What Motivates Founders To Start A Business?

The 2024 UK Startup Awards provided valuable insights into the motivations behind starting a business, aligning closely with the well-established distinction between “opportunity” entrepreneurship and “necessity” entrepreneurship, as identified by the Global Entrepreneurship Monitor (GEM).

The data reveals that 81% of founders started their businesses to capitalise on a promising business opportunity, reinforcing previous findings that most entrepreneurship is opportunity-driven. This type of entrepreneurship is typically linked to higher growth potential, better access to resources, and more favourable business outcomes compared to necessity-driven ventures. Entrepreneurs in this category often possess the financial stability, networks, and strategic foresight to pursue market gaps and innovative ideas.

However, 13% of start-up founders were driven by necessity, starting their businesses due to a lack of viable employment options. These individuals often engage in entrepreneurship to earn an income during economic downturns, industry disruptions, or personal circumstances that limit traditional employment opportunities. Necessity-driven entrepreneurs may face unique challenges, such as restricted access to funding, limited business support networks, and higher pressure to achieve immediate financial stability.

Additionally, 6% of entrepreneurs cited both opportunity and necessity as their motivation for starting their businesses, indicating a blend of ambition and external pressures in their entrepreneurial journey.