Research from the Centre for Entrepreneurship think-tank has shown that the number of people starting a business in the UK has increased significantly over the last few years. Indeed, business formation rates in the UK reached record numbers with a total of 663,272 new businesses being created in 2018. In Wales, 17,507 new firms were created – an increase of 3.6 per cent on the previous year.
But what are the motivations that can act as major influences on the decision to start a venture? The main driver is normally the identification of a new business opportunity which is often related to an area in which the future entrepreneur is currently active, possibly through employment or their personal interests.
But there are also a range of other factors which may encourage an individual to set up their own business.
These can include the financial reward from entrepreneurship, the opportunity to work for oneself and the freedom to pursue a personal motivation.
It can also be due to a need for recognition, either through a sense of achievement to be gained from running one’s own venture or gaining the social standing achieved by many successful entrepreneurs within their local community.
But not all entrepreneurs are positively motivated into becoming their own boss and a proportion of new businesses are initiated not as a result of an opportunity in the market-place for a new product or service.
Instead, there are so-called “necessity entrepreneurs” who are forced to start their own venture due to a lack of other alternatives or because of negative factors such as a lack of job satisfaction with current employers.
Such influences also include unemployment, the limitation of financial rewards from conventional jobs and job insecurity.
Others are pushed into self-employment through career limitations and setbacks, the inability to pursue their own ideas in a conventional job, and being labelled a ‘misfit’ who doesn’t fit into an established organisation.
Therefore, whether individuals start their business through opportunity or necessity, what seems to drive people to entrepreneurship is mainly independence i.e. not wanting to work for anyone else.
To do so, entrepreneurs will have to demonstrate a great amount of determination, effort and commitment to get to the point where they start and manage their own firm.
In fact, setting up a business can requires taking financial risks and gambling a secure career, which can be a real test when the stability of a family and having a mortgage to pay needs to be considered.
And some would question why a successful employee within a company would leave an interesting job which gives important responsibilities, a good salary and numbers of benefits, especially if it is to establish an uncertain new venture?
Despite these challenges, hundreds of thousands of individuals take the plunge into entrepreneurship every year. However, it is a step which can ultimately result not only in financial rewards but, more importantly, personal fulfilment of a dream to work for themselves, create jobs and make a real difference to the local economy.