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Psychometric Tests for Entrepreneurs

Psychometric Tests for Entrepreneurs

Psychometric tests assess someone’s individual ability. If well researched and validated, it helps the assessor to get an accurate view of their personality.

Table of contents

What are psychometric tests?

Self-knowledge is essential to function well in work

Psychometric testing means measuring someone’s personality. In general, a personality can be described as a natural way of thinking, feeling, and behaving that predicts a person’s behavior. Thus, measurements are mostly done by means of a personality test or personality assessment and are often part of a recruitment process.

For example, such an assessment can consist of a verbal reasoning test, a numerical reasoning assignment or numerical test, a diagrammatic reasoning test (for example by visual representations), intelligence tests or IQ test, an inductive reasoning test, a cognitive ability test, abstract reasoning tests, and the list goes on. Additionally, these are all tests that produces a test score, that indicates the candidate’s thinking capacity.

To measure the way someone feels and behaves, you can use a personality questionnaire, a psychometric assessment, a situational assessment test, a proficiency test, a skill test, and some verbal tests. And this list continues.

Entrepreneur Competence Model

A test or assessment can unfold diverse aspects of a person. For example, when someone is a very entrepreneurial person it says something about the entrepreneurial personality of the individual. Yet entrepreneurial is much more than a single personality trait, aptitude, or a way of thinking. So, you can consider the term entrepreneurial a competency. The Entrepreneur Competence Model consists of four basic elements: motivation, characteristics & thinking styles, skills (personal qualities or abilities), and knowledge & experience.

Someone’s personality can be measured in many ways, but the most common ones are with a personality test or an assessment. Back in the days, these tests were issued by a test publisher and you had to visit an assessment centre, but nowadays with the internet there are many more tests to find just a click away. Most of them are a free test, but they lack a reliable and well-researched foundation. So, they are not reliable! It can easily lead to the wrong conclusion and do much harm. So, it would be best if you always looked for psychometric tests that are scientifically based and evaluated.

For example, the E-Scan measures entrepreneurial competence accurately. Hence, it gives instant insight into the entrepreneurial mindset and potential to grow.

Why are psychometric tests important?

Human recourses mostly use psychometric tests to assess if someone fits a job description and if the candidate matches the culture of a company. So, in a recruitment process, these tests often predict job performance. At least that is the idea. However, to be able to use a test, the employer or recruiter needs training and accreditation. Furthermore, coaches of all kinds use these psychometric assessment tests, too, to get an accurate psychometric measurement of their client’s personality.

To assess someone’s individual ability, strengths and weaknesses, you need a well researched and validated psychometric test. It helps the assessor to get a clear picture of their personality, quickly and accurately. Without it, it would fall back to the very subjective gut feeling and false positives.

Most people lack self-knowledge. They quickly overestimate their strong points and fail to mention more than three weak points. Weak spots that are, in a way, strong points, like: I can be very dominant, with which they also imply that they have a strong personality.

Is E-Scan a psychometric test?

Yes and No. It’s much more than an online test or assessment. It’s a scan with additional tools to convert the results into a concrete action plan for further development. It combines psychometric aspects with theory of the business life cycle.

E-Scan, is a data-driven scan in which you can compare your clients with other entrepreneurs. You see graphically and textually how they score on essential competencies as an entrepreneur and what type of entrepreneur they are. And whether that fits with the phase of their company and what they are still lacking.

So, it does measure the individual’s ability accurately like any other top validated psychometric test that exits. But that is just one part of what E-Scan does. E-Scan is based on scientific research on successful entrepreneurship, which started in 1995 and is continuously evaluated.

E-Scan is different from the more general personality tests because it is more of a scan than a test. It is a scan of the entrepreneurial personality put into perspective of the business lifecycle. It combines psychometric analysis with business theory and practice. Despite the quality of the general personality tests, they measure the general personality and always need an additional translation and validation to be useful for assessing entrepreneurs.

The 2 core use cases of psychometric tests for entrepreneurs

Screening: how to select the franchisees that fit a franchise formula?

To grow as a company, setting up a franchise formula could be a strategic option. However, finding the right franchisees can be a time-consuming process. It is the Achilles heel of each formula.

Preferably, you don’t want them to be too entrepreneurial and start multiple branches of the same formula. On the other hand, you don’t want them to lack an enterprising personality: the costs of selecting, training, and on the job guidance would outweigh the revenues such a franchisee would make. And every franchise formula is different.

By measuring their entrepreneurial behavior and the associated competencies at the earliest possible stage with (candidate) entrepreneurs, franchisors can not only offer tailor-made guidance but also prevent candidate franchise entrepreneurs from working within the formula who do not fit or will not be successful.

Learning & Development: how to grow an entrepreneurial mindset?

Learning

More and more often, entrepreneur coaches conclude that entrepreneurial behavior is the major influencer in the growth of their clients.

Did you know that 72% of business owners lack accurate self-knowledge? If the entrepreneur coach doesn’t address this issue first, it could have devastating consequences for the success of their coaching and the business of their client.

By measuring this behavior and the associated competencies at the earliest possible stage with (new) entrepreneurs, coaches can not only offer tailor-made business coaching but also prevent that the advice and strategies don’t fit with the person and thus are not successful.

Every business coach or (financial) advisor should put the entrepreneur first. Based on the entrepreneur, a program must be drawn up that aims to provide the entrepreneur with insight into his own entrepreneurship, as well as insight into the influence of this on his company and its elaboration.

It teaches the entrepreneur why he ended up in this situation and how he can get out of it himself. Of course, under the guidance of an entrepreneur coach. In the implementation, appropriate specialists can be selected for the customer who supports the implementation (tandem model). The business coach focuses on the process, and the personal growth of the entrepreneur, the consultant on solving (part of) the problem for the business owner.

Development

Nurture or nature?

Many people still believe that you’re born an entrepreneur. The big question is if it is nature or nurture? Or in other words: are entrepreneurs born or bred?

Research done by scientists with children of biological and adoptive Swedish parents, answer this elusive question.

In the article “Why do Entrepreneurial Parents have entrepreneurial children?”, the researchers found that the effect of post-birth factors (adoptive parents) is approximately twice as large as the effect of pre-birth factors (biological parents). They have about 60% more chance to become an entrepreneur or start a business of their own. So, genes do play a role, but a tiny one, in any case. So it is more about the upbringing than it is to have the right genes.

89% still exists after 5 years

In a one-year coaching program by the Chamber of Commerce, the competences of all participants have improved considerably. With a pre- and post-measurement based on E-Scan, the qualities show the greatest significant increase. The main results are shown below.

CompetenciesResults in %
Networking+ 96%
Belief in own entrepreneurial competencies+ 76%
Marketing & sales+ 68%
Financial management+ 48%
Strategic thinking+ 37%

Follow-up research has also been conducted, and the percentage that still exists after 5 years for this group of participants with one year of entrepreneur coaching is 89%. The average survival rates in the Netherlands after 5 years are 49% (in the USA, it is around 50%). So, only 11% of this group quit within 5 years.

Students grow their entrepreneurial mindset
  • Young Enterprise offers a concise year program to learn entrepreneurship during (secondary) vocational education. With the right help and coaching by teachers, pupils grow an entrepreneurial mindset. The traits grow with about 27,4% and qualities – that are easier to develop – grow with 31,7% on average.
  • However, there is one important condition: the quality of the teacher. It is a necessary condition, and therefore, must be met. Due to a lack of commitment and understanding of how to coach students on their entrepreneurial mindset, a big part (49%) showed no growth at all. Students were left behind without a clue what they have learned from this experience. So, the quality of the teacher is paramount.

How does the E-Scan compare to other Psychometric Tests?

E-Scan is different from the general psychometric tests. Below the most common psychometric tests are described, followed by why E-Scan is different from those types of tests.

Myers Briggs Type Indicator (MBTI)

The MBTI identifies a person’s preference for perception and judgment on four bipolar dimensions or dichotomous pairs:

  • Extraversion (E) -Introversion (I);
  • Sensing (S) -Intuition (N);
  • Thinking (T) -Feeling (F) and
  • Judging (J) -Perceiving (P)

This eventually creates 16 general personality types, each with their own characteristics, depending on their combination. However, you find all 16 types among successful entrepreneurs.

DISC profile

DISC also assesses four types, but their types are built on four primary emotions and their associated behavioral responses:

  • Dominance
  • Influence
  • Steadiness
  • Conscientiousness

You find all levels of behavioral responses among successful entrepreneurs.

Five-Factor Model (Big Five)

The big five is a theory that describes personality in five general dimensions of personality traits.These five traits are:

  • extraversion,
  • agreeableness,
  • openness,
  • conscientiousness,
  • neuroticism

Research shows that the broad big five traits are worse in predicting entrepreneurial performance than more specific entrepreneurial competencies.

E-Scan

Where the other tests are focussed on the broad personality, E-Scan is specially designed for measuring the most important entrepreneurial traits and skills. Despite the quality of these generic tests, they measure the general personality and are not suited for assessing entrepreneurship.

E-Scan measures the four elements of the entrepreneurial competence model:

  • motivation
  • personal traits
  • qualities
  • knowledge & experience

E-Scan is developed explicitly for entrepreneurship and validated under large groups of (aspiring) entrepreneurs regarding their business lifecycle. More than 1,000,000 (aspiring) entrepreneurs have received their entrepreneurial mindset profile. Furthermore, the emphasis on E-Scan and its additional tools lies in the development of the entrepreneur in regards to his future.

Are you a business coach, advisor or entrepreneurship teacher? You can test the E-Scan for free.

Are you curious about your Entrepreneurial score?
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