5 Traits of Successful Entrepreneurs

You could be the next Bill Gates if you live a frugal life and can accept failure.

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Kyle James
The word "entrepreneur" gets thrown around a lot these days and has a certain sexy tone to it. The Merriam-Webster dictionary defines the word as "A person who starts a business and is willing to risk loss in order to make money."

The words "willing to risk loss" are a major red light for many aspiring entrepreneurs and definitely remove much of the sexiness. But for those with a higher risk tolerance and who possess the following five traits, the sky is the limit in terms of potential success.

1. Frugality

Billionaire entrepreneur Warren Buffett once said, "Most toys are just a pain in the neck." Interesting words for someone who can afford any "toy" he desires. Yet many successful entrepreneurs, like Buffett, live a fairly frugal life and have the proper perspective on "stuff."

Similarly, Mark Zuckerberg, the billionaire founder of Facebook, reportedly still drives a modest Acura sedan. He clearly has come to realize that a car is nothing more than a status symbol to show to strangers at red lights.

Many successful entrepreneurs have taken a page from Buffett and Zuckerberg and live a meaningful, but frugal life, and use the money saved to expand their business endeavors, investments and prepare for a quality retirement down the road.

In fact, many entrepreneurs and small business owners consider their money-conscious lifestyle to be a huge factor in their early success. For example, Nate Lipton, founder of GrowersHouse.com, used the frugal approach of recycling and reusing all shipping supplies. Once a shipment came into his garden supply business, he would reuse all the boxes for outgoing orders. He was able to grow his business to $2 million in revenue and only spent $300 on shipping supplies in the process.

2. Action Mentality

Entrepreneurs who act on opportunities are those who tend to succeed. For this example, I use a case study I am very familiar with: my parents. In the early 1970s in Los Angeles, my dad, who is a school teacher, took an opportunity that changed his financial life forever. He saved enough money for a down payment on a triplex apartment building. He realized that by living in one of the units and renting out the other two, his renters would be essentially paying his mortgage.

He took action and within one year was able to trade his triplex for a larger apartment building and kept rinsing and repeating his strategy for the next 30 years. Because of his action mentality and entrepreneurial spirit, he accumulated substantial wealth all on a school teacher's salary.

Nolan Bushnell, founder of Chuck E. Cheese's, best summed up the action mentality trait: "The critical ingredient is getting off your butt and doing something. It's as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today."

3. Accept Failure

Most successful entrepreneurs consider failures to be part of the process and stepping stones toward eventual success. The list of entrepreneurs who failed before they succeeded is quite remarkable. Just take Henry Ford, whose earlier business ideas left him completely broke on several occasions before he eventually succeeded and revolutionized the automotive industry.

4. Hunger for Knowledge

LinkedIn co-founder Reid Hoffman once said, "You are not a finished product. If you don't keep evolving, you start dying." Successful entrepreneurs admit that the quest to gain more information and master their field of expertise in not an option, but rather a necessity. Whether this means continued education, finding mentors, analyzing the competition or creative brainstorming, continuing to learn is vital.

5. Willingness to Change

This "willingness" has two fronts. The first is the willingness to change direction when things are not going your way and avoid throwing good money after bad ideas. The second is the ability to change and adapt when things are going well, which is often more difficult than the first willingness. In other words, don't fall victim to the "if it isn't broke, don't fix it" philosophy.

Microsoft co-founder Bill Gates summed it up aptly, "The people who resist change will be confronted by the growing number of people who see that better ways ... are available." By changing and adapting when things are going well, you develop an entrepreneurial philosophy of staying ahead of the competition and can find better ways to compete and exceed your customers' expectations.

Kyle James is an entrepreneur and founder of Rather-Be-Shopping.com, which helps consumers save money with online coupons.