21 Reasons to Start a Business Today
They’re all reasons to start a business. But those four aren’t it–there are many more.
A study in the International Small Business Journal found a “dynamic relationship between motivation profiles and career, household and business life courses.” Different people start businesses for different reasons.
There are no right or wrong reasons, and, yeah, maybe there are good reasons that you shouldn’t start a business right now. But entrepreneurship has proven itself life-changing for so many people, so it’s more than worth considering.
In this post, I’ll detail 21 reasons why you should consider starting your own business. I’ve integrated images, statistics, graphs, quotes, lists, and links to other resources–all in the hope that this post will be useful to you as you think about leaping into the world of business.
1. You Can Find Freedom
Freedom is the golden promise of entrepreneurship. Over and over again, entrepreneurs that we interview for Foundr Magazine point to autonomy, to independence, as a key driver of their decision to start a business.
This isn’t just a little anecdote I’ve noticed. It’s a huge reason that people become entrepreneurs.
In 2008, the academic International Entrepreneurship and Management Journal put out a paper with some stats from a global survey of early-stage business owners. Independence was the most common reason these people gave for starting their business:
- Within the 25 countries the study looked at, an average of 38% of beginning business owners cited independence as a motivation.
- Independence served as a reason for 35% of entrepreneurs in the US and 39% in the UK.
- In Australia and Japan, 57% of beginning owners pointed to independence as their motivator.
Why does this fervor for freedom move people to hurl themselves into the crazy world of business? Freedom is having more control over the course of your life, having the power to direct it in the ways that you want, rather than working for the whims of others.
Owning your own business means being your own boss, deciding when you work, how you work, and what you work on.
Of course, business owners still do need to cater to market demand. But when you become the business owner, you choose how to do that. It gives you greater autonomy.
Marco van Gelderen, a business psychologist whose specialty is entrepreneurship, writes about why autonomy is so great:
“Autonomy represents an inner endorsement of one’s actions—the sense that one’s actions emanate from oneself and are one’s own (Deci & Ryan, 2000). Autonomy pertains to striving toward the development and realization of personal goals, values, and interests (Assor, Kaplan, & Roth, 2002). Autonomy extends beyond having decisional freedoms to self-awareness, knowing what one’s dreams and aims are, and acting on those dreams and aims.”
The research seconds the impression that, ultimately, starting a business helps you go after your dreams. A 2008 survey in the Journal of Small Business and Enterprise Development interviewed established entrepreneurs in New York City and found that 44% said that the freedom of being your own boss was a great advantage of entering business. Here’s what one of those entrepreneurs wrote:
“There are several advantages that make owning your own business very attractive. Going into business for yourself means increased independence and having more flexibility to do the things you want to do.“
2. You’ll Build a Source of Pride
Pride isn’t just a deadly sin–in healthy doses, it bolsters your self-worth and lets you take credit when you achieve something worthwhile (like creating a successful company).
Starting a small business is no small venture. You’ll pay for it in sweat, working hard to move onward. But that’s okay, because entrepreneurs don’t shrink from effort or retreat from challenge. We aim to do big things.
That’s not empty rhetoric, either. Just read this paper from the Human Performance journal, in which researchers set up a meta-analysis (a study of other studies) that looked at dozens of previous peer-reviewed publications. They wanted to see if people’s level of motivation to achieve things involving effort and skill linked with their career choice. It did:
“Individuals that pursue entrepreneurial careers are significantly higher in achievement motivation than individuals that pursue other types of careers.”
The Journal of Business Venturing conducted a survey of 405 British entrepreneurs and saw that almost 65% went into business at least in part because they wanted to achieve something and be recognized for it.
While some humility is still important, that pride and recognition can boost your self-esteem. Why care? A review of research literature published by Psychological Science in the Public Interest found that self-esteem works some pretty great magic. It gives you:
- More confidence in group settings
- More persistence
- Greater happiness
3. You Can Do Things Better
No existing company does everything right. Waste and inefficiency do saddle private sector, and beyond the balance sheet sits the simple fact that we haven’t yet invented everything that could improve the world. One reason to start a business, then, is to go after these problems.
Think about your everyday life. Is everything perfect? No. At least now and again, you encounter things that annoy, pester, and drain you. You wish there was some way to beat these issues, but there isn’t, so you sigh, complain, and move on, hoping that someday it gets better. But if that’s you today, it doesn’t have to be, because each little annoyance you stumble into could be a business opportunity. There’s another approach:
- When you have a problem in life, ask yourself: Does a good solution already exist?
- If not, do other people have this problem?
- If they do, consider starting a business based around a new solution to your problem.
Again and again, in almost every article I’ve written for Foundr, the amazing entrepreneurs we interview stress this point: meet a need, solve a problem, profit.
Examples abound. Traditional Q-tips posed a safety problem to people’s ears, so one California team created the Oto-Tip, which aims to solve that problem (and netted them $77,000 in crowdfunding money to bring their company to life).
A few young men in the 1970s saw a problem with the difficulty and complexity of personal computing, so they tried to solve it by creating a new operating system. Today, we call that company Microsoft.
If you can relieve a pain point for people, then you have a reason to go into business.
4. You Can Make Money
A successful business could earn you lots of money. Arianna Huffington, founder of HuffingtonPost, has a net worth of $51 million. Richard Branson, the entrepreneur behind Virgin, had a net worth of $4.9 billion. Then there’s Bill Gates, who started Microsoft. He’s sitting at a nice $81 billion.
Money is a big reason that many people start businesses. The International Entrepreneurship and Management Journal study I mentioned earlier points out that, across the 29 countries examined, an average of 23% of entrepreneurs are in it (at least in part) to increase their wealth. While it’s a common motive, the percentage of entrepreneurs who embrace it varies between countries. Here’s a sampling:
- Australia: 11%
- United Kingdom: 15%
- New Zealand: 26%
- Mexico: 30%
- United States: 35%
- Chile and Greece: 42%
While the variations between countries are intriguing, the main takeaway for our purposes is that lots of people start businesses because they want to make money.
Of course, money isn’t everything, so wealth isn’t the only motivation that these entrepreneurs have. It’s just one reason among many. Even if you do care a lot about money, it’s true that most people, even most successful entrepreneurs, will not reach the stratospheric wealth of Huffington, Branson, and Gates. But respectable amounts of money do matter, and might even make you happier.
It’s said that money doesn’t buy happiness, but that old adage doesn’t quite jibe with modern research. Some scholars say that after a certain amount of income, more money doesn’t make you happier. But even they conceded that up until that point, more money does help.
The Huffington Post wrote about a recent study that took that cutoff point as $75,000 (earning more money after about $75k per year doesn’t boost emotional well-being, according to these authors). They made a neat map showing that cutoff in yearly earnings for each U.S. state:
If this research is true, then a successful business could catapult you over the cutoff line.
But this isn’t the final say on the matter. A different set of researchers contends that there isn’t a cutoff point–that more income always makes you happier (or, at least, that whatever the cutoff is, we don’t have substantial numbers of people who’ve reached it). The Wall Street Journal graphed the study results:
I think that these empirical findings, while interesting, underscore the fact that this issue isn’t like a clear, crisp day. There’s a lot of fog, and you have to figure out what works for you, how you can best balance the drive for money with other parts of the good life.
But no matter how much you care about money, it isn’t the only reason to think about starting a business. Let’s keep going through the reasons.
5. You’ll Learn New Skills
Don’t think that you need an MBA (most of the successful entrepreneurs profiled by Foundr don’t have one). This isn’t the corporate world–starting your own business is a different critter, and in many cases, you can pick up the skills you need as you go.
In fact, many people start businesses because they want to learn new skills. It’s a dynamic way to grow your know-how.
Just a bit ago, I mentioned the Journal of Business Venturing survey. It also found that education is a big reason that entrepreneurs go at it: 65% of the people interviewed said that they started their business, at least in part, to keep learning.
Why does learning fill so much of the plate here? Starting a business takes more than your idea. You need the skills to make it a reality and bring in customers. Entrepreneurship lets you learn those skills as you go and apply them along the way.
Here’s just a few of the skills that many modern business owners find essential. On each item I’ve linked to a guide that can help you learn the skill:
- Search engine optimization (SEO)
- Online marketing / growth hacking
- Social media
- Business budgeting
Since you probably can’t be an expert in everything, you can also pay others to do some of these things (hey, us freelancers have to stay in business somehow). But the more you learn, the more you can do yourself.
Okay, so starting a business can help you learn new skills. Why should you care?
First, I’d say that learning is fun. Being able to do new things is just plain cool. But second, it carries psychological benefits, since (according to a study published in Psychological Science) learning new skills boosts your memory, even as you age.
Besides, in a world that seems ever-quickening, keeping up has it’s perks. Joyce E. A. Russell, vice dean at the University of Maryland’s Robert H. Smith School of Business, put it well:
“All around the world, people are going back to school, taking online courses, mastering additional languages, etc. — all in the spirit of growth and continual learning. With today’s more complex business environment, learning is not just a nice thing to do — it is essential for staying on top of things.”
Interested in the skills needed to start your own business? Get started with these articles by Inc. and Forbes. Then check out Lifehacker’s piece on the science behind how we learn new skills. Oh, and Nathan did a neat Foundr podcast about skills.
6. You Might Lower Your Taxes
This obviously won’t be your chief reason for starting a business, but it helps. As a small business owner, you may be able to get tax breaks that help your business–and even tax breaks that ultimately help you as an individual.
(Just a quick disclaimer: I’m no tax expert. You should look up the laws in your country and talk to a financial professional before making any decisions or taking any deductions.)
Since I live in the US (and the most readily available online reading focuses on the US), I’ll focus on what the Americans reading could get for their taxes by starting a business. Here’s the first bit, from the widely beloved IRS itself:
“Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit.”
What this means, according to the Houston Chronicle, is that you might get to deduct things like magazine subscriptions, phone services, travel mileage, and membership in professional organizations. Heck, if you work in a home office, you might be able to swipe some of your rent off taxes. If you need something to run your business, then it might qualify for a deduction.
The IRS also helps mitigate risk for American entrepreneurs. According to Mashable, you can write off any losses from your business, which means that a side business could help your tax return.
Over on his blog, Steven Chou calculated that the average American could get something like a 10% write-off by having a business.
7. You Could Create Jobs
If you start a company, you might one day need to hire employees. On that day, you’ll have created an opportunity for someone else.
Sure, when you first start out, your business will be small. But that’s not bad, because it’s often small businesses that create jobs. For example, the US Bureau of Labor Statistics (BLS) reports that small firms create 64% of new jobs in the US.
That’s why the BLS said that “entrepreneurship plays a vital role in the growth of the U.S. economy.”
Just below I’ve inserted a graph of jobs created in the US. This graph (from the BLS) focuses on new businesses–the kind of venture, by definition, that you would kick off.
The fact that small businesses create jobs isn’t an American anomaly at all. Just look at this graph from a report by the Australian government:
And let’s not just look at the raw number of new jobs. There’s more to it. As the owner of a company, you could treat your employees well, create a stellar company culture, and make people feel like they’re involved in something that’s worth it. Be the boss you wish you had (or, perhaps, emulate a great manager you’ve worked under).
I wouldn’t be writing this article if Nathan hadn’t created Foundr. I love this gig, and it’s an opportunity that never would’ve existed if Nathan hadn’t started his business. These are the small things that make a difference in people’s lives.
8. You Can Follow Your Passion
Whether to start a business is a decision you must make. There’s another thing you get to decide: what that business does.
One reason to start a business is so that your job can be something that thrills you. Most people would love to have work that centers on something they care deeply about. It’s time to break out your passion.
Let’s get real: not everything you enjoy could make a business that makes money. Let’s use a silly example. I love watching The Colbert Report, but nobody will pay me to watch it. Even if the show wasn’t ending, nobody would pay me to watch it.
Superstar entrepreneur Chris Guillebeau points out this reality in his book, The $100 Startup (a short read that I readily recommend).
But you don’t have to give up on turning your passions into a business–you just need to be pickier. Not everything will work. But something might.
What’s the trick? Convergence. Check out the diagram on the right. Chris explains that you need to think about your passions and what other people are willing to spend money on.
You will find your business idea where those two overlap. That’s how you can raise up a successful business while still engaging your passion.
That’s exciting. But it’s more than that, because it’s also useful. Passion doesn’t just make a business fulfilling–it might make it successful. There isn’t much research in this area, I’ll admit, but a 2012 paper in the Human Resources Management Review suggests that the work that has been done shows that passion for the work has a direct, significant effect on company growth.
9. You Can Live With Excitement
Freedom, money, skills, pride, passion–and uncertainty–all blur together to spawn excitement. Starting a business can get you pumped!
Entrepreneurship amounts to an ever-changing challenge. New things pop up, big goals loom ahead, and you’ve got to hustle, hustle, hustle.
A factor analysis study in the Journal of Small Business Management looked at why entrepreneurs kept going. One reason—one that had the most weight in the researchers’ “intrinsic rewards” category—is that these business owners enjoyed the excitement of entrepreneurship.
You only need to spend a bit of time in the blogosphere’s entrepreneurial niche to see that it’s an exciting environment.
Entrepreneurship is a race to overcome obstacles and a grand journey into uncharted territory and a jaunt to a crazy theme park whose rides you built.
These are metaphors that describe starting a business, and we can learn a lot from the metaphors we use. A study in the Journal of Business Venturing found that many of the metaphors we use to talk about starting a business “are dynamic in nature, emphasizing the constant drive forward, the excitement of the process, and its creative nature.”
That’s key: the excitement of the process. What the study points out is a reality that you can see for yourself if you read blogs about entrepreneurship, a reality that in many ways, starting a business isn’t only about the company you’re creating.
It’s about how you get there, and the intersection between dreams of the future and the process right now can exhilarate.
That’s the excitement of entrepreneurship.
10. You Can Leverage the Internet
Foundr is an entirely online business–and it works. The Internet is fertile soil for business growth.
Businesses can leverage the Internet to advertise, blog, poll customers, sell products, and reach a wider audience than ever before. Fortune sums up why the web is a mighty reason to start a company:
“There’s likely been no better time to be an entrepreneur. You can reach global markets, use technology to have smaller and smarter back office operations, and all the while, continue to be nimble and create innovative products and services.”
There’s a word for all this buying and selling on the Internet–ecommerce–a word whose importance has been magnified by the growth of online business. Here’s the US data since 2005, from the Census Bureau:
Yep, ecommerce has grown steadily. It’s not here to sprint, pant, and die. It’s here, marathon-like, for the long term.
No, this isn’t just a fluke from US stats. Globally, online sales are worth at least $1,251,4 billion this year, as Statista attests, and it’s only projected to grow more:
The Internet also offers a host of tools that make starting a business easier. For instance, the power of the web lets you collect data on visitors to a company website, which you can analyze and use to inform A/B testing (another neat web trick; check out Neil Patel’s excellent guide).
For more info about online business, try this publication from the Australian government.
11. You Can Escape the Rat Race
The beginning of this Huffington Post article really struck me:
Have you had enough of the nine-to-five (or should they call it the seven-to-seven?), the pointless rounds of meetings, and wondering if this is what life’s really about?
That’s dismal. That’s dreary. And for too many people, that’s what their job feels like. 65% of American workers, for example, are unsatisfied with their job.
The article quoted above is titled “10 Tell Tale Signs You Are Ready to Leave the Rat Race,” but I’m not sure we need an article about those signs. So many people feel worn down by their careers that we’ve invented this term–rat race–to describe how futile it sometimes seems. Seriously, it’s in Urban Dictionary:
For many, the solution is to escape the rat race by starting their own business. It’s a reason that differs from most of the previously listed ideas in one key way: in this case, you’re starting a business not to get to something (money, passion, freedom, etc.), but to get away from something (the rat race).
It’s what geographers and sociologists call a “push factor.” Some people are pushed into business by the crushing reality of the rat race. Alongside some of the other reasons I’ve listed, it can be a powerful motivator.
This push factor is real. A whopping 40% of Australians are unhappy with their job. UK workers are more dissatisfied than workers in other European countries. Job satisfaction stands–no, lays wounded–at its lowest level in two decades.
A 142-country Gallup poll found that less than 13% of employees feel engaged and committed at work.
A business of your own isn’t easy or stress-free, to be sure. But it’s yours: the freedom, pride, and passion of entrepreneurship make it a great alternative to the rat race.
There’s another part of all this, too. Not only do many people hate their jobs, but many live in fear that they’ll lose their livelihoods: less than half of American employees, for example, feel that they have job security.
That’s exactly why many people start their business. They enter entrepreneurship out of necessity, after getting dumped out by their jobs or fearing impending unemployment. In countries like the US or UK, it’s a smaller percentage, but it’s still a real reason that you might want to start your own business:
12. You’ll Have Meaning and Purpose
A business can be a fantastic source of meaning in your life.
Meaning, or purpose, matters. It differs from happiness, which I talked a little bit about earlier, in that happiness is made of moment-to-moment pleasures, while meaning stems from an overarching sense of purpose.
Starting a business is a grand project. If you’re serious about it, then it immediately carries purpose.
Commitment strengthens that sense of purpose, and ownership strengthens commitment. In one neat experiment, researchers ran an experiment that divided the test subjects into two groups of people for a lottery. Members of one group was randomly assigned a number for the lottery, while members of the other group got to write down a number of their choice.
When the researchers offered to buy back the lottery tickets, the people who had chosen their own number demanded, on average, five times as much money for their ticket, even though their choice didn’t give them a statistically higher shot at winning the lottery.
That shows the power of ownership. It brings commitment. People who own their own business are committed to it, which strengthens their sense of purpose.
Freedom and pride and excitement and commitment collide to make meaning—that sense of purpose, of drive, of overwhelming worth.
I think we can agree that a meaningful life is a desirable life. But if you don’t buy that, consider the fact that a life without meaning can actually be unhealthy.
This information comes from an incredibly intriguing study in the prestigious Proceedings of the National Academy of Sciences.
A team of researchers looked at gene expression, which is when the information coded in a gene is used to make a protein or some other cellular product. In a way, gene expression turns on certain genes. When you’re under a lot of stress and adversity, your body turns on more inflammatory genes. What the scientists found built on that understanding—and twisted it in new directions.
When looking at the gene expression profiles of the adults in the study, the researchers saw that high levels of happiness, just like adversity, turned on inflammatory genes. The problem with that is huge, because they noted that this kind of undesirable inflammation can lead to heart disease, brain disease, and cancer.
But the findings aren’t all sky-is-falling awful. While self-indulgent happiness alone might spell bad news, the scientists found that high levels of meaning clamped down on inflammatory genes. Striding through life with purpose can boost your health.
13. You Can Innovate
Starting an innovative business would let you be a part of that.
Many entrepreneurs have sprung into action due to a desire to innovate. The Journal of Business Venturing study I cited earlier says that 41% of UK entrepreneurs launched their businesses, at least to some extent, because they wanted “to be innovative and to be in the forefront of technological development.”
Is this whole innovation thing nothing more than one buzzword and a pair of dice? Nope. The Global Entrepreneurship Monitor’s 2013 Global Report found that lots of entrepreneurs innovate in entirely new ways. Here’s a graph from the report:
14. You Might be Able to Bootstrap
You don’t always need lots of cash on hand to start a business.
Some people fear starting a business because they don’t have trainloads of cash to dump into it. While capital helps, however, you don’t always need huge investment to launch a successful venture. Credit cards, loans, and venture capital aren’t the only answer. There’s bootstrapping.
Investopedia defines bootstrapping:
“A situation in which an entrepreneur starts a company with little capital. An individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company.”
Besides letting you avoid loans and begging, bootstrapping gives you independence. It might be harder to start if you’re funding your own business, but once you get going you won’t be beholden to anyone who gave you money–because you provided all the money needed.
Bootstrapping constitutes a reason to start a business because, along with the Internet, it lowers the barrier of entry. A lack of money doesn’t have to stop you, and because you know about bootstrapping, you can think consciously about how to do it.
Even entrepreneurs who don’t know about bootstrapping often use it. A 2012 CEFAGE working paper reports that even though 83% of the Portuguese small businesses they interviewed hadn’t heard the term bootstrapping before, all of them used at least one bootstrapping technique.
If you’re interested in diving deep on this one, check out The Bootstrapper’s Bible, a free manifesto by Seth Godin.
15. You Could Get Money for Causes You Care About
One great reason to start a business is that it could help you get money that you can use to do good in the world.
We live on a globe rife with problems, and often, a lack of funding causes those problems. A successful business would put you in a place to do something about that.
Many entrepreneurs do this. In 2013, Facebook founder Mark Zuckerberg and his wife Priscilla Chan donated over $970 million to charity.
That same year, Nike co-founder Phil Knight donated $500 million to Oregon Health & Science University, a non-profit hospital.
Then there’s the Gates Foundation, created by Bill and Melinda Gates to address problems in the US and worldwide. Each year, the organization pours billions of dollars into fighting HIV, tuberculosis, and malaria; creating clean sanitation in the developing world; working to decrease maternal mortality and boost healthy childbirth worldwide; and supporting public libraries around the globe. Since its founding, the Gates Foundation has granted over $31.6 billion to charitable causes.
Okay, you might think, that’s all awesome, but those are big players: these are people who found wild success and are rolling in the dough. Fair enough. But you don’t need to net billions with a business to use money for good.
A 2010 Ernst & Young survey of entrepreneurial award winners is a good starting point (see the executive summary here). It found that 89% of entrepreneurs donate money to charity. What’s more, 61% think that they’re more likely to give to charity because they’re an entrepreneur, and 70% also donate their time to good causes (there’s that freedom and independence at work).
I’m inclined to say that the study’s methodology isn’t the greatest (if you want to read the study and comment below with your thoughts, please feel free), but it does underscore that existing entrepreneurs can (and do) use their money for good, and so can you. Starting a business can be that first step.
16. You Can Consider Social Entrepreneurship
So far I’ve talked about reasons that might prompt you to start a more conventional commercial business. But that’s not the full extent of entrepreneurship. If you embrace the idea of doing good through business, but want to focus even more exclusively on that, then social entrepreneurship may be right for you.
Duke University professor J. Gregory Dees explained what social entrepreneurship tries to do:
“Social entrepreneurs aim to disrupt industries and revolutionize processes, just like any business entrepreneur, but they also more directly look away from market value and toward social value.”
The “social” part means that social entrepreneurs primarily aim to improve society, rather than profit (much like charity).
Social entrepreneurship is a term that means different things to different people, but I like to take a broad view of it. The kinds of businesses and organizations that social entrepreneurs form, according to the Global Entrepreneurship Monitor, range from purely social efforts to ventures that mix social and commercial motives to simultaneously running social and commercial organizations that have complementing goals.
Social enterprises–the kind of “businesses” that you might start–are equally open, in my view: some are non-profits, some are not-for-profits, and some are for-profit.
Does this kind of business pique your interest? Here are a few examples, with links to articles that explain more:
- At age 18, Saul Garlick founded an organization now called ThinkImpact that partners college students with communities in developing countries to build local micro-enterprises (New York Times).
- Charles Best founded DonorsChoose.org, a web-based crowdfunding platform that lets teachers raise money for needed class projects (Forbes).
- While an MBA student, Jane Chen and her team started a nonprofit called Embrace to create the Embrace Warmer, a pod-like device that warms low-birth-weight infants even if hospitals lose power (Forbes).
- Who Gives A Crap is a creative and provocative Australian startup that sells toilet paper, donating 50% of its profits to the non-profit WaterAid (we have a neat article about these guys in the special crowdfunding issue of Foundr, which is coming soon).
A new wave of businesses has invigorated the social sector with new life, and if that excites you, then you might have reason enough to consider starting this different kind of business.
If you want to launch your own social enterprise, be creative and think widely. A 2010 study by the Australian Centre for Philanthropy and Nonprofit Studies highlights just how diverse these organizations’ goals and beneficiaries are.
For instance, 4% of Australian social entrepreneurs aim to create opportunities for people to participate in their communities, while 26.4% are driven by a mission to solve social, economic, or environmental problems. The range of goals that fall between those two is impressive.
Then there are differences in who social enterprises are trying to help. The most common beneficiaries of social enterprises are young people, but there’s so much more going on. Here’s a quick graph from the study:
(The percentages add up to more than 100 because many organizations are aiming to benefit people who fit into more than one group. For instance, a nonprofit aiming to help disabled youth and their families would fit into three of the above categories.)
17. You Could Crowdfund
Bootstrapping not going to work for your idea? No problem: another great reason to start a business is that we live in an age of crowdfunding.
Crowdfunding is a relatively recent innovation in how businesses can raise money to get started. It occurs when a large number of people donate to a business project, with each person giving a small amount of money.
It happens on websites like Kickstarter, Indiegogo, and ArtistShare. Business founders create “projects,” which include a webpage explaining the product idea to visitors, who may choose to become “backers” by giving money. Most crowdfunding campaigns give reward to backers, like a copy of the final product once it’s made.
Instead of relying on a few big investors, you can go straight to the market and ask mass numbers of people to breathe life into your idea. Crowdfunding helps businesses hop over that initial financial hurdle.
For many businesses, it works. Here are a couple stats for Kickstarter, the world’s biggest crowdfunding platform:
- More than 74,800 projects have received funding since 2009.
- Over $1.4 billion has been pledged across Kickstarter projects.
Crowdfunding is also a good reason to start a business because you can choose a crowdfunding platform that fits your needs. While all crowdfunding sites share the same core idea, they do differ. I made this chart to compare the world’s top two crowdfunding platforms:
|Launched in 2009.||Launched in 2008.|
|Larger market share.||Smaller market share.|
|Projects must create something that can be shared with others.||Wider range of projects allowed.|
|Fixed funding only.||Choose between fixed funding and flexible funding.|
|Charges a 5% fee if you reach your goal.||Charges a 4% fee if you reach your goal.|
There’s one more big thing that you should keep in mind if crowdfunding interests you: US laws will soon allow sale of stock over the Internet, which could open the door for a new wave of crowdfunded projects.
If crowdfunding is something that you want to do, you should buy Foundr‘s special issue on crowdfunding, which is coming out soon. I’m proud of–and excited by–the issue, and I really think you’ll like the tangible tips and inspirational stories inside.
18. You’ll Experience New Things
Every business owner works through a different set of experiences, and those experiences are often chances that never would’ve manifested had the person been too scared to start their business.
I’ve thrown a lot of data at you, going on about what academics have to say and why other people start businesses. But there’s more than that, because starting a business is personal.
Some will grow big, and some will stay small. Some will become a new career, and some will remain a side gig. Some will push the boundaries of entrepreneurial innovation, and some will quietly do conventional things in ways that make a difference.
To start a business is to enter a maze. You don’t know when or how you’ll get out on the other end, but the quest can be exhilarating. And here are the important bits:
- You will take different turns, retreats, choices—a different path—than anyone else, even if you’re in the same maze.
- That path will cut through a landscape unlike anything you’ve ever seen before. Yeah, challenges happen. But many of these new experiences are awesome opportunities you never would have had otherwise.
Just look at Nathan Chan, the founder and publisher of Foundr Magazine. He started a little web publication that’s grown, giving him the chance to interview big-name people who’ve accomplished a lot—Richard Branson, Arianna Huffington, Dave Goldberg (and the list goes on).
These are experiences that Nathan never would’ve had without launching a business. That’s why you should think about starting a business of your own. You don’t know what opportunities will soar your way.
19. You Can Face the Challenge
I don’t want to make starting a business sound too easy, because it isn’t.
Many entrepreneurs sacrifice a lot of free time and social time in the early days of their startup. But time isn’t the only issue: in a new business, money is tight, work piles up, and plans go wrong.
When reading the Journal of Small Business and Enterprise Development study of established entrepreneurs in New York City, I saw an illuminating quote from one of the business owners interviewed:
“Do your homework! Make sure that you research every aspect of your prospective investment. Also, be ready to put in major effort. You need to make sure you have the will it takes to get the job done correctly and effectively, and if that means working a 12 hour day to get something done, there is no way around it.”
In that study, 43% of entrepreneurs cited long hours as a challenge in starting their business.
Starting a business is hard. That’s why the study asked successful business owners what advice they could offer to people thinking about starting a business. The top three things to do are:
- Fully research the business idea first (21%)
- Have passion or commitment (19%)
- Plan properly (19%)
Advice can help. The challenges of starting a business are not insurmountable, and they can in fact be satisfying to beat.
In the Journal of Business Venturing study, 67% of surveyed entrepreneurs said that they started their business (at least to some extent) because they wanted to be challenged.
Curiously, 37% of new business owners in one survey said they didn’t have any hardship when forming their company. While starting a business isn’t guaranteed to be a huge challenge, it probably will be–and that’s a reason to go for it.
20. You Won’t Know If You Don’t Try
You might think that you’ll never be able to execute your plans. You might think that nobody will ever buy from you. You might think that if you try to start a business, it will shatter into a million pieces, getting you nowhere. But if we don’t at least try to start something, we’ll never know if those fears are real or not.
The only way to know is to do. Aside from that, it’s all just guessing.
Starting a business means plunging into uncertainty. Dozens, perhaps hundreds, of variables decide whether a new venture will fall flat or climb to the top.
You can’t control all of those variables, but if you do your best where you do have control, everything else is more likely to work out. The only way to guarantee failure is to do nothing.
If you have an idea for a business, you should get started. There’s no better day to launch than yesterday.
A paper in the Human Resources Management Journal put it well:
“It is often said that a person cannot win a game that they do not play. In the context of entrepreneurship, this statement suggests that success depends on people’s willingness to become entrepreneurs.”
21. You Can Make Your Own Reasons—and Your Own Decisions
Drawing from surveys, academic research and past Foundr interviews, I’ve assembled a list of reasons why you should start a business. Perhaps you have reasons why you shouldn’t, and that’s fine.
Maybe, as you read this post, you drafted your own list, a little screed offering 21 reasons against starting a business. Maybe not. Either way is fine, because whether or not you start a business is your own decision. You have to weigh the pros and the cons and move from there, all while remembering that you won’t know what will happen if you don’t dive in.
The beauty of entrepreneurship is that it lets you seize on the freedom to make your own decisions and control your own destiny in a way that conventional jobs do not. And in making your own decisions, you can make your own reasons.
What are your reasons for starting a business? Did any of the ideas I listed click with you? Do you have additions of your own? Please let me know in the comments below!