentrepreneursarethosewhohaveownedabusinessfor morethanfouryears(Hooks,2010),or havebeenestablished for morethan threeand ahalf years(GEM, 2015).The rea- sonsthatleadtothecreationofanewbusinessappearsimilar betweenentrepreneurs intending to starttheir businesses and thosewhoalreadyhavethem,reasonssuch asfinancial secu- rity,independence,self-actualization,andautonomy(Reynolds etal.,2004).However,potentialentrepreneurstendtooveres- timatetheirskills,motivations,andefforts(Gartner&Shaver, 2002).

Satisfactionwithlifealsodiffersbetweennewentrepreneurs, thosewhoareintheundertakingforlessthanthreeyears,and thosewithexperience,whohavebeeninbusinessformorethan fouryears(Hooks,2010).Thisisprobablybecauseofthenovelty ofthebusiness,thefreedomtoexpressinnovativetendenciesand putacquiredknowledgeintopractice,ratherthantheimmediate financialreturn(Krueger&Carsud,1993).

Experiencedentrepreneurs,however,takeadvantageoffind- ingandcreatingopportunitiesandhaveamoreaccuratesystemic viewofpotentialrisks(Baron&Ensley,2006).Newandpoten- tialentrepreneursevaluateopportunitiesintuitivelywithafocus onnovelty(Azoulay&Shane,2001),andmayfailtodevotesuf- ficientattentiontovariousfinancialandcommercialfactorsthat impedethesuccessofnewventures.Experiencedentrepreneurs concentrate efforts on factorsrelated to financial results and reject ideas for new products or services that suggest non- manageablerisk(Baron&Ensley,2006).Theintensedevotion ofonewhoisbeginninganentrepreneurialcareercanalsounder- minedecisionmaking,sincetheabilitytothinksystematically andcarefully evaluate information canbe reduced (Ruder &

Bless,2003).

Itispresumed,then,thatpotentialentrepreneurstendtobe moreimpulsiveand“fallinlovewiththeirownideas”,sustain- ingtheirexcessenthusiasmandoptimism.Nevertheless,intense

affective states can contribute to creativity andto systematic thinking(Forgas,2004).Thiscapacitytothinksystematically andcarefully evaluate informationcan be developedthrough learningprocessesrelatedtogainingexperience.

In summary, this section on theoretical support presented the main concepts used in the study and included empirical evidence on the differences between experienced and poten- tialentrepreneursregardingmotivations,riskmanagement,and theplaceofthebusiness plan(beforeor afterbusinessexper- imentation).The comparison betweennewentrepreneurs and experiencedentrepreneursinthecontextoftheuniversitytrain- ingfocusofthisstudymayhelpbringoutnewevidenceabout such differences, contributing to the advancement of knowl- edgeaboutvariablesthatexplainthediversityofentrepreneurial behavior.

Method

This is a cross-sectional comparative study, using an electronic survey. It is an excerpt from the Global Uni- versity Entrepreneurial Spirit Students’ Survey – GUESSS (http://www.guesssurvey.org/),¹ an international survey that covered34countriesin2013/2014,includingBrazil.Itsmain objectiveistotrackperceptualindicatorsofindividualandcon- textuallevelvariablesoftheuniversityenvironmentrelatedto entrepreneurshipamonghighereducationstudents.

TherelevanceofdoinganexcerptoftheGUESSSstudystems fromitbeingcarriedoutwithuniversitystudentsandbecause the GEM(2015)indicatesthat youngpeoplebetween25and 34yearsarethelargestgroupofBrazilianentrepreneurs.Thus, itisbelievedthattheuniversitywouldbethepreferredcontext forentrepreneurial learning.Studiesdevelopedinthiscontext wouldcontributetogreateralignmentbetweenthetheoryand thepracticeofentrepreneurship.

Participants

The participantswere studentsfrom apublicuniversity in northeasternBrazilwhointendedtohaveabusinesswithinone year(M=12.42;SD=7.86)andthosewhoalreadyhadonefor fiveyears(M=5.95;SD=3.44),(344and80respectively),total- ing424respondents,278beingsingleordivorced,146married, 215weremales,andwithameanageof27years(SD=6.11).

Asforthedistributionbydegreeprogram,18%werefrommed- icalandhealthsciencesprograms;16%fromengineeringand architecture;10%from socialsciences;6%law;5%arts;5%

from management and business, and40% did not specify or markedthe“other”option.Regardingacademic performance, 31%describeditaswellaboveaverage,35%asaboveaverage, and27.4%asaroundaverage.

1 TheGUESSSprojectisledbytheSwissInstituteforSmallBusinessand EntrepreneurshipoftheUniversityofSt.Gallen(KMU-HSG).Foreachpar- ticipatingcountrythereisarepresentativeresponsibleforcoordinatingdata collection.

Astotheircontactwithentrepreneurshipcourses,77%stated theyneverhadcontact,while23%hadtakenatleastonecourse.

Fromthesametotalofrespondents,32%statedthatneitherpar- entownedtheirownbusiness,and40%hadatleastone,orsome otherfamilymember,connectedtoentrepreneurialactivity.Also from the total, 47% reported working, averaging 31.98hours worked per week (SD=12.11). Regarding educational level, 70%wereundergraduates.

GUESSSBrazilinstrument

The instrument has 12 blocks of questions: (a) student’s personal data; (b) degree area; (c) career choice intentions;

(d) reasons for career choice; (e) entrepreneurial learning environment; (f) student’s entrepreneurial profile; (g) family experiences;(h)socializationprocessesineachcountry;(i)busi- nessplanning; (j)generalinformationabout thebusiness;(k) informationonfamilybusinesses;(l)specificquestionsforeach countrywherethestudyisapplied.

Forthe purposesof thiscomparative study,two groupsof items wereconsidered:relatedtotheindividual businesscre- ationprocess(10items)andindividualmotivations(18items), withtheitemsmeanttobeansweredbystudentswhohadalready startedaventurefive yearsbefore,andbythoseintending to startonewithinayear.Thisdecisionmadeitpossibletocon- ductthe comparative study proposedhere, andwhose results arepresented andanalyzed.The importanceof theconstructs chosenintheentrepreneurshipfieldofstudyhasalreadybeen fullyexplainedintheintroductionandinthetheoreticalsupport section.

Datacollectionprocedures

Attheendof 2012,e-mail invitationswere sentto23,000 students enrolled ina federal higher education institution in northeasternBrazil.Incompliancewithethicalprinciples,par- ticipation in the research was voluntary, with 2999 students providingresponsestotheinstrument.Giventhefocus ofthe researchandthevariablesstudied,thesampleofthiscompar- ativestudyincluded424students,whoseprofilewasdescribed intheparticipantssection.

Handlingoftheitemgroups:businesscreationand motivations

The10itemsrelatedtothebusinesscreation (seeTable1) weresubmittedtoexploratoryfactoranalysis(EFA)andgrouped into two dimensions: business plan (5 items) and risk man- agement (5 items), explaining 55.60% of the variance. The Kaiser–Meyer–Olkincoefficient(KMO=0.762)andBartlett’s testofsphericity[c2(45)=1303.399;p<0.01]indicatethatthe measureisfactorable.

The18itemsrelatedtoindividualmotivations(seeTable2) werealsosubmittedtoEFA(ExploratoryFactorAnalysis)and grouped into four dimensions, defined as: social motivations (6 items), group motivations (5 items), financial motivations (4 items), and managerial motivations (3 items), explaining

67.64% of the variance, with the Kaiser–Meyer–Olkin coef- ficient (KMO=0.854) and Bartlett’s test of sphericity [c2 (153)=3247.842;p<0.01].

Dataanalysisprocedures

Descriptive analysis,exploratoryfactoranalysis,andcom- parativeanalyseswererunusingSPSS(StatisticalPackagefor theSocialSciences,version21).Measurementsofcentralten- dency (mean) andstandard deviation (SD) were used in the descriptiveanalyses.Forthecomparativeanalysis,thet-testwas used for independent samples. Pearson bivariate correlations evaluatedthestrengthoftherelationshipsbetweenvariables.

Results

The results are divided into sections, according to the objectivesofthestudy.First,descriptionsarepresentedthatchar- acterizethetwogroups(potentialandexperienced)inrelation tothevariables.Then,thecomparisonsbetweengroups.

Principalmotivations,businessplanning,andrisk managementofpotentialandexperiencedentrepreneurs

Table3presentsthemeans,standarddeviations,andcorrela- tionsbetweenthestudyvariables.

The studyvariablesare positivelycorrelated. Management motivations (developing personalmanagement skills)present higher means amongall surveyed college students (potential andexperienced)thanthemeansforsocial(maketheworldbet- ter), financial(make moneyandgetrich),andgroup(support anddevelopmygroup)motivations,citedindescendingorder of the valueof their means.On the two dimensions of busi- nesscreation,riskmanagementhasahighermean(highermean signifies less riskybehavior atthe startof thebusiness) than planning.

Comparingpotentialandexperiencedentrepreneursin theirmotivationsandinbusinesscreation

Table 4 presents the results of motivations and business creation,comparingpotentialentrepreneurstudentsandexperi- encedones.

It is observed that the motivations oriented toward entrepreneurship (social, group,financial, andmanagerial) of potential entrepreneurspresenthighermeanvaluesthanthose ofexperiencedentrepreneurs.Itisalsoobservedthatthet-test showed differences between groups, reaffirming that poten- tial entrepreneurs are moremotivated thanexperienced ones:

socialmotivations(t(420)=4.57; p<0.001),groupmotivations (t(417)=3.49; p<0.001), financial motivations (t(418)=4.46;

p<0.001),managerialmotivations(t(413)=3.58;p<0.001).The effect sizes, Cohen’s d (1988),were consideredaverage and differ mainly in relation to social (d=0.651) and financial (d=0.624)motivations.

Regarding the creation of the business, risk management didnotdifferbetweenthetwogroups(t(415)=1.71;p<0.033),

Table1

Factorstructureofthebusinesscreationmeasure.

Items Factors

1 2

IamcarefulnottoinvestmoreresourcesthanIcouldaffordtolose 0.810 0.148

IadaptwhatI’mdoingtotheresourcesIhave 0.808 0.359

IamcarefulnottoriskmoremoneythanIamwillingtolose 0.807 0.152

Iamflexibleandtakeadvantageofopportunitiesastheyarise 0.657 0.338

Iletbusinessevolveasopportunitiesarise 0.651 0.259

Iresearchandselecttargetmarketsanddocompetitiveanalysis 0.245 0.855

Iestablishandplanproductionandmarketingefforts 0.244 0.848

Iestablishandplanbusinessstrategies 0.332 0.812

Theplannedproduct/serviceissubstantiallydifferentfromwhatIinitiallyimagined 0.114 0.561

IamtryingdifferentapproachesuntilIfindabusinessmodelthatworks 0.243 0.490

Cronbach’sAlpha 0.80 0.76

Eigenvalues 3.7 1.8

Explainedvariance 36.97 18.63

Skewness −0.933 −0.355

Kurtosis 0.653 −0.232

Meanofthefactors 5.57 4.47

Note:Extraction:principalaxisanalysis.Rotation:Oblimin.1:Riskmanagement;2:businessplanning.

Table2

Factorstructureoftheindividualmotivationsmeasure.

Items Factors

1 2 3 4

Maketheworldabetterplace 0.815 0.403

Solvesocialproblemsthatprivatecompaniesusuallycannothandle 0.788 0.273 −0.121

Playaproactiverolebychangingthewaytheworldworks 0.787 0.254 −0.123

Beacitizenwhoishighlyresponsibleforourworld 0.718 0.466

Convinceothersthatprivateenterpriseistrulyfittodealwiththetypeofsocial challengemybusinessisabout

0.692 0.257 0.188

Haveastrongfocusonwhatmybusinesscanachieveforsocietyingeneral 0.556 0.445 0.326

HaveastrongfocusonthegroupofpeoplewithwhomIstronglyidentify 0.146 0.877 0.140

SupportandadvancethegroupofpeoplewithwhomIstronglyidentify 0.302 0.795 0.213

Offeraproduct/servicethatisusefultoagroupofpeoplewithwhomI stronglyidentify

0.161 0.735 0.247

SolveaspecificproblemforagroupofpeoplewithwhomIstronglyidentify 0.479 0.595 0.174 −0.277 PlayaproactiveroleinshapingtheactivitiesofagroupofpeoplewithwhomI

stronglyidentify

0.481 0.566 0.213 −0.149

Makemoneyandgetrich 0.785

Advancemycareerinthebusinessworld 0.764 0.192

Establishastrongcompetitiveadvantageandperformsignificantlybetterthan otherbusinessesinthesameareaofactivity

0.132 0.723 0.291

Haveastrongfocusonwhatmybusinesscanmanagetodoversusthe competition

0.194 0.700 0.411

Tohavefullyanalyzedthefinancialpossibilitiesformybusiness 0.114 0.116 0.273 0.789

Runmybusinessbasedonsoundmanagementpractices 0.130 0.381 0.684

BeabletoexpresstomyclientsthatIfundamentallysharethesamevalues, interests,andwayofunderstandingthingsastheydo

0.434 0.258 0.165 0.485

Cronbach’sAlpha 0.87 0.84 0.77 0.74

Eigenvalues 6.5 3.0 1.63 1.15

Explainedvariance 36.08 16.11 9.03 6.40

Skewness −0.866 −0.627 −0.823 −1.16

Kurtosis 0.111 −0.103 0.441 1.30

Meanofthefactors 5.11 4.91 5.06 5.67

Note:Extraction:principalaxisanalysis.Rotation:Varimax.1:Socialmotivations;2:Groupmotivations;3:Financialmotivations;4:Managerialmotivations.

showingthatbotharecautiousinconducting business,avoid- ingrisk.Potentialentrepreneursinvestmoreinplanningactions (t(417)=4.73;p<0.001;M=4.64;SD=1.32)thandothosewith experience(M=3.69;SD=1.63)(Table4).

Discussion

Theresultsofthet-testclearlyindicatethattherearediffer- encesbetweenthegroupofuniversitystudentswhoarepotential

Table3

Correlationsbetweenfactors,includingmeanandstandarddeviation.

Mean SD 1 2 3 4 5 6

1.Socialmotivations 5.11 1.54 –

2.Groupmotivations 4.91 1.51 0.623^a –

3.Financialmotivations 5.06 1.39 0.195^a 0.330^a –

4.Managementmotivations 5.67 1.25 0.398^a 0.399^a 0.511^a –

5.Riskmanagement 5.57 1.21 0.163^a 0.218^a 0.344^a 0.400^a –

6.BusinessPlanning 4.47 1.43 0.293^a 0.327^a 0.340^a 0.349^a 0.323^a –

Note:BusinessCreation(5and6).^ap<0.001.Valuesbetween1and7.Riskmanagement:Highermeansignifiescautiousbehavior.

Table4

Comparisonbetweenpotentialandexperiencedentrepreneurs.

Dimensions t-Test Effect

T Df(gl) Potential Experienced Cohen’sd

M SD M SD

1.Socialmotivations 4.57^a 102.66 5.29 1.43 4.32 1.77 0.651

2.Groupmotivations 3.49^a 101.29 5.05 1.43 4.31 1.71 0.493

3.Financialmotivations 4.46^a 102.14 5.22 1.31 4.37 1.54 0.624

4.Managementmotivations 3.58^a 96.64 5.79 1.17 5.15 1.44 0.522

5.Riskmanagement 1.71 90.71 5.63 1.10 5.30 1.57 0.273

6.Businessplanning 4.73^a 98.0 4.64 1.32 3.69 1.63 0.685

Note:BusinessCreation(5and6).

ap<0.001.

entrepreneursandthegroupwhoareexperiencedentrepreneurs, withregardtomotivationandtobusinessplanning.

The socialandfinancial motivationsare what mostdiffer- entiate the groups of university students under study. Social motivationguidesthepotentialentrepreneurmorethantheexpe- riencedone.Thismaymeanthatalthoughsocialmotivationsand socialentrepreneurship areonthe rise(e.g.,Bornstein, 2004;

Omorede,2013;Smith&Woodworth,2012),theidealofcon- tributingtosocialjustice,forexample,diminishestotheextent necessary to ensure survival of the business (financial moti- vation). This is in keeping with the studies by Azoulay and Shane (2001) that highlight the idealization of the potential entrepreneur,who evaluates opportunitiesbased on intuition, focusing on their novelty, as compared to the experienced entrepreneur,whohasdealtwiththeproblemsofbusinessman- agementinpractice.

CorrespondingwiththefindingsofLimaetal.(2014),factors relatedtocareeradvancementandsocialcontributionsoutweigh thefinancialinterestsofthepotentialentrepreneur,anargument supportedbyMcClelland(1965),statingthatpeopleengagedin actionsthatachieveresults,suchassocio-environmentalchange, arenotmotivatedbymoneyinitself,butusemoneyasagood methodforsustainingtheleveloftheirachievements.

Potentialentrepreneurs modestlyidealize financialreturns, but the studentswho have alreadyundertaken a venture(the experienced)morefullygraspthechallengesofstayinginbusi- nessinpractice,andthustendtofocuseffortonfinancialsuccess factorsandrejectideasfornewproducts orservicesforbeing associatedwithnon-manageablerisks(Baron&Ensley,2006).

They take a concrete approach to competition and produc- tivity,andrecognize that immediatefinancial return doesnot

occurasidealized,sincethereareanumberofexternalfactors, in addition towell-designed and implemented workingcapi- talmanagement, thatcanpositivelycontribute tothe valueof the business(Padachi,2006).Thisinterpretationsuggeststhat theneedforself-actualizationisassociatedmorewithpotential entrepreneursthanwiththosewhoareexperienced.

The positions occupied by managerial and group moti- vation do not change in the two groups (first and fourth positionrespectively).Bothgroupsaremorestronglymotivated by management, suggesting that the university environment (contextual variable) helps create the expectation that what one learns must be tested when one creates or develops one’s own business. It also provides conditions for infor- mation to circulate, allowing management practices to be disseminated,inadditiontocreatingsharedexpectations(Lima et al., 2014; Olufunso, 2010). This interpretation converges with the statement by Frese et al. (2014) that the exchange and the pursuit of information by university students helps in the development of skills to lead people and manage businesses.

Groupmotivation,however,doesnothavethesameappealas managerialmotivation,whichcanbeexplainedbythedubious typeof socializationrelatedtoentrepreneurship:amixture of individualismandcollectivism.Evidenceintheliterature(e.g., Almeida & Teixeira, 2014; Granovetter, 2005; Kacperczyk, 2013;Limaetal.,2014;McClelland,1961;Vale&Guimarães, 2010)pointstothestrategicroleofthesocialnetwork(family, friends,community)inthecreationofthebusiness,byexercis- ingadoublerole:supportandinformationdissemination.This helpsinprovidingmodelstobefollowedandinidentifyingnew andattractiveopportunities.

Moreover, although the university environment facilitates tradesandexchanges,theentrepreneurialcultureismoreindi- vidualisticthangrouporiented.Thosewhomotivatethemselves to exercise business and management skills likely wish to demonstratetheirindividualresultsandsuccess,evenwhenfor contributinga social benefit. Thisinterpretation isechoed in thefactthat thedifferencesbetweenthe social,financial, and groupmotivationsarelessmarkedamongthegroupofexperi- encedentrepreneursthanthegroupofpotentialones.Business experience makes personalcharacteristics of the manager of the business gainemphasis, leaving othermotivations in the background.

Management requires a wide variety of skills instrategy, accounting,finance,legalandtechnicalexpertiseimportantin runningthebusiness(Almeida,2013).Asthestudentsarepre- sumedtobeeagertoputtheirmanagerial skillsintopractice, aspiring for self-actualization, such aspects gain strength in this process, especially among those who intend to become entrepreneurs(thepotentialones).

Withrespecttothecreationofthebusiness,thet-testresults show there is no difference between the groups regarding riskmanagement(t(417)=1.71;p<0.033),indicatingthatboth groupsarecautiousininvestingresources(highermeans,less riskybehavior),eventhoughstudiespointout(Baron&Ensley, 2006;Gruber,2007)thatmoreexperiencedentrepreneursdeal with risk in a manner different from novices. The study by Chandleretal.(2011),however,showsthataconservativepro- fileexistsamongstudents,whoinvestlessresourcesthanthey couldin ordertonot losemuch, andwhoexpect toadapt to opportunitiesthatarise.

TheGEM (2013)also indicatesthat, although50% of the Brazilianpopulationperceivegoodopportunitiesintheregion wherethey live and consider themselves capable of exploit- ingthem,theirriskpropensity(57.3%)isgenerallylowerthan thepopulationofothercountries(e.g.,China,USA,India,and Mexico).Oneofthepossibleexplanationsmaybetheinstabil- ityoftheBrazilianeconomy,whichmakesfinancialriskinfact somethingdangerousandfataltothebusiness,asBraga(2012) pointsout.

Theresultsalsosuggestthattheuniversityenvironmentmay beofferingfewexperiencesthatallowthestudenttodare,inno- vate,andlearntodealwithriskandfailure.Althoughthestudy didnotexploretheseaspects,theteachingmethodologieswith lesscreativecontentandpracticesintheuniversityenvironment favoran orientation moretoward compliance thanrisk, reaf- firmingthestudybyTestaandFrascheri(2015),inwhichitwas foundthatcurriculumformatsthatinvolveentrepreneurialedu- cationarelimitedtobuildingabusinessplan, whichdoesnot alwaysreflecttherealinterestsofthestudentsorisconstructed beforetheyevendevelopentrepreneurialskills. Thecurricula couldincludethe developmentofthesecompetenciesthrough theoreticalandpracticalcontent,aswellasincludetheeffectual approachto entrepreneurship (Sarasvathy,2008), so that stu- dentsunderstandthattheinitialtoleranceforrisksandlossescan beimportantforthebusinessresults,andthatopportunitiescan becreatedinsteadofdiscovered.Inshort,trainstudentswhocan discernwhenitisbesttobecautiousortotakerisks.Thiswould

be in agreement withwhat McClelland (1965)and Aschuler (1967)hadsaid abouttheimportanceofcurricula stimulating theneedforachievementamongyoungpeople,basedonfour majordevelopmentfronts:goalsetting;integrationofthought, action, and context; group supportfor feedback; andintense reflectionamongyoungpeopletodevelopacriticalsenseand toadjusttheirgoalstocurrentrealities.

Thepotentialentrepreneursofthisstudydifferedfromother early-stage Brazilian entrepreneurs, who generally risk more (GEM,2013).Onepossiblereasonisthatstudentsinthisstudy sample are moreengaged inplanning actions, whichinclude evaluatingandanalyzingdifferent approachestothebusiness modeltheyaspireto,includingevaluatingtheresourcesthatwill beinvested.Thiscanmakethemmorecautious.Theexcessive focusonpriorplanning(causationapproach)cancausefuture failuretobefeared,sinceitraisesawarenessoftheinnumerable riskfactorsthatwouldbeignoredinthecaseofimprovisation.It isemphasizedthatwhileitisprudenttoassesswhichlossesare acceptableandwhentostopintheeventoffailure,anyattemptat successandinnovationissubjecttofailures,andentrepreneurial successhasbeenassociatedwithpersistenceandthemitigation ofobstacles(Sarasvathy,2008).

What has been observed in this study is that potential entrepreneursaremoreinvolvedinplanningactionswhenthey wishtocreateabusiness,becausetheytendtofaceagreaterlevel ofuncertaintythanthosewhoareexperienced,sincethelatter areabletobasetheirplansonpastperformance,onhistorical tendencies,andotherinformationthatcanhelpreduceuncer- tainty(Gruber,2007).Itisalsonotsurprisingthattheyaremore enthusiasticabout planning, giventheir high motivationwith their entrepreneurialcareer andthe desiretoputintopractice theknowledgeacquiredthroughouttheirtraining(Freseetal., 2014).However,whiletheacademicandprofessionalliterature emphasizetheimportance ofbusinessplanning,studentswho havealreadyundertakenaventureseemtoredirecttheiractions torunningthebusinessonaday-to-daybasis.Thismaymean thatthegreatertheexperience,thegreatertheuseofintuition andalreadyavailableresourceswillbe.Therefore,thelowerthe levelofadoptionofthecausationapproach(priorplanning)will be.Itisrecognized,therefore,thatplanninglogicasacausefor goodbusinessoraneffect(planningasaconsequenceofwhat worksordoesnotinpractice)(Sarasvathy,2001)arenotexclu- sive, andcanbe combinedfor greatersuccessinestablishing andoperatingnewenterprises(Chandleretal.,2011).

Conclusions

Theobjectiveofthisstudywastocompareentrepreneurial motivations,businessplanning,andriskmanagementbetween two groups of university students: those who already had a business (experienced) and those who intended to start one (potentialentrepreneurs).Thestudybringsimportantcontribu- tionstotheoristsandpractitionersinentrepreneurship,aswell asforinstructioninentrepreneurship.

Four mainconclusionscanbe drawnfrom thisstudy. The first is that potential student entrepreneurs are more moti- vatedthanthosewhoare experienced.The second isthat the

main motivation for the entrepreneurial career, between the two groups in this study, is managerial, that is, both groups desiretoputintopracticetheirpersonalskillsandcapabilities toruntheirownbusiness.Thethirdconclusionisthatthemain differencesbetweenpotentialandexperiencedentrepreneurial studentsreferstothepositioningofsocialandfinancialmotiva- tions.Whileinthefirstgroupthesocialandfinancialmotivations occupythesecondandthirdpositionsrespectively,intheexperi- encedgroupthisorderisinverted,whichallowsonetoinferthat whenactuallyrunningabusiness,financialmotivationbecomes morepressingtoensuresurvival,leavingsocialidealssomewhat totheside.

The fourth conclusion is that potential and experienced entrepreneursdifferinoneofthe dimensionsofbusinesscre- ation.Both are cautiousinthe use of resources,riskingless, perhaps out of fear of failingto manage the business. How- ever,potentialentrepreneursinvestmoreinplanning,probably becausetheyarestillatthelevelofidealization,lessconcerned withpracticalmanagementissues.

Regardingthelimitationsofthetext,itshouldbenotedthat it was not possible to analyze differences in entrepreneurial motivations among students from different degreeprograms.

Also,variablesfromthefamilycontextsofthegroupswerenot exploredenoughtoallowinferringtheirinfluenceonpotential andexperiencedentrepreneurs.Anotherlimitationisthelackof proportionalitybetweengroups.Thecreationofthevariables, althoughbasedonthespecializedliterature,maybeanewsource oflimitation,althoughrevisedresearchresultsindicatethatthe designofinstrumentsofrisk-propensitymeasures,inparticular, donotexplainthedifferencesinresearchresultsconcerningthis personaltraitofentrepreneurs.

Onthecontributionsofthestudy,itisemphasizedthatfrom thetheoreticalpointof view,the studycontributestothethe- ory of motivations,going beyondthe widely studied reasons of opportunity and necessity. It also contributes to planning theories as a cause or as an effectof doing business, as ele- mentsarefoundintheirresultsthatsuggestthatbothtypesof planninglogicarecomplementary.Thisfindinghighlightsthe need tofurtherexplore experimentationandflexibility inthe entrepreneurialtrainingprocessoftheseyoungpeople.Italso pointstothefactthatdevelopingentrepreneurial skillsincol- legestudentsisnotjustaboutteachinghowtodrawupbusiness plans.

The study also contributes to evaluating the weight of theindividualvariablesanalyzed(planning,riskmanagement, and motivation) in the intentions and actions of poten- tial and experienced entrepreneurs. The variables show low diversity among the groups studied, revealing that there is a pattern in the sample that deserves to be more care- fully explored, especially in light of research results that showdifferencesinbehavioralandattitudinalpatternsamong entrepreneurs.

Conflictofinterest

Theauthorsdeclarenoconflictsofinterest.

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