Let us now study the ethical behavior of true entrepreneurs. 

According to economist Joseph Alois Schumpeter (1883-1950), entrepreneurs are not necessarily motivated by profit but regard it as a standard for measuring achievement or success. Schumpeter discovered that they (1) greatly value self-reliance, (2) strive for distinction through excellence, (3) are highly optimistic (otherwise nothing would be undertaken), and (4) always favor challenges of medium risk (neither too easy, nor ruinous).

Today, majority of entrepreneurs are motivated by profit only. Today, the names of big entrepreneurs are making headlines in the business world because of their rising profits as reflected in their financial statements. They focus on profits only just to give good returns to investors. But, for true entrepreneurs, profits are not an end but a means to measure achievement or success.

They greatly value self-reliance. They are not dependent on bank loans or capital investment through share markets to start their businesses. They start their businesses with what they possess in their hands. They have only two fishes and five loaves of bread in the wilderness when they embark upon their business. But they have a great vision of feeding thousands of customers all over the world with their scarce raw materials or small capital investment likened to the two fishes and the five loaves of bread.  From the beginning of their businesses, they feel reliant on their talents. They are visionaries seeing impossibilities happening.  They are dreamers.  They do not go to rich people or financial institutions with begging bowls. They have the trait of perseverance.  Even if they face failures, they would not give up. It is the trial and error method.  They learn from failures only. 

Once they establish their businesses, they strive for distinction through excellence. They do not want mere profits but covet distinction in their products or services. For them, the end is not money but excellence.

Thirdly, they are highly optimistic.  Even if they incur losses, they are optimistic. Even if their businesses are hit by recessions or depressions, they are optimistic of the dawn as the night has to give way to the dawn.

Recession is marked by high unemployment, stagnant wages, and fall in retail sales. A recession generally does not last longer than one year and is much milder than a depression. Although recessions are considered a normal part of a capitalist economy, the true entrepreneurs are not affected by such recessions.

But, depression is for a longer period. Depression means a lowest point in an economic cycle characterized by (1) reduced purchasing power, (2) mass unemployment, (3) excess of supply over demand, (4) falling prices, or prices rising slower than usual, (5) falling wages, or wages rising slower than usual, and (6) general lack of confidence in the future. Also called a slump, a depression causes a drop in all economic activity. Major depressions may continue for several years, such as the great depression (1930-40) that had worldwide impact.  A true entrepreneur will not be cowed down by depression also and will be sustained throughout the long period of depression. He will not be wiped out during this long period. Even if he falls down, he will rise again and will stand on his own legs. 

Fourthly, they always favor challenges of medium risk. The entrepreneurs are decision makers. Even if their decisions may result in some financial loss or losing some valuable vendors, they face such challenges of medium risk boldly. This is akin to catching big fishes using small fishes.  They have to sacrifice small fishes in businesses when their vision extends to other nations or continents.

In late 1950s and early 1960s, my late father was a true entrepreneur.  When he started his business in a small way, he did not have any amount of capital in his hands.  He was faithfully working for his employer.  His employer made him a partner in due course.  Afterwards, he established his own business which later flourished like a banyan tree, employing many workers.  He established many branches of his business. He was self-reliant and did not depend upon any man for support. He was a visionary and took bold decisions.  He was a model employer and took care of his employees.  He used to work hard in his business and earned the goodwill of his creditors and debtors.