Written by the Economist Intelligence Unit on behalf of Barclays Wealth, this seventh volume of Barclays Wealth Insights examines the characteristics and motivations of entrepreneurs in a challenging economic environment.
Perseverance becomes an essential quality for entrepreneurs in a challenging environment
Every start-up faces its share of barriers, obstacles and naysayers, but in more challenging economic times, these problems are all the more difficult to overcome. The most traditionally recognised entrepreneurial traits – a willingness to take risks and creativity – can help entrepreneurs to steer round some of these challenges, but a thick streak of tenacity is also required to succeed in the current environment. As a result, survey respondents rate perseverance as the single most important quality required by today’s successful entrepreneurs.
The ability to make money is not the main factor motivating entrepreneurs
In the public imagination, entrepreneurship is often linked with financial success. Our survey suggests, however, that money does not play as important a role in motivation as many would believe, with just under one third of respondents saying that the possibility to make large sums of money is an advantage of being an entrepreneur. While there is no doubt that money is vital for an entrepreneur to achieve his or her vision, our research suggests that it is more an indicator of success rather than the prime motivation.
The conditions for entrepreneurship are improving in some regions…
Respondents cite the Middle East and North Africa as being the region that has seen the biggest improvement in the environment for entrepreneurship over the past decade. Although conditions vary from country to country, it is clear that ongoing economic reform and political support for enterprise is leading to widespread change, fuelling many new opportunities for entrepreneurs both within the region and internationally. Asia-Pacific also performs well on this measure, no doubt reflecting the strong economic development and liberalisation that is taking place in the region’s powerhouses of India and China.
…but in others there are concerns about certain aspects of the business environment
The more mature markets of Western Europe and North America remain highly attractive regions for entrepreneurs, thanks to their strong institutions and availability of capital. There are grumbles among some entrepreneurs, however, that certain aspects of the business environment are becoming more difficult. Almost 40 per cent of respondents from North America and Western Europe say that the regulatory environment has deteriorated in their region over the past decade, while a similar proportion have concerns about the cost of doing business.
The credit crisis has resulted in a less favourable climate for business exits
Conditions for exits have become less favourable in recent months as the impact of the credit crisis has filtered through to the real economy. When looking to exit their business, the most important factors for entrepreneurs in the survey are the value of the business, the point in the business cycle and the level of interest from buyers. In the current climate, all three will have deteriorated for most entrepreneurs, so it is likely that any who were planning a sale will be putting plans on hold. That said, only a minority of entrepreneurs create a business with an exit in mind. For most, the motivation is to build a successful business over the long-term.
