Why do people want to start their own business? What drives them to strike out on their own?
If you’re considering becoming an entrepreneur, understanding your answer to this question is critical. Honestly, assessing your motivations can tell you a lot about your likelihood of success. Will you be able to navigate a financial crisis? Invest the extra hours to rework your strategy even when you’d rather go home?
If you don’t have an answer to that question, it may be helpful to explore why you want to be an entrepreneur further. Let’s take a look at some of the most common reasons why entrepreneurs start their own businesses—which are probably leading you to do the same.
1. Freedom to pursue your passion
You’ve had this talent, skill, or hobby for years, maybe even since childhood. Now, you see a potential opportunity to develop a business structure and monetize it. So you decide to use your passion to start a business.
However, you may want to take a moment to assess the potential of your passion. Yes, it makes you happy, but can it pay the bills?
When you set aside emotion and focus strictly on dollars and common sense, does your passion-fueled business idea truly have the potential to be financially successful? Don’t forget, with ongoing record inflation, you’ll need continuously increasing income to support yourself and your business. Can your passion keep you afloat?
If the answer is yes, start writing a business plan and go for it. If not, then you should likely rethink using your passion and explore other small business ideas. Consider another talent or hobby that can bring emotional fulfillment, as well as a tangible financial reward.
Or, do further market research into other opportunities outside of your core interests. You may find that there is another reason for being an entrepreneur is really what’s driving you.
Recommended Reading: 12 Types of Entrepreneurs Explained
2. Create generational wealth
Many people are fixated on the idea of creating wealth that can be enjoyed by their families. For some, it’s an ambitious financial planning goal derived from witnessing living examples of absurdly wealthy families. People who’ve been able to pass down highly successful businesses from generation to generation. Others simply want their kids and grandkids to be spared from the financial hardships they were forced to overcome.
Yet, only a handful of businesses are able to survive the passage of time. Yes, building a prosperous foundation for your descendants is a worthy cause. However, there is no guarantee that they’ll have the work ethic or discipline necessary to maintain an existing business. Much less position it to remain competitive in an ever-evolving global marketplace.
Therefore, your focus has to be on how this endeavor will improve your life right now. Yes, your hard work could benefit your great-great grandkids, and you can teach your children to appreciate your business. You can’t force them to have the same passion you do. You can only set them up for success and hope for the best.
3. Support community, non-profits, and other social efforts
Many new entrepreneurs have a deep desire to use their businesses as vehicles to help the less fortunate. These noble souls see starting a small business as a means to effect change.
Social entrepreneurs aren’t driven by money but rather by a desire to create a better world. In our 2021 State of Small Business Study, we found that 12 percent of respondents identified giving back to their community as the primary reason for starting a business.
If you’re one of these generous individuals, you must never forget that business remains business. Even though you have the best intentions, this doesn’t remove the responsibility to serve the needs of your target market. To provide competitively viable products and services for your customers. Failure to do so will result in your customer base taking their hard-earned money elsewhere, leaving you and your cause, out in the cold.
4. Turn a side-project into something more
Many successful businesses were once the side-gigs of nine to five employees who were simply trying to earn extra money. One thing led to another, word got around, and after a while, that side-project earned enough to replace the nine to five job, and boom: A business was born.
As of 2022, we found that 23 percent of entrepreneurs were either starting a side gig or trying to turn a side gig into a full business. In fact, for most people, having a side gig is just a necessary part of survival.
Yes, it is possible to turn your side project into a full-fledged business that becomes your primary source of income. However, it’s often difficult to know when it’s the right time to step away from your full-time position.
When should you begin to promote your business? Should you invest in business insurance? Get the necessary licenses and permits to become a sole proprietorship?
These are just some of the questions you’ll need to answer when turning a side gig into your full-time pursuit. You don’t need to immediately make it your primary work; just take steps in that direction to see how viable it can be.
Remember, this can take months or years to gain traction. Just like a seed that you plant, you need to water it to see growth. With enough time and “watering,” that little side-gig seed can become a huge tree that becomes a profitable business.
5. Challenge the status quo
Have you ever felt like there’s a better way to do something? This is a sentiment often held by game-changers. The employees and dreamers who feel the job or industry they’re in isn’t doing something right, and it’s up to them to change the status quo.
Disrupting current norms can be a powerful incentive for new entrepreneurs. It can also be extremely beneficial for consumers wanting higher quality products or more efficient service. Nevertheless, disruption shouldn’t be based on personal feelings or experience. Instead, it must be centered solely on customer wants and expectations.
Will consumers actually be interested in the innovation you provide? If you truly want to shake up the status quo, it’s up to you to find out if the solution you see truly benefits others.
6. Flexibility and balance
Having more personal and family time is one of the most powerful motivations for many new and prospective entrepreneurs. Nothing beats working on your own time and not having to worry about someone else’s standards.
It’s time to make your own clock and choose your own hours. The harsh reality, as many new small business owners discover, is that work hours tend to increase, not decrease, after launching your own business.
This is your project, your idea, and your customers, so it’s your responsibility. Reasoning such as “I’m not feeling well” or “that’s not in my job description” no longer applies to you. When you’re an entrepreneur, you’re always on duty.
Sure, you have “absentee owners” who simply hire people and leave them to run a business. But take a look at the most successful entrepreneurs. There is one common thread—they are hands-on. Oftentimes, their level of micromanagement is borderline psychotic.
No, you don’t have to follow in the footsteps of Steve Jobs to be a successful entrepreneur. You don’t have to spend every waking hour to ensure your business succeeds. But you must care deeply about your business and, yes, sacrifice a great deal of time to make it a success.
7. Being the boss
One of the greatest driving forces for people starting a business is taking on the title of “Boss.” 47% of new entrepreneurs surveyed said that their main reason for starting a small business involved wanting to be their own boss.
There’s a certain aura, a distinctive swagger, that many entrepreneurs have. Unlike top-level executives or even appointed CEOs, entrepreneurs garner a great deal of respect for being the ones who took the initial risk. They’re the ones whose vision enabled them to see an opportunity and whose determination made it happen.
Entrepreneurship is a medal worn with pride, which most onlookers cannot ignore. Why do people start their own businesses? Because many want the respect and admiration that comes with starting a business.
If that’s your main reason, make sure you’re totally prepared for the responsibility that comes your way. You owe it to yourself, your employees, and your customers.
Recommended Reading: 6 Requirements of Successful Entrepreneurs
How to successfully start your own business
Whatever your reason, there is one thing you absolutely must do in order to be successful—plan. This is especially true when starting and attempting to grow a business. For an entrepreneur, being prepared is often the difference between success and failure.
If you’re seriously considering starting your own business, then you can’t afford to leave anything to chance or be surprised by any eventuality. With powerful planning and management tools available such as LivePlan, there’s no excuse for prospective entrepreneurs not to have a solid course of action. Your planning should incorporate regular forecasting and preparing contingencies for likely scenarios.
Confirm and test your reason for starting
Effective planning not only helps you identify the reasons you want to start a business but also allows you to assess if your business truly has the potential to be sustainable. There’s no need to waste precious time or money pursuing an idea that won’t work. By taking the time to plan properly, you’ll be able to see clearly if your business idea is worthwhile and figure out the necessary steps you’ll need to take to bring it to fruition.
Turn hard work into strategic work
After you have developed a plan, it’s time to act. That means dedication, hard work, and the willingness to plan. Make no mistake, if you’re not prepared to put in the hours toward your entrepreneurial dream, then you should reexamine if starting a business makes sense.
Nothing in entrepreneurship is guaranteed, and it’s driven by strategic risk. This is why effective planning, reviews, and revisions are so vital for business owners. It can help streamline time-consuming work, eliminate unnecessary risk, and ultimately help you know more about your business.
Gain the confidence of a successful entrepreneur
Now that you’ve been reminded of just how difficult starting a business can be, there is one more requirement necessary for you to succeed—self-confidence. No one is going to fully
believe you can do it until you actually turn your idea into a successful business. First and foremost, you must believe in yourself. Without this critical element, your new business is almost certain to fail.
Why would anyone support a business whose owner doesn’t believe in its future? People are attracted to winners who showcase the capability to maintain that success. Possessing this attitude, combined with thorough, objective planning, will empower you to aggressively pursue your goal and find success as an entrepreneur.