Why do you want to start a business?

Before starting a business, it’s really important to understand your motivations for undertaking one of the biggest challenges you may ever face. If you aren’t sure why you’re doing this, then in your darkest hours, you may question yourself and even quit, resulting in wasted time, sweat and money.

Below is a list that outlines the most common reasons for starting a new business, with some of my thoughts on each.

Freedom

Many of us wish to be free from the drudgery of a 9–5 job where we do the same thing day in, day out at the same office for the same people, but how free does starting our own business really make us?

Freedom of movement

Whether it’s simply that you would like to leave the confines of a regular office to go work in a coffee shop or in your garden, or something more extreme such as working on a beach from the other side of the world, being your own boss definitely grants you that power. The main questions that put any limitations on that movement are:

• Where are your customers? Are they all in your hometown or spread across the globe?
  The more spread out they are, the more you can travel for business. The more localised they are, the greater the chance is that you can go to that location for a solid period of month (say 1–3 months of every year to take all your important relationship building meetings) and the rest of the time be spent wherever in the world you’re most comfortable.
• Can your customers be pitched and served remotely?
  If your client base can be serviced over email, you’re in a great position to work remotely. You will likely find in lots of industries, that first-time clients will want to meet you face-to-face, even if it’s not technically required, so you either need to build that travel (and its costs) into your plans or you need to get very comfortable video chatting online with would-be clients.
• Where would you want to be if not in the office?
  If you’re hoping to spend most of your time away from the office in a tropical paradise, you need to realistically assess and figure out the technical logistics, costs and legality of doing so. For example, if you’re an American web developer and your current idea of paradise may be Hawaii, you would be legally able to move there, and it would have all the technical infrastructure to support your working from there. However, you’ll probably find it quite expensive (particularly if you’re having to pay rent back in your hometown too). On the other hand, somewhere like the Philippines would typically be a lot cheaper to live, but you may not qualify for a long-term visa and you will likely find the reliability of the internet (and indeed power) in certain beach locations to be poor. It’s definitely worth visiting places before you settle on working from there, and also talking to other foreigners that live there to figure out how easy it is for you to achieve the lifestyle you’re looking for.

Creative freedom

A really important reason for many people starting their own business, is that they feel restricted creatively by their current employer. Starting your own company is a way to find your voice and flex your creative muscles by having as much control as possible over the processes in which your work is done. However, you will still likely find that the majority of projects that come your way restrict your creativity in some form or other, whether it is through the size of the budget or simply a difference of opinion with the person paying for your work (i.e. the client). I found the latter to be particularly true when I ran my boutique web development company, Evocative. Most projects would begin with 2 or 3 very different web-page mockup designs, and the client almost always picked the 1 I least preferred.

You can eventually break through into really creative projects, but expect that it will probably take a few years within which you need to build up a track record of success and cases that can help build clients’ trust that your creative ideas are better than their vision for what they wanted.

Hierarchical freedom

Many people don’t want to be working for “The man” or anyone but themselves. Starting your own business can certainly free you from a direct superior. However, you’ll find your supervisor has merely been replaced by direct contact with the person giving you money for your work — the client. And, like a boss, what they say goes if you want to get paid. In future, I’ll discuss how to identify potentially troublesome clients and how to prevent clients from getting out of control.

Fortune

For many people, the concept of becoming an entrepreneur is all about getting rich, and hopefully doing so quickly. I would warn against money being your primary motivator for going into business for yourself. If you’re not truly passionate about the idea/business you’re starting, it’s likely you’ll neither be motivated enough to see it through all the hard times you’re going to face, nor will you enjoy the ride (which is best part!)

If fortune is your primary motivator, you can make decent money more easily working for someone else. It is unlikely to end in a huge payday of course (Where selling out your own business might), but it will likely be more stable and less stressful over the long term.

With that said, if you are looking to make a lot of money from your own business, you need to ask yourself a few questions:

• Is what I’m selling highly profitable?
• Do my products or services I’m selling have a large profit margin?
• Am I able to charge a lot for my time or the work I do?
• Is my business idea easily scalable?
• How will I compensate myself?
• Am I willing to sell my company?

I’ll help you find your own answers for the above questions in future.

To do good

In the past decade, there’s been a huge shift towards socially conscious ventures — those whose mission and products are geared towards improving the planet and/or people’s lives. One example you may have heard of is Toms shoes, who popularized the idea of buy-one-give-one — For every pair of Toms you buy, one pair is given to someone in need. Now is a great time to start a company that cares — The costs of doing so are becoming relatively lower, as consumers are typically willing to pay a bit more for ethically made products.

On the flipside, the Internet has meant that a company (or rogue employee) behaving badly can quickly be outed by anyone with a smartphone, and irreparable damage can be done to it, so there’s in fact more to lose if you don’t plan to be and do good from the start.

So how are you going to do good with your company? It doesn’t have to be hard, there’s a couple of simple models you can easily build into your company from the start. Don’t forget to include these in your cost calculations later on:

• X percent of your profits go to charity
  Have an official tie-up with specific charity that means something to you or the industry you’re in. Make sure that you can use their logo, participate in their offline events and even donate some of your employees’ time to helping the charity out in a practical way beyond money.
• Buy one/give one
  If you make a product that people need, and you can make enough profit on selling one of those to a customer, that you can afford to give one to someone in need, you should do that.
• Source responsibly/ethically
  You should aim to do this anyway, but go the extra mile and make sure all your suppliers/components are coming from people who are paid and treated fairly for their work and using materials that are similarly ethical. It can be a hard task, particularly as it will eat into your profit margin, but your customers will thank you.

Personal growth/challenge

When you start a business, you’re guaranteed to grow in multiple ways. The tough challenges you face require you to look at your of skills, understand your potential consumers, and learn how to manage and trust others to work with you.

Personally

Many of us lacked discipline and motivation when it came/comes to things like schooling and household chores, but you can’t be that way with your own business, or it will quickly die on the vine. The good news is, if you have chosen to begin a venture in an industry or field you care about, your motivation should drive you to build those good daily habits for getting things going.

Relationally

Running a business by its very definition of selling products or services to others requires you to interface with others. Regular interaction with customers, suppliers, staff and other parties is unavoidable, and you need to get good at it if you’re to have any measure of success.

Technically

Wanting to be better at your craft is something many of us strive for. Having your own business in which you practice your craft is the perfect way to get better at it, while (hopefully) making money from it.

Vanity

Let’s be honest, many of picture ourselves on the cover of industry magazines and seek admiration from our peers. There’s nothing wrong with dreaming big of course, but as with money, don’t let vanity be a primary motivator for you. Those things are the spoils of the success that comes from passionately pursuing excellence in your career/venture, so make sure you’re doing something you love first and foremost. Success and true recognition ultimately come to those that perfect their craft/industry over time and act humbly about it.

That concludes the key reasons I think people start businesses. Can you think of any others? Why did you start your business? Let me know.