Why start a business? The need for autonomy and challenge
In running startup workshops one of the first questions we ask is ‘Why start a business? What are your motivations?’ Example answers from participants in a recent workshop in Bundaberg are summarised below:
WHY START A BUSINESS?
11. To solve a problem
12. For a future that enables us to travel, work and play
13. Freedom to work anywhere in the world
14. Couldn’t get employment and sick of doing nothing
15. Exciting ideas need an outlet, own time, fund retirement, like helping others, control
16. Benefits for you and your family
17. It’s rewarding because you reap the reward from your work
18. To achieve personal / professional goals
19. To deliver quality products or services to those who need them
1. Sick of working for someone else
2. Because I am a terrible employee
3. I want to share my valuable knowledge
4. I would like more control of my career and aspirations
5. New challenges and opportunities
6. To create something of my own. Bring an idea to life
7. To pursue the ‘2.30am idea’, if I didn’t start I couldn’t sleep
8. Job security
9. Home / family / work lifestyle
Necessity or opportunity?
The answers include some driven by necessity – for example the person who couldn’t find employment locally, was sick of doing nothing and so created his own employment by starting a business.
Others recognise their own personality type and that they would make a terrible employee and would much prefer to have control of their own destiny and do their own thing. It is also interesting to see that some people regard starting their own business – typically seen as a risky option – as offering greater job security than being an employee.
Many entrepreneurs are driven by the opportunity – to develop a solution to a market problem, to pursue an idea that keeps them awake at 2.30am, to achieve goals and reap the rewards – the sense of achievement as well as financial rewards.
‘Freedom’ is a central theme
Freedom to do want you want in the way you want, when you want and even where you want. Several of the entrepreneurs in this group were building online businesses very much with a view that they could run these businesses from anywhere in the world – with opportunities to blend family life, travel and work.
A UK survey of over 1,000 respondents to Global Entrepreneurship Monitor (GEM) surveys provides reliable evidence on the different motivations for starting a business.
Source: Understanding Motivations for Entrepreneurship, BIS Research Paper No. 212, March 2015, Authors: Ute Stephan, Mark Hart, Tomasz Mickiewicz, Cord-Christian Drews (all Aston Business School, Birmingham, UK) & IFF Research, London, UK.
The study found that:
‘Motivations for starting a business are complex and that motivations other than the traditional opportunity-driven and necessity-driven distinction are more closely related to business survival and success.
These motivations can be best classified in terms of the importance attached to ‘autonomy and better work, ‘challenge’, ‘financial’ and ‘family and legacy’ aspects. Across all business types, entrepreneurs say autonomy is their most important motivator.
Businesses can do well regardless of whether they were started out of opportunity or necessity. Both opportunity-driven businesses and necessity-driven businesses create jobs, innovate and export. The most important factor for business success was ambition with those firms starting out with high growth expectations performing most strongly.
The four key motivations are described as:
1. Autonomy & better work – The importance attached to seeking freedom and flexibility and better work opportunities as motivations to start a business.
2. Challenge & opportunity – The importance attached to seeking personal challenge, fulfilling a vision, and opportunities to use existing skill and receiving recognition as motivations to start a business.
3. Financial motives – The importance of seeking financial security, larger income and wealth as motivations to start a business.
4. Family & legacy – The importance of seeking to continue or create a family business as motivation to start a business.
Entrepreneurs say autonomy is their most important motivator, followed by challenge and financial motives. Family and legacy motives were least important across all types of businesses.’
Whatever the motivation for starting a business, the aspiring and early stage entrepreneurs in Bundaberg also noted that advances in technology were opening up new opportunities to reach markets across the world from regional locations. Technology offered new opportunities to test responses to new business ideas (Minimum Viable Products or MVPs), reach customers across the world, work and communicate with other people and outsource work.
Technology helps. Increasingly, the answer to the question ‘Why start a business?’ is 'Because I can'.