The motivation for running a business

Self determination, independence and freedom of choice are the motivating factors behind the decision to start up a business according to the latest NatWest Small Business Research Trust Quarterly Survey of Small Business.

When it comes to setting up and running a business, the desire to make the critical business decisions as the boss far outweighs the aspiration to make money by three to one, regardless of the respondent's age. However, the younger the business owner the greater the role financial security and making money has in their motives to set up on their own.

Sole traders it seems are more than twice as likely as the rest to report that their main motivation for starting up their own business was to work on their own and to avoid being told what to do. This is particularly prevalent in service firms who are much more likely than the average to be motivated by their desire to be their own boss.

Small business also appears to be a vocation of choice as only six per cent of respondents indicated that they had no alternative. That said, older respondents may feel that they have fewer options in the labour market, as those over the age of 50 are three times more likely than their counterparts under the age of 50, to cite that they had no choice as their main motivation for going it alone.

Once in business, the main objective for Britain's entrepreneur is to support a certain standard of living (32 per cent). Younger respondents are far more likely than their older counterparts to want to improve their standard of living. Older respondents have the more modest goal of supporting their preferred lifestyle.

Growth

One fifth of respondents state that their main objective is to grow the profits of their business and nearly half admitted that they either had a clear size in mind or would like to grow without defined limits. Younger businesses in particular are much more likely to still have positive growth targets, although often of a more specific nature.

The survey also proved that although growth is high on the agenda of nearly half of the respondents, one fifth were happy to remain at their current size and 15 per cent thought that they would sell on their business shortly.

Innovation

Innovation, often considered essential to the survival of small business, is alive and well with over half of the respondents in the survey having made some significant innovations in the past year. Overall, the introduction of new products and services is the most common innovation, closely followed by changes to the business and production processes. Nearly half of those respondents who have started their own business because they had no alternative, report that they have made no significant innovations.

Other significant innovations specified include new uses of technology, especially ICT (Information and Communications Technology) and increased staff training.

The survey was conducted by the Small Enterprise Research Team, based at the Open University Business School.