- Growth.
- Earnings.
- Transfer and inheritance: used for something that they can pass on (transference) to their children (inheritance) to give them a sense of security.
- Challenge: drive to have personal satisfaction, being successful boosts self-esteem.
- Autonomy: being your own boss, making decisions about the business, work hours, holidays etc.
- Security: if you are your own boss, you cannot be made redundant, dismissed, or be replaced with technology.
- Hobbies: just for fun, or because you are passionate about something.
Starting a business is a significant endeavor that individuals undertake for a variety of reasons, each motivated by different aspirations, circumstances, and personal values. Understanding these motivations is crucial for IB Business & Management students, as it offers insights into the entrepreneurial mindset and the diverse factors that influence the decision to launch a business. This comprehensive analysis explores the reasons people choose to start businesses, from the pursuit of growth and earnings to the desire for autonomy and security, supplemented by industry examples.
Growth
Entrepreneurs often start businesses with the ambition of achieving growth, both personally and professionally. They seek to expand their operations, enter new markets, and increase their market share.
Example: Jeff Bezos founded Amazon with the vision of creating the world’s most customer-centric company. Starting as an online bookstore, Amazon has grown into a global e-commerce and cloud computing giant, exemplifying the pursuit of business growth.
Earnings
The potential for higher earnings than employment can offer is a compelling reason for starting a business. Entrepreneurs are attracted by the prospect of uncapped income based on their company’s success.
Example: Sara Blakely founded Spanx with $5,000 in savings and turned it into a billion-dollar brand, demonstrating how entrepreneurship can significantly surpass the earning potential of traditional employment.
Transfer and Inheritance
Many entrepreneurs start businesses with the intention of creating something of value that can be passed on to their children, providing them with financial security and a lasting legacy.
Example: Walmart, founded by Sam Walton in 1962, has been passed down through generations, with his descendants maintaining significant involvement in the business, showcasing the value of transfer and inheritance.
Challenge
The drive to overcome challenges and achieve personal satisfaction is a powerful motivator. Success in entrepreneurship boosts self-esteem and fulfills the desire to accomplish meaningful goals.
Example: Elon Musk’s ventures, including SpaceX and Tesla, were driven by the challenge of solving significant problems—reducing space transportation costs and accelerating the world’s transition to sustainable energy.
Autonomy
The desire for autonomy—being one’s own boss and having control over decisions, work hours, and operations—is a primary reason many choose entrepreneurship.
Example: Richard Branson, founder of the Virgin Group, is known for valuing autonomy, which has allowed him to venture into diverse industries according to his interests, from music to airlines to space travel.
Security
Some individuals start businesses to achieve job security, under the premise that being the owner reduces the risk of redundancy, dismissal, or replacement by technology.
Example: Many small business owners, such as local restaurant or shop owners, value the security of controlling their source of income, even in industries facing technological disruption.
Hobbies
Passion projects or hobbies can evolve into businesses when entrepreneurs decide to turn what they love doing into a source of income.
Example: Phil Knight, co-founder of Nike, turned his passion for running and sports shoes into one of the world’s most recognizable athletic brands, illustrating how hobbies can inspire successful business ventures.
Conclusion
The motivations for starting a business are diverse, ranging from the pursuit of growth and earnings to the desire for autonomy, security, and the challenge of entrepreneurship. These motivations reflect the complex interplay of personal aspirations, financial goals, and lifestyle choices that drive individuals to embark on entrepreneurial journeys. The examples of Amazon, Spanx, Walmart, SpaceX, Tesla, the Virgin Group, and Nike highlight the varied paths entrepreneurs can take, emphasizing the role of personal motivation in shaping the direction and success of their ventures. For IB Business & Management students, understanding these motivations provides essential insights into the entrepreneurial process and the factors that influence the creation and development of new businesses.
