Disadvantaged entrepreneurs often fear success, but new research can help
When low-income entrepreneurs start their own businesses, they frequently fear failure — a well-documented phenomenon. But over time, they may also fear success, given the costs and unknowns it can bring, and this barrier to growth is under-studied and underappreciated. A new study from a Keough School of Global Affairs expert breaks new ground by explaining this fear and offers five recommendations to help entrepreneurs overcome it and move out of poverty.
Michael H. Morris, a professor of the practice in the University of Notre Dame’s Keough School and director of the Urban Poverty and Business Initiative, a program offered by the school’s McKenna Center for Human Development and Global Business, is lead author of a journal article where these recommendations are outlined, as recently published in Business Horizons.
“This study is one of the first to deepen our understanding of the fears that poor entrepreneurs commonly face, in particular the unexpected and counterintuitive fear of success,” Morris said. “We believe it’s crucial to address these fears, or they can become a behavioral roadblock that prevents individuals from navigating the uncertainties of creating a new business. We have identified several key priorities that policymakers and support organizations can focus on in order to work more effectively with them.”
Five key priorities
Morris and his co-authors documented the fears experienced by many disadvantaged entrepreneurs by conducting six focus groups with participants from the Urban Poverty and Business Initiative program.
More than 90 percent of participants were people of color and 68 percent were women. Approximately 4 percent were formerly incarcerated, 2 percent were refugees and 1 percent were women who lived in shelters. All came from underprivileged backgrounds. The research was funded with support from WorkRise, a research-to-action network hosted by the Urban Institute.
Disadvantaged entrepreneurs face specific obstacles that mid- and higher-income businesspeople generally do not, Morris said, including lower literacy levels, a scarcity mindset, significant non-business distractions and lower access to finance.
Fear is a common occurrence for people in this group, Morris said, whether it is at the start of a new venture or as a business gains traction and encounters new challenges. And fear of success — while less studied — can have damaging outcomes, Morris said, because it can lead to procrastination, self-sabotage and failure to make key decisions that could help a business grow.
Ultimately, Morris and his co-authors issued five recommendations to help address these fears:
- Providing entrepreneurial role models to help individuals recognize different paths to, and outcomes from, a successful enterprise
- Teaching entrepreneurship early, with an emphasis on experiential learning, where success is made more tangible and manifested in different ways beyond just profitability
- Providing mentorship, where experienced entrepreneurs help business founders understand and address the costs versus benefits of different types and degrees of success
- Positioning venture creation as an option in workforce development programs (These programs traditionally focus on training participants to work for others.)
- Developing more flexible and holistic microfinance programs where investments are tied to incremental progress in meeting success goals and targets
A playbook for policymakers and support organizations
Morris co-authored the study with Donald F. Kuratko of Indiana University, Susana C. Santos of Florida State University and Sohab Soleimanof of Louisiana State University. The authors drew on their deep experience to create a playbook they believe can assist policymakers and people who work with disadvantaged entrepreneurs.
Ultimately, Morris said, while success might seem scary and costly to underprivileged businesspeople, identifying a handful of key priorities can focus and sharpen initiatives aimed at helping them succeed.
“We hope that educators, policymakers and the various stakeholders who work with poor entrepreneurs will apply these recommendations,” he said, “and, in so doing, help them overcome their fears and embrace entrepreneurship as a viable pathway out of poverty."
Originally published by Josh Stowe at keough.nd.edu on May 2.
Contact: Tracy DeStazio, associate director of media relations, 574-631-9958 or tdestazi@nd.edu
Latest Faculty & Staff
- Santiago Schnell, dean of Notre Dame’s College of Science, appointed as provost of DartmouthSantiago Schnell, the William K. Warren Foundation Dean of the College of Science at the University of Notre Dame, has accepted an appointment as provost at Dartmouth College. He will depart Notre Dame at the end of June and begin his new role in July.
- Notre Dame’s Fightin’ Irish Battalion receives Department of Defense award as nation’s top Army ROTC programThe United States Department of Defense honored the University of Notre Dame’s Army ROTC Fightin’ Irish Battalion as the nation’s top Army collegiate program for the 2023-24 academic year. This will be the first time the unit has received the department’s Educational Institution Partnership Excellence Award, which recognizes the program’s achievements in recruiting, educating, training and commissioning leaders of character to be the next generation of military officers.
- In memoriam: Karl Ameriks, the McMahon-Hank Professor of Philosophy EmeritusKarl Ameriks, the McMahon-Hank Professor of Philosophy Emeritus at the University of Notre Dame, died on April 28 from pancreatic cancer. He was 77. Born in post-World War II Germany, Ameriks’ family emigrated to the United States when he was a child, and he grew up in Detroit, Michigan. He received his bachelor’s and doctoral degrees from Yale University. He came to the Department of Philosophy at Notre Dame in 1973 during a formative time for the department, which had transitioned from a predominantly Thomist focus to the more analytical American philosophy in the 1960s.
- Notre Dame psychologist explores how children best learn math — and yes, timed practice helpsUniversity of Notre Dame professor of psychology Nicole McNeil recently co-authored a report that examines the best way for children to learn arithmetic — whether that’s by memorizing number values and multiplication tables, or by studying math at a deeper, conceptual level. The report, “What the Science of Learning Teaches Us About Arithmetic Fluency,” was published in the journal Psychological Science in the Public Interest and shows that children learn most effectively when instruction follows an evidence‑based cycle: grounding facts in conceptual understanding, using brief timed practice to make those facts automatic, and then returning to discussion and reflection to deepen that knowledge.
- ’Tis the season for ticks and mosquitoes. A medical entomologist talks about these pests and how to avoid them.Notre Dame expert Lee Haines explains the risks mosquitoes and ticks pose to the Midwest and discusses how the public can best protect themselves and family members (including pets) from these bloodthirsty pests.
- ND Expert on tariffs and trade policy: ‘How should the US be engaged with the rest of the world?’To make sense of the new administration's recent tariff announcements and policy changes, Robert Johnson, the Brian and Jeannelle Brady Associate Professor of Economics at Notre Dame, explains how tariffs affect global economies and what this means for U.S. engagement in global trade.
