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Entrepreneurship

v1.0 Laura Portolese, Jaclyn Krause, and Julie R. Bonner
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1.3 Why Start Your Own Business?

Learning Objectives

  1. Explain why someone would want to start a small business.

  2. Identify the benefits of small business ownership.

Now that we have a good understanding of the types of small business, let’s look at some of the many reasons why someone might choose to start a small business. Some small business owners want work for themselves. Others want to make some extra income while managing family obligations. Still others seek financial independence or creative freedom. Some business owners seek to exploit their knowledge or skills while reaping the rewards for themselves. Finally, some wish to make a significant difference, whether that be through the innovation of new and exciting tools, technologies, or services, or through different ways of providing social services. Whatever the motivation for starting a small business, most individuals share similar desires. Entrepreneur Magazine identified the top 50 reasons why people decide to start their own business. Here are a few:

  1. flexibility – able to work your own hours

  2. calling your own shots, making your own decisions

  3. setting your own deadlines

  4. working on projects you want to work on/selling products you want to sell

  5. pursuing your

  6. watching something you build from scratch become a reality

  7. help people to improve their lives

  8. investing in yourself

Figure 1.7 Some of the Reasons Why People Decide to Start a Small Business

A Venn diagram with five intersecting circles labeled Financial freedom, Be your own box, Share knowledge or skills, Earn extra income, and Creative freedom.

Leveraging: A Ready and Willing Customer Base – Dell Computers

Michael Dell was fascinated with computers at a young age. At 15, he took apart an Apple computer just so he could see how it worked. In college, he began building computers to sell to fellow students at cheaper prices and with better service and support. Dell was convinced that if he could sell computers direct to customers and provide excellent customer support, he would be successful. In 1984, Dell introduced his computers to the masses. Today, Dell is consistently ranked among the top 5 best computer brands.

Other good reasons for starting a business include the tax benefits. Most items required to run your business are , including (but not limited to)...

  1. office, retail, or warehouse space either rented or purchased

  2. equipment involved in the operations of the business or the manufacturing of items sold through the business

  3. automobile expenses

  4. legal, accounting, and other professional service fees

  5. advertising

  6. phone, Internet, and other communications expenses

  7. software and computer equipment

  8. travel and travel related expenses

  9. insurance

  10. gifts

  11. bad debts

There are additional benefits for qualifying minorities who start a business. The Small Business Administration offers training, workshops, individual counseling, and management and technical guidance. Mentor-protégé programs are also available for further support. Additionally, minority-owned businesses are encouraged to compete for government contracting opportunities. For more information, be sure to visit https://www.sba.gov/business-guide/grow-your-business/minority-owned-businesses. Both the federal and state governments offer resources for small businesses owned by women. The Small Business Administration has resources for women seeking to compete in the Federal Contracting Program. There are several private organizations that want to help women and minorities too.

In addition, the U.S. Department of Veterans Affairs offers an entrepreneurial portal that helps connect veterans with small business services available to them for their service. This portal connects veterans with resources specific to the type of business they intend to start, funding sources, and tips for growing a business while finding opportunities. For more information, visit https://www.va.gov/osdbu/entrepreneur/index.asp.

Use Entrepreneurship to Reinvent Yourself

As you watch the video, see if you can identify whether your business interests are different from your background and training. Are you seeking to reinvent yourself? Are you seeking to follow your passion?

Key Takeaways

  1. There are several reasons why people start a business. These include financial freedom, the ability to be your own boss, flexibility, and pursuing one’s passion.

  2. Tax benefits exist for small business owners.

Interactive Activities

  1. Identify at least three things about which you are passionate. List several possible business opportunities for each of these areas.

  2. Choose one business idea that you considered in the previous question, which you think you might be interested in pursuing as a small business. Investigate and identify existing businesses that would compete directly with your new business. Identify three possible ways in which to differentiate your business from the competition.

  3. Identify your personal reasons for starting a business. List the top three reasons.