CEO and Business Coaching
Why Do People Start Businesses? 3 Motivations That Drive People To Become Entrepreneurs
Small businesses, which are an essential part of the U.S. economy, have created more new jobs since the 1970s than their corporate counterparts. Each year, over 500,000 small businesses are created. Today, more and more professionals are taking on the role of entrepreneur. However more businesses fail than succeed in the first 5 years, so why do people start businesses?
What types of professionals decide to make this leap and become business owners? Generally speaking and in my experience, this challenge is selected for one of three reasons:
Lack of Employment Opportunities
The U.S. economy has grown to support more jobs in the past decade. There is a trend, however, towards a higher rate of contract, short-term, and part-time work. While the companies that hire are scaling back, our schools continue to turn out highly trained folks with specialties such as law, architecture, design, acupuncture, naturopathic medicine; accounting and other disciplines. Traditional employment opportunities are not as plentiful as they once were. The Wall Street Journal recently had a great story about the record numbers of MBAs, many of whom can’t find private-sector work.
As a result, more professionals make the decision to go into business on their own or with a partner. While it is perhaps not their initial objective, it becomes the most practical solution for securing a full-time occupation. However, while you have the skills for your profession, you may not have been trained with the requisite skills for business.
Desire for More Control
Some folks, who have been practicing their profession for a few years, have reached a point where they feel capable taking the reins and want to control their destinies. They have their own vision for how they want the practice to operate, what their profession means, and the types of clients or markets with which they want to work. They are committed to their vocation and would prefer to be in the position to call the shots.
Interest in Owning a Business
For others, there is a certain cache around being an entrepreneur. They started in a professional niche, and now their interests have progressed. They recognize that running a business is a vocation in and of itself, and they’re prepared to learn more about it. They may have natural talents for sales and enrollment conversations and for networking and managing people. They want to become a businessperson.
Whatever motivates a practitioner entrepreneur, the transition is best when not undertaken lightly. The first two categories of entrepreneurs can easily encounter obstacles when dealing with the intricacies of running a business. Working solo is a demanding situation and, when carrying these weights alone, frustration is common. Underestimating or undervaluing the demands of running a business, such as being responsible for marketing, selling, producing the work, and perhaps hiring your first admin person, can lead to overwhelming feelings of being too busy and juggling too many balls.
Neglect the Business at Your Peril
Practitioners are trained to focus on their work and get the job done. This is important, but we can run the risk that, while we’re working, our business sales, marketing, client recruitment, and human resources are neglected. Out of necessity, entrepreneurs tend to work in the business and not on the business. If a business is to grow, it is important to make the shift to working on the business. The world looks so different from this perspective.
Business coaching can be a tremendous asset in helping entrepreneurs draw the line between what they do professionally and how they run their businesses. Regardless of the reason for going into business in the first place, they need to take on the mindset of an entrepreneur to ensure that their ventures are successful. The right tools, strategies, and coaching support can help them do that. To set up a free discovery coaching session, contact Michael.
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