Starts with why
The idea is an important thing when you start any business. However, the critical variable you also need to have is the “why”. Why do you want to build a business? Why “you do what you do”?. There are three fundamental reasons why someone wants to build a business: Money, higher purpose, and sentimental value. Each has its own pros and cons and each will define your company's journey far ahead in the future. Read up to fully understand what it entails.
“Knowing why you want to build a business will help you to determine how to run it and its sustainability in the future.”
By knowing why you want to build a business, you can see clearly when you have to decide something for your business, whether to take risks or not, choose to be engaged in the activities that matter most, and choose the right people to partner with. You can align the day-to-day operations to your goal. By all means, it will determine the future of your business. For example, if you choose to solve a specific problem that hasn't been solved you will have more uncertainty over your business finances. Here are three main reasons for people building a business:
1. You Want To Generate Wealth Through Business.
This is the most ordinary reason why people start a business and focuses primarily on revenue generation in the most efficient and effective way. According to the study of The International Entrepreneurship and Management Journal with 29 countries examined, an average of 23% of entrepreneurs are building a business to increase their wealth. While we could argue that money is not everything, having money as your primary reason can be a reasonable reason and it can make you feel more driven.
Respectable amounts of money do matter and perhaps even make you happier on a day-to-day basis. As the owner, the annual compensation you’ll get can be higher than the salary you would earn while working for someone else. Even if the company is sold, there can be a substantial payout to you when you want to get out of the business. Each milestone the company reaches in terms of revenues, profits or market share creates equity for the founders of the business.
2. You Want To Solve A Specific Problem That You Can't Find The Solution On Your Market
This is the daring sea where your solution is not guaranteed to work, a high risk-high reward type of business. This reason comes out from inside of you when you see the existing companies haven’t achieved anything that could improve the world. One reason to start a business is to go after these problems.
However, as we mentioned earlier, it doesn’t always work. So, before you jump into the business, you need to ensure that you’re ready for the challenge and you love the journey of uncertainty. Most entrepreneurs who build a business based on the solving problem are excited about the risk v. reward trade-off. If you determine to relieve the pain of people and build a better future, then you have a reason to go into a business.
3. You Want To Create Something Of Your Own.
Not everyone creates a business for wealth or fame. Some create a business simply because they want to create something of their own. This reason is all about freedom. You have the freedom to create something of your own according to your desires. As a business owner, you still do need to cater to market demand. But when you’re the owner, you’re the one who will choose how to do that.
Starting your own business will give you a greater sense of autonomy. Journal of Small Business and Enterprise Development made a survey by interviewed established entrepreneurs in New York City. The research found: 44% of entrepreneurs said that the freedom of being your own boss was a great advantage of entering the business. When this reason is what you have, you’ll have a sense of pride and confidence. Humility is also important, but some pride and recognition will boost your self-esteem. Such good self-esteem can help you in dealing with obstacles in the future.
Having one of the reasons above, instead of the other reasons don’t make you less good. It doesn't matter which one you choose as a foundation in building a business. What matters are you know why you embark through the journey of making your own business and what it entitles. Knowing your primary goal means you have a great foundation for whatever decision they would take in the future.
For helping you to determine your goals, you can use SMART method. SMART Goals acronym stands for Specific, Measurable, Acceptable, Realistic and Time-bound. It will give direction to what you want to achieve. SMART method will demand you to set specific and objective goals, measure the starting situation, determine the acceptability of your goals for you and your team, assess everything realistically, also count the time taken in achieving your goals. For deeper conversation, You can leave comments on the article and follow our social media.
Conclusion
Knowing your reason for building a business is important. Your reason isn’t just the reason you do what you do but also serves as the consistent reminder which will keep you grounded, energized, and focused. You don’t want to be a “zombie” in running your own business. After all, everything that has reason will sustain longer and work better.
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References:
https://www.entrepreneur.com/article/253360
https://foundr.com/21-reasons-to-start-a-business-today/
https://smallbusiness.chron.com/reasons-starting-new-business-4196.html