The motives of entrepreneurs
set up businesses for a number of different reasons. Most commonly, these fall under three categories: financial, non-financial and social/community, eg social enterprises.
Financial motives relate to an entrepreneur setting up a business to make money, this can either be in the form of income or as business profit.
- Income is the money an entrepreneur takes as a wage or salary. Employees in any business can earn income, but an entrepreneur may prefer to do this whilst working for themselves.
- relates to any money left after all business costs have been taken away from . A business might make a large amount of profit, meaning that an entrepreneur could make more money from their own business, than working for someone else.
Non-financial motives
Non-financial motives relate to an entrepreneur setting up a business for reasons other than to make money. Reasons might include personal satisfaction, challenge, being your own boss and independence.
- An entrepreneur may feel a level of personal satisfaction that they have created a successful business. It may be that an entrepreneur is able to make a business out of a hobby or interest.
- Challenge relates to an entrepreneur setting up a business with the intention that making it successful will challenge them or take them out of their comfort zone.
- Being your own boss enables an entrepreneur to control the business and make decisions about how it is run. These decisions may relate to what the business sells, where it buys raw materials from, and how much its product or service is sold for.
- Independence means an entrepreneur working for themselves and running their own business. They will also make their own key business decisions. A desire for independence is a common reason for an entrepreneur to set up a business.
Social/community motives
Social objectives are linked to doing things in an or environmentally friendly manner, or having a business whose sole purpose is to meet a social or community need. For example, an entrepreneur may aim to provide only products that are sustainably sourced or use only solar energy to power their business. Businesses set up for social or community reasons are referred to as social enterprises.
