Why do people start a business? Why do they want to become an entrepreneur?
Each business owner has his or her own reasons for starting a business. There are those who have unequivocal beliefs that their products or services are just what the world needs. Others start a business because of their firm resolve that their business can provide help to their target market. Others start a business because of their need to achieve personal gain, to help their families, and still others feel that entrepreneurship is their best path to achieve their goals in life.
According to a University of Maryland study entitled “Entrepreneurial Motivations” by Scott Shane, Edwin Locke and Christopher Collins http://faculty.weatherhead.case.edu/shane/pem/PEM1.pdf
“The pursuit of entrepreneurial opportunity is an evolutionary process in which people select out at many steps along the way, decisions made after the discovery of opportunities – to positively evaluate opportunities, to pursue resources, and to design the mechanisms of exploitation – also depend on the willingness of people to “play” the game.”
The study identified several motivations that compel a person to become an entrepreneur, such as need for achievement and risk taking. Entrepreneurs also possess “tolerance for ambiguity” — even though there is no assurance that a business will succeed, entrepreneurs are not daunted by this uncertainly and instead continue to pursue the idea of starting a business. They also possess “locus of control” – they want their actions to have a direct impact on results. These are individuals who want to be in direct control.
Empirical studies are great, but I prefer listening to stories of entrepreneurs and what made them decide to become an entrepreneur. In our recently concluded Lenovo giveaway contest, we asked entrants their motivations for starting a business.
A lot of responses focused on their families and what entrepreneurship can give them. They see entrepreneurship as a way to help their families and give them better opportunities. As our winner Rachel Hull of www.mommamoney.info said:
“My inspiration to become an entrepreneur is my family. I love being able to work from home. I love knowing that I can provide for our livelihood. And I love showing my daughter that a person can claim their own thoughts and ideas.”
But more than the personal motivations, the economy also has a lot to do with why many are turning to entrepreneurship. As Hull also said:
“My business is small and Internet based. Until recently I could only claim it as a hobby. But with my husband laid off in May, it has given me a rare opportunity to give it my all. In doing so, I’ve finally found not just a paying job but a career.”
Sometimes becoming an entrepreneur is the fulfillment of a lifelong dream, mostly influenced by family. Even studies show the strong parental influence in instilling the desire to be entrepreneurs: there is a higher likelihood for a person to become an entrepreneur if their parents are also entrepreneurs.
Others are influenced by the dreams of their parents for them. As Michelle Chen, who owns a Chinese restaurant in North Carolina said:
Seven years ago, at the age of 17, I came to America with my mother with nothing more than couple hundred dollars and a small suitcase of old clothes. And now after seven years of hard work, I am about to fulfill my childhood dream of opening my very own Chinese restaurant (Cooking has always been my utmost passion). Getting to where I am right now wasn’t easy. It took a heavy dose combination of motivation, determination, commitment, and perseverance. I had to work two jobs at a time while learning a second language and various other types of cooking styles: all in preparations of opening my own restaurant. More importantly, I am also doing this for my late father, who passed away before realizing his dream of owning a restaurant. As his daughter, I shall finish the path for him.
Of course, there’s that “locus of control” reason, as Jason Rogers of Canada said,
I was inspired to become an entrepreneur because I was intrigued with the idea of seeing one’s dreams be realised and goals come to fruition. I liked the idea of having independance and not having anyone tell you how much you are worth (being salaried). Entrepreneurs can make as much or little income as they wish and the sky is the limit in terms of achieving whatever they set out to do. No one is there to keep you confined to a box. You are free to explore the world and face it head on
What motivated you to start your business?