Objectives of a New Business

A common misconception That every start-up has ambition to turn into a large, successful business... 2011 Est 2002

A new business will have a variety of objectives But look at the data 4.5 million registered businesses in the UK 3.3m have no staff Only 6,000 have more than 250 staff Does size matter? A new business will have a variety of objectives Objectives Aims & Part-time businesses Social enterprises Lifestyle businesses Ambitious businesses Source: The Department for Business, Enterprise and Regulatory Reform, Small and Medium-sized Enterprise (SME) Statistics for the UK 2006.

Common objectives of start-ups Financial Capital gains Making a living Personal Proving people wrong Gaining control Building something Social Giving something back

“Lifestyle” businesses Businesses run to provide a satisfactory living Not ambitious – happy to “tick over” Low stress? (possibly) Low finance requirement Lower profits and returns But still have a high “failure” rate

Part-time businesses A great way to learn about running a business Don’t have to give up the “day job” Works well for: Mail order eBay Consultants Other home-based businesses

Social Enterprises Trade in goods or services for a social purpose The Triple Bottom Line: Financial (surplus) Social aims Environmental action Surplus goes towards one or more social aims

Ambitious businesses The traditional business start-up Aims for growth (sales + profits) Takes careful planning, money and energy Bigger risks + bigger returns Easier to raise money Dominates the life of the entrepreneur

Aiming for survival Start-ups with ambitions to become big businesses first have to achieve survival Requires: Enough cash Reaching break-even (i.e. total sales cover total costs)

Some non-financial objectives of an entrepreneur (1) More control over working life – want to choose what kind of work is done Need a more flexible and convenient work schedule, including being able to work from or close to home Feel that skills are being wasted and that potential is not being fulfilled Want to escape an uninteresting job or career A desire to pursue an interest or hobby

Some non-financial objectives of an entrepreneur (2) Fed up with being told what to do – want to be the boss! Want the feeling of personal satisfaction from building a business Want a greater share of the rewards from the effort being put in – compared with simply being paid by an employer Fed up with working in a business hierarchy or bureaucratic organisation (people with entrepreneurial characteristics often feel stifled working and having to co-exist with others!

What it takes to succeed A profitable business idea Customer demand = enough sales Well executed idea Entrepreneurial characteristics Passion & commitment Resilience & energy Risk-taking & initiative Multitasking Hard work & lots of luck

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