Expert Insights: Agreements Online Explains the 6 Key Reasons People Start Their Own Businesses

Meet Simone. She’s bright, well-educated, honest and hard-working. She holds down a dream job, earns a fantastic salary, is virtually guaranteed of a healthy performance bonus each year, is frequently showered with accolades…. and she’s just handed in her resignation. Simone’s boss is unable to mask her shock when confronted with the bombshell, and rapidly sharpens her pencil and hauls out her calculator. Whatever the competition’s offering, the company will match it and some. Imagine her surprise when she discovers that Simone – her star employee – will be earning…. nothing. At least, not until her new business venture is off the ground and making money. What drives a person to leave a stable job and guaranteed salary for the instability of self-employment and zero guarantee of an income? Let’s face it. Starting your own business requires money, many (many!) hours of hard work, the patience of a saint and a positive attitude even in the face of adversity. Not to mention a healthy dose of realism, understanding that you may not be seeing much of an income for the first year or more, and may well face closure before then if the stats are anything to go by. According to Fin 24, small business failure rates are as high as 63% in the first two years of trading! Yet people still start their own businesses on a regular basis. Why do people choose to start up their own companies? What drives an entrepreneur to do what they do? Are they born, or are they a product of circumstance?

Here are some of the top reasons why entrepreneurs start their own businesses.

Financial Rewards

Some are attracted by the higher earning potential associated with self-employment, whether real or perceived. From Kiyosaki to Trump, from Buffett to the Dragon’s Den, to the plethora of self-help authors that swamp our bookshelves, we have been overwhelmed by promises of wealth if only we displayed a positive attitude and followed our passion. In reality, few achieve the stratospheric financial success of Branson or Bloomberg. But if you want to remove that ceiling on your salary, self-employment is one of the best ways to do it.

Retrenchment

Retrenchment is an unfortunate reality for many. And coupled with a difficult economic climate and a soaring unemployment rate, re-employment can prove difficult. For some, re-employment is nigh impossible. Faced with a choice between the streets and self-employment, it’s no surprise that many people choose to treat retrenchment as an opportunity as opposed to a tragedy.

Flexibility

Some people want or need the more flexible working situation that fixed employment invariably cannot offer. That regular eight hour day working for a boss often starts near dawn and ends around midnight. And heaven forbid that your kid gets sick or your dog needs the vet, because that would require – horrors – time off work! There is a preconceived notion that it’s only working mothers who tend to leave their jobs in favour of more flexible working hours. But in truth, the extended working hours, limited time off and excessive pressures that accompany many a job can, over time, become unbearable to many men and women. Self-employment affords you the opportunity to dictate your own working hours and time off. Of course, many starry-eyed entrepreneurial newbies soon find self-employment to be even more demanding than their previous jobs. But at least when you do need time-off you don’t have to explain yourself to an unsympathetic boss or produce reams of documentary evidence justifying your absence from your desk.

Dissatisfaction with work

Some people find themselves in a situation where their current job is simply not one that they wish to remain in. Perhaps your job, while doubtlessly necessary, is about as exciting as watching paint dry. Perhaps your boss is Satan’s spawn in Armani, and one more day of working with him could compel you to assassinate him in a quest to preserve your own sanity. Perhaps your contributions are going unnoticed, your skills are underutilised or your attempt to zen the office is underappreciated. Whatever your current working conditions may encompass, it is seldom that someone who is genuinely and unreservedly happy in their job would unexpectedly leave to start their own business.

Lightbulb Ideas

The world is full of people with great ideas. It takes a special type of person to have enough faith, confidence and drive to take the next step towards bringing those great ideas to fruition. And those that do – well, we call them entrepreneurs. And humanity is truly indebted to them. Many life-changing inventions would have remained nothing more than pipe-dreams if their inventors hadn’t chosen the road less travelled.

Being the Boss

Many small business owners start their own business in order to be their own boss. In the corporate world everyone reports to someone else. The salesman reports to the regional manager, the regional manager reports to the Sales Director, the Sales Director reports to the Managing Director, the Managing Director reports to the shareholders. If you start up your own business, the only person you have to answer to is yourself. Being your own boss gives you the freedom to do things your way and implement your own plans. As the adage goes, when you’re self-employed you have a slave-driver as a boss. And you wouldn’t want it any other way.

What next?

The decision to start your own business is but the first step in the process. Hopefully your choice is accompanied by a passion, a dream, a solid work ethic, commitment, focus, a positive attitude, tenacity, and a willingness to do what it takes to succeed. Once you’ve checked these boxes you’re ready to begin: now the hard work really starts. Check out the contracts, legal agreements and other business documents here on Agreements Online, and make sure that you have everything you need before you open your doors to business.

Please note that this information is supplied for general information and does not constitute legal advice. It is advisable for you to contact a legal practitioner for guidance in respect of your unique requirements.