1 in 5 Entrepreneurs Launch Start-Ups With ‘Exit’ As a Main Aim

Business Insights

A new study conducted by a brand-new cloud based application has discovered that 23% of entrepreneurs launch start-ups with ‘exit’ as a main aim. What’s more, the reasons for doing this have been revealed, with the majority (89%) saying it was to make a profit and the remaining 11% admitting they get tired of working in the same sector for too long.

Entrepreneurs aren’t always starting passion businesses with longevity in mind, with more than 1 in 5 admitting that they launch start-ups with eventually selling up as one of their main aims. Furthermore, research has found that of those who have selling up in mind when launching, just over half (52%) regret selling at least one business in the past.

The research was conducted in a bid to further understand the habits of entrepreneurs based in the UK. A total of 989 adults, aged 18 and over, were quizzed as part of the study, with all recipients revealing that they were entrepreneurs who had launched at least one business prior to questioning.

All participants were initially asked, “How many businesses have you launched?” The majority, 62%, revealing they had started ‘1-3’, 23% saying ‘4-6’ and the remaining 15% stating they had launched ‘7+’ businesses.

Wanting to find out more, researchers asked all respondents what the main reasons they started up these businesses were, with ‘it was a passion of mine’ (35%) and ‘I knew it would eventually sell well and had exit in mind’ (23%) coming out top.

Those who stated that they had exit in mind when launching a new businesses were asked why they would start a new company just to eventually sell it, with the main reason emerging as ‘to make money’ (89%) and 9% admitting it was due to them getting tired of working in the same sector for too long.

Participants who had exit in mind when launching a business were asked, “Did you have a way of assessing the value of your business before you went to sell it?” with the majority, 53%, revealing they didn’t. All of these respondents, 100%, wished that they had a precise way of telling them how much their business was worth before they sold up.

Finally, the relevant respondents were asked whether they believed they had sold their business too early, with more than half (52%) revealing that they thought this was the case for at least one of their launches.

Andrew-Paton Smith, creator of www.Jazoodle.com commented on the results of the study:

“Launching a new business is terrifying for first timers, but by the time you’ve done it more than once, it becomes easier. If you have confidence in your idea and you think it will sell for lots of money later on down the line, then there is no issue in launching something just to sell it off. It’s important to ensure you are completely aware of your business’ valuation though and that you aren’t getting ripped off during a sale.”

Jazoodle is a business performance application which launched late last year.

The cloud-based application allows accountants, business owners and advisers to gain insight into their companies’ performance.

The application allows users to modify key financial inputs that result in easy-to-view future financial statements, KPIs and scenarios, helping them to foresee potential issues and opportunities.