Many people dream of opening a business, but only some actually start one. Various contributing factors push a person to start a business.
Internal factors
- Interest and ambition — a strong desire to be independent and reach a dream.
- Skills and experience — expertise that lets a person offer a product or service.
- Desire for higher income — wanting to raise one's standard of living.
External factors
- Market opportunity — unmet customer demand.
- Financial support — capital, loans or grants that are easy to obtain.
- Government support — training programmes, grants and help from agencies such as SME Corp.
- Technological progress — online platforms that let a business start at low cost.
Example
An experienced tailor sees high demand for baju kurung online (market opportunity), obtains a small grant from a government agency (support), and then launches her own clothing brand.
Remember
Contributing factors usually combine. A person may have skills, but without capital or a market opportunity, a business is hard to start.
Push and pull factors
Contributing factors can also be seen as push factors and pull factors. Push factors are conditions that push a person out of their current job, such as losing employment, dissatisfaction with pay, or a lack of promotion opportunities. Pull factors are the positive attractions towards the business world, such as the chance for profit, the desire to be independent, and encouragement from successful entrepreneurs. Many entrepreneurs are actually driven by a combination of both at the same time. For example, someone who is retrenched (a push) may see high demand for a certain service (a pull) and decide to go into business. Understanding this difference helps a would-be entrepreneur recognise their real motivation and ensure the decision rests on solid reasons, not just a temporary reaction.
Understanding these factors helps a would-be entrepreneur assess their readiness and plan the first steps more confidently before investing time and money.