Reasons for starting a business: what you really buy.
Most reasons for starting a business have little to do with a new idea. Hurst and Pugsley surveyed 1,214 people in the act of starting one. Only 40 per cent led with an idea, and only 34 per cent with income. Instead, more than half named flexibility or being their own boss.
The forty industries behind most small businesses.
Hurst and Pugsley published their list in 2011, and it reads like an ordinary high street. Doctors, plumbers, restaurants, insurance agents, beauticians and mechanics fill most of it. In fact, over two thirds of US small businesses sit in about forty narrow industries. However, there is no software on that list and nothing new being invented. So if your plan is not on it either, you are already unusual.
Your honest reasons for starting a business.
The survey design matters, because the researchers caught people mid-start, before any story was sanded down. They screened about thirty-four thousand American adults and asked 1,214 of them why. Two in three said money was not the main reason. That does not mean money was unimportant, only that it was not the point. So ask which of your reasons for starting a business would come out first, honestly rather than impressively.
Why those trades are so crowded.
Those forty industries let one person start on a Tuesday without a laboratory, a patent or an investor. The work can also be arranged around a school run. As a result, they are crowded precisely because you can get in. Nobody competes on novelty there; instead, they compete on being nearby and decent. In short, that is a real business, not a lesser one.
But there is another reading, and it is a good one. Flexibility might simply be the nicest name for the only open door. Both things are probably happening at once, even inside you.
Name your main reasons for starting a business tonight.
Write one sentence answering why you are doing this, as if a researcher asked you tomorrow.
Check whether your plan sits inside one of the listed trades, and note what that means for you.
From the book.
Only 40 per cent gave a new product or a good business idea as their main reason for starting, which means three in five people who were actively starting a business that year had something else at the front of their mind. Some of them will have had an idea and simply not led with it, while most of them, on the evidence that follows in this chapter, did not have one at all.
I Want to Start a Business but I Can't Quit My Job, chapter 4: What you are actually buying
Questions about reasons for starting a business.
What are the most common reasons for starting a business?
In the survey, more than half gave a reason with no money in it at all. These included flexibility, being their own boss and arranging life around something else.
Do most new businesses start with a brand new idea?
No, only 40 per cent of people actively starting one gave a new product or idea as their main reason.
Is wanting flexibility just an excuse for having no idea?
Possibly, since people with no new idea may have nowhere else to go. Both explanations probably operate together, and no survey can separate them.
Read the whole chapter.
This lesson covers one section of chapter 4, “What you are actually buying”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Reasons for starting a business: what you really buy.
- 02 Self employed working hours: the six-hour price.
- 03 Self employed job satisfaction: why it is real.
- 04 Flexible work arrangements: price what you want.
- 05 Lifestyle business: small on purpose, not by accident.
- 06 Quitting job to open a cafe: count before you leap.
- 07 Revenue vs take home pay: the contract I refused.