HOW TO BECOME A SUCCESSFUL ENTREPRENEUR : A qualitative research about how to start-up a successful business

School of Health, Care and Social Welfare

HOW TO BECOME A SUCCESSFUL

ENTREPRENEUR

A qualitative research about how to start-up a successful business

NERGIZ FATAH

Main Area: Master thesis Level: Advanced

Credits: 15

Programme: Master work life science Course Name: Master thesis in working life science

Supervisor: Mohammadrafi Mahmoodian Examiner: Susanna Toivanen

Seminar date: 2021-03-02 Grade date: 2021-03-9

ABSTRACT

Starting a business requires careful preparation to succeed. The failure of a business is often potentially detrimental to an efficient market economy. An understanding of how to start a business and why some companies succeed is crucial to the stability and health of the economy. The purpose of the study is to examine the entrepreneurs' experiences of how to start their own company and what makes a company successful. The study is based on a qualitative approach with semi-structured interviews as design. Targeted selection was chosen in the study with a total of five respondents participating in the survey in Västerås. Data were analyzed by a manifest content analysis. The results show five important

categories that have a significant effect on how to start a successful business. The categories were "Motivation", "Business idea", "Quality", "Knowledge" and "Business plan". According to entrepreneurs' experience, these five categories play a significant role in succeeding and overcoming challenges that may arise along the way. The conclusions are to facilitate the process of how to start your own business, it is important to consider the five categories to succeed and increase the chance of success.

Keyword: Business plan, Business idea, Entrepreneurship, Failed company, Knowledge, Quality, Motivation, Successful business, Startups,

CONTENTS

1

INTRODUCTION ... 1

Aim & Research Question ... 2

2

BACKGROUND ... 3

Business Climate ... 3

Entrepreneurship ... 4

Business plan ... 5

2.3.1

Summary ... 5

2.3.2 Business idea ... 5

2.3.3 Marketing Plan ... 5

2.3.4 Organization ... 6

2.3.5 Profitability & Financing ... 6

2.3.6 Risk Analysis ... 6

CHALLENGES ... 6

3

PREVIOUS STUDIES ... 8

Definitions ... 10

3.1.1

Quality ... 10

3.1.2

Motivation ... 10

3.1.3

Knowledge ... 10

3.1.4

Business plan ... 11

3.1.5

Business idea ... 11

4

THEORETICAL PERSPECTIVE ...12

Entrepreneurial success components theory ... 12

Emotional intelligence theory ... 12

Purpose over profit- Golden circle ... 13

5

PROBLEM FORMULATION ...15

6

METHOD ...16

Choice of method ... 16

Selection ... 16

Analyses ... 18

Quality Criteria ... 20

Ethical considerations ... 20

7

RESULTS ...22

Motivation & Goals ... 22

7.1.2 Motivation ... 22

Business idea & Quality ... 24

7.2.1

Business Idea ... 24

7.2.2 Quality ... 25

Knowledge & Planning ... 26

7.3.1 Knowledge ... 26

7.3.2 Business Plan ... 27

8

DISCUSSION ...28

Result discussion ... 28

8.1.1

Motivation ... 28

8.1.2

Business idea ... 29

8.1.3

Quality ... 29

8.1.4

Knowledge ... 30

8.1.5

Business Plan ... 31

Method discussion ... 32

8.1.1 Qualitative method... 32

8.1.2 Selection discussion ... 32

8.1.3 Discussion of data collection ... 33

8.1.4 Analysis discussion ... 33

8.1.5 Discussion of quality criteria ... 34

8.1.6 Ethics discussion ... 35

9

CONCLUSIONS ...36

Suggestions for further Research ... 36

REFERENCE LIST ...37

APPENDIX A: INTERVIEW GUIDE

APPENDIX B: MISSIVE LETTER

1

INTRODUCTION

How can you go about starting your own business? What do you need to develop an idea for a business idea? For a new company or project to succeed and be successful, much depends on the implementation of an idea. A lot of preliminary work is needed to propel a new company, such as a strong idea, a financial plan that supports implementation and a vision of how to form. It can also be valuable to find out if there are any specific rules to adhere to succeed and drive a company forward.

The purpose of this study is to investigate entrepreneurs' experiences on how to start one’s own business and what makes a company successful. This study will be useful and valuable for all beginners who want to know how to start their own business and become their own successful manager in work life but even for the research community as it investigates. The reason why the researcher has chosen and written about this topic is because many people have a great interest in opening their own businesses and realizing their dreams, but there is a lack of knowledge and information that is needed before getting started. If you have an idea, but lack of experience and knowledge in business, it can be difficult to know how to begin and where to turn to implement your plans and get the support you need. A structured business plan may be needed and facilitate the road to be able to defend against any obstacles and most problems that may arise along the way.

There are many questions that can occur before starting your own business and therefore it is a great advantage and start to prepare and get useful information from entrepreneurs who are experienced and successful with their company. This can increase the chance and succeed as a business owner. There is research that shows that people who have acquired information and knowledge before starting a business have a greater chance of succeeding as an

entrepreneur. The author is therefore interested in writing about this topic and seeking information through trustworthy sources and databases to answer the research question and purpose. The study will include basic knowledge about how you as a beginner should go about starting your own as well as learning what makes a company successful. This study will be inspiring for anyone who wants to become successful entrepreneurs in future.

Aim & Research Question

The purpose of the study is to investigate entrepreneurs’ experiences on how to start-up your own business and what makes a business/company successful. The research question is entrepreneurs’ experiences on how to start up a company and what makes a company successful?

2

BACKGROUND

One of the most common dreams among young people is how to start and run their own business. The reason why this drives thousands of people to start-up their own business is because people want to become their own boss, enjoy the full rewards of their hard working, or build something meaningful. Harris (2018) writes that the reason why most company fail vary, but a lot depends on poor estimation of what is involved in starting a business, such as poor planning and a poor understanding of what customers really want and need.

The number of companies is increasing in Sweden, in 2013 the figure was measured at about 1 million. This growth of self-employed people is an important driving force in our economy. At the same time, the number of corporate bankruptcies increased in 2013 compared with the previous year (Ekonomifakta, 2014). Registering a new business is easy. But it is not as easy to get an idea in advance of what extensive work is required to start your own business from scratch. Tillväxtverket (2010) claims that it is more common among foreign-born people to run their own company than it is for Swedish-born people. Foreign-born people tend to have smaller companies and the start-up phase is largely financed by family and friends

(Företagarna, 2010). Despite this, there is very low entrepreneurial activity in Sweden today in comparison with the other Nordic countries (Företagarna, 2010).

Many previous studies have examined the importance of experience in starting a business. Experience shows that it has a significant impact on entrepreneurship, and it can be the key to a successful business (Atherton, 2007). A company that also has an experienced team can improve the chances of success of a new company. Most of the companies that were created had some prior business experience. Studies show that an inexperienced team can still be successful, but the chances of a strong success are enhanced by the advice of others. Sources of experience according to studies can be business angels, non-executive directors, and mentors. These people do not need to be from the same market or industry to give good suggestions on company structure and marketing (Salamzadeh & Kesim, 2017).

Mengel & Wouters (2015) who conducted a study on the use of financial planning and control systems in small and young start-ups and the effect of this on the company's success. Based on survey data, the researchers found that educational background was a precursor to being able to use planning and control systems and little support from work experience. The results of the researchers' research showed that financial planning and control activities have a function that benefits both small and large start-ups and that financial planning and control in newly started companies facilitates uncertainty and limited resources. Factors such as the presence of venture capitalists, the CEO's experience, strategy increase the likelihood of an early adoption of financial planning and control systems in start-ups (Mengel & Wouters (2015).

This subject is important for working life science because good knowledge of leadership and organizations is a key factor in all future careers in management and organization nationally and internationally. Good knowledge in this area provides good skills to work in a variety of businesses and industries and the opportunity to develop their current work.

Business Climate

Until the middle of the 19th century, the only way to create companies and do business was solely as a supervisor or as part of a partnership. The holders were preferably responsible for the company regardless of dealers only or as part of a partnership. If the company became insolvent, the holder got the debtor's prison and their family to the workhouse. Over time, the nature of the company changed from small to cottage industries and family businesses to

concept of limited companies in the UK was formed in 1855. The new concept was innovative, elegant, and simple that proved successful (Harris, 2018).

There are both small and large companies with a certain amount of resources that it

coordinates. Resources differ depending on what kind of company you start. Resources may include, for example, labor, capital, technology, and information. The purpose of the

coordination may, for example, be to develop, produce and sell goods or services. According to Hendratmi, Ryandono & Sukmaningrum (2019) newly started companies have less than 20 employees and earn less than USD 100,000 per year.

Before starting a business, it is important to know what the individual wants to achieve personally. Does the individual want to open it up to provide a better income level until retirement? Common examples of these companies may be small consultants, or service providers such as web designers, management consultants, photographers, technical consultants and so on. These companies can provide comfortable income to the owner and good job satisfaction as well as flexibility, but they do not tend to build equity. Or does the person want to stratify? a company and then sell it when the person retires or wants to hand over to their children? These companies may include stores, specialized manufacturers or service companies and specialty suppliers or distributors. These companies are usually larger than lifestyle companies and they tend to have equity that can be sold or traded. People who want to start and run a business quickly for five years and then sell it for a significant return can be found in the new technology, media, biomedical and other high growth areas of the economy. But these companies require markets that are high in growth for room to grow and large capital investments are needed to make them work (Harris, 2018).

There are different types of company form, so it may be important to have knowledge of the different types of company to choose the right type of company before you start. (Hannah & Kasuya, 2016) Some of the most common types of business that are relevant when starting a business in Sweden are:

- Private business (Enskildnäringsverksamhet), means that the company is started by a normal person and the company and the owner are regarded as one and the same person. This means that the owner is responsible for the company's debts (Hannah & Kasuya, 2016).

- Joint-stock Company (Aktiebolag)is owned by one or more persons but to start a joint stock company a capital of at least SEK 25,000 is required. The owner has no personal responsibility but risks only invested capital. There may be situations where the owner becomes personally liable for payment, for example for unpaid taxes and fees (Harris, 2018).

- Trading Company (Handelsbolag)is run by at least two people who want to start a company together. No invested capital is a requirement, but both partners are personally and jointly and severally liable for the company's debts (Harris, 2018). - Economic association (Enekonomiskförening) is formed by at least three

people and the association shall promote the financial interests of its members. It is a requirement that members participate in the business. Financialresponsibility is limited to memberefforts (Harris, 2018).

- Non-profit association (Ideellförening)conducts business but the nonprofit association must not be run to promote the financial interest of its members, but only for a non-profit purpose (Harris, 2018).

Entrepreneurship

An entrepreneur is an enterprising person who creates new user value, in the business world, entrepreneurs can create new goods or services such as a new organization / company of the business operations. Another definition of the concept of entrepreneurship is creating one's

own company to create a job that suits one's self and fulfill the dream. Entrepreneurs deal with problems and find solutions, they go from thought to action, realizing ideas. Some entrepreneurs start their own businesses while others use their entrepreneurial development (Ahmed & Mcquaid, 2005).

The European Commission's Green Paper on entrepreneurship describes how important entrepreneurship is for starting one's own business. The European Commission's Green Paper notes that Europe needs more new businesses so it is important to encourage

individuals to start businesses and link this to a broader development of encouragement for a corporate culture and entrepreneurship (Atherton, 2007).

Business plan

According to Kalrsson& Honig (2009), the business plan is today the key to successful preparation, regardless of the type of company to run. Most new companies have failed because of a lack of an effective business plan, this shows the importance of how important a business plan is for new businesses that are started (Kalrsson & Honig, 2009).

A business plan is as a tool to facilitate and develop the idea and own work as a support for communicating with other stakeholders as well. A business plan is thus a written document describing the company's status and possible future, it is a maturation process that facilitates progress from idea to a final project. Business schools teach business plans because it has proven to help current and future entrepreneurs manage activities that involve a high degree of complexity and uncertainty (Garcia, Lara & Lopez, 2019). A business plan usually contains various parts, such as:

2.3.1

Summary

The summary is one of the most important parts of a business plan because in a small space, the person must summarize and sell the project / idea to capture the readers' interest, because there is a risk that the readers will lose interest. This summary should be a script for the person who wants to start a business and attract people when he or she is to present the company project orally. This part is last written when the person is ready with the business plan travel, budgets, and calculations (Ryan, 2014).

2.3.2 Business idea

A business idea is the basis for a company with a vision of a service or product that others should benefit from and how the company should make money. A business concept

highlights customer benefit, that is, what customers need or need, and how they should be satisfied or solved with your business idea. It is an advantage and write how much the customer will save or profit from using your product / service. It is also significant that there is a description of the market, ie where the customers are in need. Which customers benefit most from the products manufactured? Describe what is unique or innovative about the business concept, is it the product that is special or the way it is provided. Can a business model be used to more easily know how the company is designed and functioning? (Ryan, 2014).

2.3.3 Marketing Plan

This section of business plan? should include a description of:

- Market and competition analysis, to write a good marketing plan is it important to gather information about which competitors are there? What is the difference between your products and those already on the market? What needs do customers

information is it significant and think about whether you should compete in price, or do you think your product is better that you can sell for a slightly higher price? (Gibb& Ritchie, 1982)

- The market / customer segment consists of, for example, looking at the market's easiest parts to process, which customers will benefit most from your product or service? It is an advantage if you investigate whether certain customer groups may be more likely to buy your products than others (Gibb & Ritchie, 1982)

- Pricing strategy can be done by two basic principles. The cost of the product to manufacture and how much you have to add to make a profit? What is the highest price you can handle for customers to accept the price and want to buy your product? Your business idea can only be implemented if you count on both ways. Set a price in the beginning that you assume the market can accept and then you can assess

whether you can produce your product or service at that price (Gibb & Ritchie, 1982). - Distribution and sales channels, at this stage is it significant to think about how your

products are distributed from manufacturing to consumer? Do sales happen directly from factory to consumer? Or should you use a wholesaler / retailer, or will your salespeople bring the products when they visit the customers? (Ryan, 2014).

2.3.4 Organization

Once you have explained your business concept and marketing plan, it's time to make a description of your business. This section consists of a description of the division of labor, both internally but also that which must be purchased externally. A description of the division of responsibilities, management and personnel is described in this section (Ryan, 2014).

2.3.5 Profitability & Financing

To be able to borrow money, invest or take a job, it is important that you prove in the

business plan that the company can be profitable. A performance budget can be made here to describe when the company starts to become profitable but also how big the future

profitability may be (Gibb & Ritchie, 1982)

2.3.6 Risk Analysis

What are the risks at the start of the business for you and others and what risks are you willing to take? It is an advantage if there is an explanation of questions such as "What happens?". it is also an advantage if you write in your budget about a variant that shows what can happen if the production cost of products increases by, for example, two percent

everything else unchanged. Can you cope with these difficulties? (Ryan, 2014).

CHALLENGES

To start a successful business, it is important to find out what challenges can be found to avoid problems and be prepared for any risks. One of these challenges can be financial challenges because it is an integral part of the start-up process. It is obvious that every company will someday face financial problems due to different reasons and at different stages. The owner will try to convince family members and friends to invest in his / her idea. The owner invests in the company because the idea is in the early stages, the owner needs more money to expand it. It is important that the owner prepares a plan with support documents to benefit from venture capital (Colombo & Piva, 2008).

Another challenge is human resources because when the individual starts a business, he/she needs help to improve the prototype and basically the whole company. When starting up a company, it is important to negotiate with people, create teams and finally hire employees. This process is considered critical to succeed because if the owner lacks knowledge in the

field, it can adversely affect the start-up of the company due to personnel management problems (Salamzadeh & Kesim, 2015).

There is always a risk and uncertainty when starting a new company and this is a reason for the low success of many newly started companies is that there is a lack of structured

management system such as financial planning and control. Another reason is that new start-ups must adapt to the environment but also change their entrepreneurial strategy in order to remain competitive (Mengel & Wouters, 2015).

3

PREVIOUS STUDIES

In his study, Olugbola (2017) finds out that knowledge and information about

entrepreneurship is significant and has a major impact on being successful in starting a business. Previous studies have also shown that the need for performance increases a

person's motivation who wants to start their own business, which is also considered a way to succeed with the new company. One thing that all previous studies mention and come to similar conclusions is the process of creating a business plan to succeed and become a successful entrepreneur. The business plan is considered to be a decisive factor for the success of a project, and it increases the chances of starting one's own business and helps to manage risk taking and facilitates the execution of certain activities during the initial start-up phase (Brinckmann, Grichnik & Kapsa, 2010).

The conclusion of Olugbala’s (2017) study says that knowledge is important that young student should have for the growth of the economy so that it will lead to the success side of the coin. It also states that young people who are currently employed need to be trained and retrained for the future of creating successful companies, which also means high job security. One of the main motives that have been discovered in the result of Olugbola’s (2017) study is that the desire for independence is the main reason for starting a business. The request for independence refers to the use of personal judgment of the entrepreneur's behavior rather than being moved to act through external factors. The reason that independence is a main motive is because it happens to individuals who want to be their own boss (Olugbola, 2017). It is also mentioned in the conclusion that uneducated students should be educated on how to become self-based on their capacity and that management should conduct a seminar for future education on how companies can be set up by inviting successful entrepreneurs to share their entrepreneurial knowledge. Olugbola (2017) has concluded in its study that the best way to success is to have meetings with successful entrepreneurs, especially students, because with their knowledge sharing will give many ideas about when, what, and how to overcome challenges.

Another previous study written by De Silva (2010) examined the start-up and growth motives of entrepreneurs who owned small and medium-sized businesses in Bradford. A sample of 30 companies were selected in Bradford using a qualitative research method. In-depth

interviews were conducted using the "storytelling" method and narrative analysis had been used for data analysis. The study describes that push motives are the necessary elements that entrepreneurs are driven or forced to start new companies to overcome negative forces, and pull motives are, on the other hand, attractive reasons why entrepreneurs decide to start companies. The study wants to investigate whether pull entrepreneurs and push

entrepreneurs are only motivated by one type or if these two are combined. Part of the results in this study showed that 83.3 percent of those who started their own business had previously worked as a full-time employee and of these entrepreneurs who worked full time, 92 percent had at least one job-related push motive. But the entrepreneurs who did not work full time before starting their own company, 16.7 percent were motivated by the need to earn a

reasonable living and not have a proper educational background. In the sample, 96.7 percent showed that entrepreneurs were motivated by both push and pull motives when they decided to start their own business. The result turned out to be a combination of both motives and explains that entrepreneurs can have more motives rather than single overall motives. De Silva (2010) writes that a few literatures have written about growth motives and claimed that entrepreneurs who have started their own business with necessity / push motives have later been motivated by pull motives with the company's growth. The study claims that pull motives drive the company's growth. De Silva (2010) writes in his study that the majority of previous research has found that entrepreneurs' intentions and wishes would determine the entrepreneur's results. In the study, De Silva (2010) invented three main growth motives and business growth: these motives were a) similarity in the type of work they perform, b)

satisfy personal / family goals. The results showed that entrepreneurs who were motivated to grow the company were due to the similarity to the type of work they performed were (37 percent) and (30 percent) used the company to meet personal / family goals showed a lower growth as opposed to from the entrepreneurs who started the company due to similarity in doing business and achieving business success (33.33 percent). The study showed that entrepreneurs who were motivated to achieve growth because of their similarity in doing business and achieving business success achieved the highest growth and wanted to stay in the industry.

Clercq & Arenius' (2006) study was about finding out if knowledge and self-efficacy have any impact on the individual to start a successful business. The authors chose to investigate new entrepreneurs from two different countries (Belgium and Finland) based on the Global Entrepreneurship Monitor. The selected group was between 18 and 64 years of age.

The results of the study show that knowledge-based factors really have a strong influence on the decision to start a company and succeed with it. The probability of running a successful start-up company has been shown to be positively related to one's current knowledge base, ie (an individual's perceived level of specific skills) and an exposure to external knowledge, ie (personally know an entrepreneur and have experience as an informal investor).

According to Clercq & Arenius (2006), the individual needs to have self-sufficiency, that is, to believe in himself and to be motivated to start a business. Clercq & Arenius (2006) believe that the current knowledge base and exposure to external knowledge increases

self-confidence to successfully start a company yourself. A crucial factor that increases the

probability of starting a business according to Clercq & Arenius (2006) is the necessary skills of an individual. The results thus show that individuals who are self-sufficient are more likely to engage in entrepreneurial activities if they believe they have the skills required to

successfully carry out these activities. Why self-efficacy is important according to Clercq & Arenius (2006) is because it has a great impact on a person's motivation and ability to perform business start-up activities.

Another previous study written by Forker, Vickery & Droge (1996) examined whether and how quality affects a company's results and its significance within a company. To find out, the study examined empirical evidence from the furniture industry. The study has chosen to focus on strategic business units and individual companies (including parent companies) in the furniture industry. The participants in this study were chief executive officers (CEOs) and directors of firms. The study made a sample of 65 companies where personal interviews were conducted for each of these companies.

The results of a survey that had been sent to the furniture industry show that quality

dimensions such as design quality and product improvement are strongly related to business results. Why some companies invest in product quality is to increase market share, lower production costs and improve productivity and ultimately increase profits. The results show that quality is considered one of manufacturing's top competitive priorities and a

precondition for success in the global market.

According to Forker, Vickery & Droge (1996) quality helps to satisfy the customer's wishes and needs by creating and refining high quality products. What counts as high-quality products according to Forker, Vickery & Droge (1996) are those that require good design, thorough testing, and accuracy from engineered prototypes of engineers to design the

product. A deep and detailed customer analysis, motivated product positioning and carefully considered product plans from marketing staff and process capacity as well as accurate cost calculations. If all these functions are present, the product is considered high quality. Forker, Vickery & Droge (1996) believe that high quality improves business performance and a renewed organization that is proud of the products they create.

Summary

Studies mentioned above can be related to each other to a certain extent such as Olugbola (2017) and Clercq & Arenius (2006) where both studies mention that knowledge-based factors and information have a strong influence on the decision to start a successful company. According to these two studies, knowledge and information facilitate the implementation of certain activities during most phases of starting a business and the creation of a good business plan can help to manage risks that may arise.

De Silva (2010) mentions that there are two different motives that are necessary for the success of their company and these are the push and pull motives. The study claims that it is primarily the pull motives that drive the company's growth and showed that entrepreneurs who were motivated to achieve growth due to their similarity in doing business and achieving business success achieved the highest growth and wanted to stay in the industry. This can also be related to the Clercq & Arenius (2006) study which claims that self-efficacy is important and has a great impact on a person's motivation and ability to execute business start and succeed.

In conclusion, Forker, Vickery & Droge (1996) write that product quality is important for the success of their company because product quality increases market share, lowers production costs and improves productivity and ultimately increases profits. The results show that quality is considered one of the highest competitive priorities in manufacturing and a prerequisite for success in the global market.

Definitions

3.2.1

Quality

According to Golder & Moorman (2012), quality is the most important and most complex component of the business strategy, because companies compete for quality, customers secure for quality and markets are transformed into quality. Quality is a key force that leads to happy customers, solid profitability, and the nations' economic growth. Golder &

Moorman (2012) believe that quality has its roots in business practice and in many

disciplines including marketing, management, finance, technology, operations, strategy, and consumer research.

3.2.2

Motivation

Tohidi & Jabbari (2012) believe that motivation is something that drives people to achieve high levels of performance and overcome obstacles to change. There are different definitions depending on the attitude to the motivational phenomenon. The word motivation has been inspired by the Latin term "move" and means movement. According to Tohidi & Jabbari (2012) motivation is like a force and causes people to behave especially that causes

movement in humans. Motivation is the force that causes movement in humans. Tohidi & Jabbari (2012) write “that all agents that cause (internal or external) activity in living beings are considered a kind of motivation.

3.2.3

Knowledge

Knowledge is something that is based on what we believe or hold to be true. But for faith to become knowledge, we must have good reasons, arguments, for what we believe in and that we must justify, ie show or prove that what we believe is true. Knowledge is a kind of basic knowledge, facts, along with understanding. Knowledge can be divided into four different categories, knowledge, cognitive skills, practical skills, and a category that contains attitudes, feelings, values, ethics and motivation. Knowledge is to a large extent not exchangeable, but renewable (Paschek, Ivascua & Draghicia, 2018).

3.2.4

Business plan

A business plan is a comprehensive document that describes the new company and how you will realize your business idea. A good business plan aims to give you, banks and partners an overall explanation of your new company, your offer, and the market you are entering. A business plan must describe business goals and how the business idea is to be implemented. Broadly speaking, a business plan contains a description of the business idea, what the market looks like, as well as budget and calculations. Making a business plan is an opportunity to really think through the business idea to see what can be improved (Guta, 2014).

3.2.5

Business idea

A business idea is the central thoughts, ideas and visions on the basis of which a company operates. A key requirement of the business idea is that if it is followed well, it leads to the company generating profit. The business idea does not necessarily have to be exclusive to the company. It is possible, for example, to rent an already completed business idea and establish it in an area other than where it is already being applied. A business idea is the basis of a company and it describes the purpose of the business and how the company should make money. A business idea is very long-term and should never really change. A business concept describes how the company should achieve high profitability with the help of available and future resources (Hougaard, 2005).

4

THEORETICAL PERSPECTIVE

The theoretical perspective in this study is based on Entrepreneurial success components theory to create an understanding of the creation of successful companies.8

Entrepreneurial success components theory

In 1982, Gibb and Ritchie developed a theory that sees entrepreneurship as a social process. Gibb and Ritchie believe that idea in general and ambition arise in a social situation. The theory also states that even if one cannot conclude that entrepreneurs can develop in their entirety, it is still possible to help with the creation of successful and sustainable companies. This theory explains that no matter how important an individual personality is, the

individual's career can be affected by society's class structure. Family influence is another factor that is about environment, relatives, parents, or friends, which means that they have a great impact on the individual's career. Education, experience, and career choice also have a great impact on the individual's career according to the theory "Entrepreneurial success components theory" as well as current lifestyle and social issues such as participation and accessibility. This means that these factors can influence an individual's life towards creating a successful business without having the genetic factors to start a new business.

According to entrepreneurial success components theory a successful business starts with the first step which is discovering motives or commitments about why a business should be started. Once the person has cleared the motive, the next step is to find a significant or viable idea. According to the theory, it is important that the idea is attractive and has a great

significance to the customer's needs and interests. It is important that the person discovers such an idea that attracts customers' interest. The next step is to find the necessary resources that the company requires, it can be, for example, materials, funding source and quality suppliers. The last step according to this theory to create a successful company is about applying the plan by going into full operation and then building a professional network to maintain the company. The theory consists of four basic success components. These components are idea and market, motivation and determination, resources, and ability. Gibb and Ritchies theory (entrepreneurial success components) because it describes about important factors that can be useful to know when starting a successful business. Such as when an idea and ambition arise with the help of the social environment. The social environment plays a significant role in starting a business. Because a person who wants to become an entrepreneur is influenced by the people who are close to him / her (such as friends and family). Or other factors such as education, knowledge, and experience. These factors are usually one of the reasons when an entrepreneur gets inspired or discovers a significant idea which in turn can become a successful business. Gibb and Ritchie (1982) state that having a good knowledge and experience is another main reason to succeed in your business but also environmental factors that have a great impact on an individual's life towards creating a successful business. Although the individual's personality is important for success, it is not enough because the individual's career is affected by class structure, family influence, education, career choice, experience, current lifestyle, and social issues.

Emotional intelligence theory

Daniel Goleman is known for making the concept of emotional intelligence popular with his best-selling book "Emotional Intelligence: Why it can matter more than IQ?". According to Goleman (1995), emotional intelligence is more important for success in life than cognitive intelligence (IQ) or technical ability in driving performance. Goleman (1995) believes that

humans have "two brains" one working with the rational and the other working with the emotional (your IQ and EQ). Both the rational and the emotional play an important role in the success of life and work. According to Goleman (1995), it is important to have high emotional intelligences because he describes it as a collection of qualities, use and handling of emotions in an intelligent way. Emotional intelligence means the ability to recognize our own and others' feelings as well as emotional information that is about guiding and managing our thinking and behavior or also to achieve our goals.

Emotional Intelligence consists of five components that Goleman (1995) describes, and these are:

- Self awarness- is about the inner state, being emotionally aware. It thus means acknowledging their feelings for themselves but also what they mean. It is important to have correct self-assessment. Self-awareness is about knowing your strengths and limitations as well as self-confidence. It's about strong self-esteem and capacity. - Self-regulation- is about self-control and it means distancing oneself from

disturbing emotions and impulses. On the other hand, having a clear conscience is about responsibility for personal performance. According to Goleman (1995), adaptability means having flexibility in managing change and achieving innovation which means convenience with new ideas, methods, and new information.

- Motivation- on the other hand, is about having a driving force where one strives to improve or achieve the highest possible standard. Achieving commitment is about being able to adapt the goals in a group or organization. Taking initiative means being prepared to act on opportunities but also increase your optimism, which means perseverance to be able to pursue goals despite obstacles and setbacks.

- Empathy – is about awareness of others' feelings, needs and problems.

- Social skill- is about having the skills to be able to handle relationships, develop networks and find common ground.

Purpose over profit- Golden circle

Sinek (2009) who made the model "the golden circle" is about how entrepreneurs can inspire collaboration, trust and change in a company based on his research on how the most

successful organizations think, act and communicate if they only start with the concept "Why”. When people start their own business, they first think of profit, which is

inappropriate (Sinek, 2009). According to Sinek (2009), "purpose" is the key to today's complex, volatile, ambiguous business world, where the strategy is constantly changing. The purpose according to Sinek (2009) is who you are and what makes you distinct. Sinek (2009) believes that the purpose is your brand, what the person is trying to achieve. "At the

organizational level, communicating your 'Why' is the basis for a strong value proposition that will understand your brand from others" (Sinek, 2009).

Golden circle model:

What- involves formulating what the company or entrepreneur does. It can be what the company offers, what product to sell or service they offer. According to Sinek (2009), successful companies and people focus on why they do something rather than focusing on what they do.

How- is about factors that include the company's strengths or values that they feel are different from the competition. Sinek (2009) believes that "How" is a way of communicating with the limbic brain, the important part that controls behavior and emotions. But this would be further improved if organizations formulated their "why" in addition to "how".

Why- according to Sinek (2009), "Why" is the most important message that an organization or entrepreneur can communicate because it is the concept of "why" that inspires others to action. The term "why" is about the purpose and why you make a product or service. The

explanation for "Why" is the most decisive reason why a company succeeds, says Sinek (2009). According to Sinek's (2009) theory, "why" is an effective way to succeed as an entrepreneur and communicate with people by defining your specific value proposition and inspiring them to act.

Summary

The reason that Gibb and Ritchie's (1982) theory have been chosen is because it describes

important factors that can be useful to know when starting a successful business. The author

chose this theory because it describes four basic components of success and these are idea,

market, motivation, determination, resources, and ability. All three theories that have been

chosen and can have something in common, such as Daniel Goleman's (1995) theory of

emotional intelligence where he describes that motivation is important because it is about

having a driving force where you strive to improve or achieve the highest possible standard.

Sinek's (2009) theory, on the other hand, is about the purpose and concept of "why". The

reason that Sinek's (2009) theory has been chosen is because it is about how entrepreneurs can

inspire collaboration, trust, and change in a company. These theories have been chosen and

are considered relevant to the purpose of the study and will be discussed in the discussion

section in more depth.

5

PROBLEM FORMULATION

Starting your own business can be a challenge to know where to start and what it takes to succeed. According to research today there are many people that are interested in starting their own business, but they do not know where to start and what to think about to succeed and become successful entrepreneurs. My observation of Sweden for example can be one of the difficult countries to learn how to open your own business and what to think about. Because Sweden is a country with many rules, and it takes a lot of work to learn what is required of a person who wants to become self-employed. Starting a business is hard work, requires a lot of determination and learning. According to some researchers there is many businesses that fail. Starting your own business can be difficult and risky. Because this can result in many companies failing and would give a negative image and prevent more people from wanting to start their own. But why do they fail? Why does some startups succeed? What is the key to a successful business? The reasons run deep, to be able to answer these questions the author has chosen to go deeper in this matter.

The survey about entrepreneurs' experiences on how to start-up your own business and what makes a business successful can therefore contribute to new knowledge and guide people who want to start their own business and succeed. This study will hopefully inspire people to become successful entrepreneurs.

6

METHOD

Choice of method

This study has chosen a qualitative research method, which means that the study consists of interviews and interpretive analyzes from collected data. This type of research method is used to get an idea of a topic from the respondents' point of view. This is done with the help of selected questions that are based on the study's purpose and question (Kvale & Brinkman, 2009). This research method has been chosen and is considered appropriate because the purpose of the study is to examine the entrepreneur's experiences of how to start their own company and what makes a company successful. According to Holloway & Wheeler (2010), the basis of a qualitative research method is to gain a better understanding, descriptions and experiences through social phenomena perceived by the study participants. This means that qualitative research methods focus on individuals' feelings, behavior, and experiences.

The author has chosen semi-structured interview questions and realized that it is appropriate because the order can be changed according to the respondents' needs. The reason why semi-structured interviews were chosen was because they could be repeated or answered in

another question as well (Bryman, 2011).

Selection

Respondents who participated in this survey were entrepreneurs who were self-employed. With the help of a snowball selection, the author obtained responses that were considered relevant to the survey, which in this context were entrepreneurs who had started their own company. Then the authors got hold of additional respondents to interview. Snowball selection means that the researcher creates contact with respondents that are relevant to the survey and then uses these to get in touch with additional respondents (Bryman, 2011). One of the entrepreneurs were found and selected online on a website after a careful search in the city of Västerås in Sweden. Unfortunately, I as the author could not visit these

companies physically due to the Corona virus situation. However, these entrepreneurs were contacted digitally with the help of a call via mobile phone. The number was obtained by the author through his website which they share with costumers. With the help of the interview, the author was able to ask for permission to conduct interviews for a D-thesis and if the entrepreneurs wanted to participate in the survey. After approval, the entrepreneurs were asked if they wanted the interviews to take place digitally due to the Corona virus or through a physical meeting if so desired. The author then compiled a missive letter (Appendix A) and distributed it to the respondents via an email address. Each of these respondents was

interviewed digitally via an application called Skype. Two respondents were interviewed per day, the reason for this was for the author to be able to be focused and be able to ask

questions in a calm and correct way. Two days after the first interviews, three more respondents were interviewed.

It was a targeted selection that was made for this survey. A targeted selection of a qualitative research means that the researcher chooses correspondents that are relevant for the

formulation of the problem (Bryman, 2011). Therefore, this study has been based on a targeted selection and selected entrepreneurs who run their own businesses, which in this case is relevant for the study purpose. In total, there were five respondents, two women and three men between 22–30 who were approached by the author and who were willing to participate in the study. The reason that only five interviewees were chosen was due to the COVID-19 pandemic which made it difficult to get hold of different companies because most declined the survey to protect themselves from the spread of COVID-19 and only five

interviewees chose to participate in the survey. These respondents had different lengths of experience in business, between 2-5 years.

Data Collection

Before the interviews were conducted, the author began to compile a so-called interview guide based on the purpose of the study to later be able to answer the research question. As previously mentioned, a semi-structured interview guide has been created to make it easier for both the author and the respondents to follow a common thread while the conversation feels relaxed so that the interviewer can have the opportunity to ask questions if they appear even if they are not in the interview guide. What is meant by a semi-structured interview is that the conversations are conducted naturally as a normal conversation. But the way the questions have been shaped in the interview guide is not a requirement and it is up to the author how they should be shaped and when it is necessary to jump between these if necessary (Bryman, 2011).

For the author to conduct the interviews in the best possible way, a pilot interview with an outsider was tested to check that the interview met the time frame and to see if the author can find any errors in the interview guide to correct them. The person who was pilot

interviewed was relevant to the interview questions and the pilot interview was done exactly the day before the real interviews were to be conducted. After the pilot interview, there were no adjustments because the author realized that the interview was relevant to this study. The real interviews were conducted according to the predetermined design, which felt relaxed and safe when the conversations took place. What happened during the conversations was that sometimes certain questions were answered in another question, which means that the author moved the answer directly to the relevant question.

The study interview guide consisted of two themes with five to sixteen questions under each theme (Appendix B). The first five questions on the first themes were about the respondent in general to get an idea of the respondent and easier to understand each other. The second theme consisted of twenty-one questions that were directly related to the topic, these questions also consisted of sub-questions to get a deeper understanding of the topic and really get the study's research question answered and purpose answered.

The interviews took about six days to complete and each lasted between 30-40 minutes. Immediately one day after the interviews, the author began transcribing the collected data. The author began transcribing in the order in which the interviews took place. The reason why the author started transcribing immediately after the interviews was because the information should be fresh in the memory. The interviews were conducted digitally via an application called Skype. The conversation took place in rooms where both the respondent and the author were in their own rooms and therefore there were no disturbances. The author sent a missive letter to the respondent before each interview and the reason for this was for the respondent to receive information about how the interviews will go and be recorded.

The reason why the author needs to record their voice is because the author needs to remember and not miss anything important. Using a mobile phone of a pre-installed application, the recording took place. These audio files were then transferred to a computer and numbered from one to five, and the reason for this was for the author to be able to distinguish between these respondents. At the end of each interview, the author checked that the material had been recorded on the mobile phone without any problems. Once the audio files had been transferred to the computer, they were deleted directly from the phone even though the phone and the computer used for the purpose of the investigation had passwords so that no one other than the author could access the information. The interviews were

conducted in Swedish as the respondents spoke Swedish. The author therefore chose to conduct the interviews in Swedish to avoid misunderstandings as much as possible and to have a deeper conversation without language problems arising.

Analyses

The data collection has been analyzed with the help of a qualitative content analysis. In this way, the author has sought themes based on text obtained through the interviews (Bryman, 2011). What is meant by transcription is that the researcher writes down literally what has been said during the conversations to get a correct result. But it is through a qualitative content analysis that the researcher can analyze the material (Kvale & Brinkmann, 2014). What is meant by a qualitative content analysis is that at the end of the transcribed material, the researcher brings out various components and categories, which provides a clearer view of the subject Kvale & Brinkmann, 2014).

A qualitative content analysis is a method used to systematically describe and analyze the central content through a detailed and accurate reading of the text's parts, wholeness and the context in which it was included. Why the quantitative content analysis was not chosen is because the whole is not captured but only the sum of the parts. A content analysis as a method for the author to be able to perform text analysis by systematically breaking down and categorizing parts of a text content to answer the study's purpose and research question. The approach to content analysis is not a ready-made template because content analyzes can be used in various surveys and, for example, switch to other types of analyzes. This means that each survey needs its own explanations. The qualitative content analysis aims to

systematically explain the meaning of qualitative data by step by step categorizing parts of a material using a code schema (Kvale & Brinkmann, 2014).

Before the material for this study was transcribed and analyzed, the researcher began to read the material a couple of times to get an overview and understand the context and see the purpose of the study. The transcript for this study was a total of twenty-one pages with size eleven and line spacing 1.5. For the researcher to be able to more easily distinguish between the interviewees and keep the work confidential, they were numbered with the numbers one to five. Then the researcher selected and shortened the material into several meaningful units. This means that the external material and the text will be representative of the text's content (Bryman, 2011). The step thereafter is called condensed units of meaning and this means that the researcher in the study shortens the units of meaning to bring out the central and to make it easier to get an overview.

Then the researcher has coded down the condensed sentence units to get the core and this leads to the researcher identifying the content of the sentence and has shortened the

sentences to a few words. It is these codes that are decisive for the entire material but also the purpose of the study and the research question. According to (Thoren-Jönsson, 2017; p. 225), a code can be described as "a label on a sentence unit that briefly describes its content". After analyzing the words that the researcher obtained in this study, they have been subcategorized and categorized with a focus on a manifest perspective. What is meant by a manifest content is that it is an analysis of the collected material that describes the obvious content of what the interviewees have said during the conversations (Graneheim & Lundmann, 2004). The reason why a latent content analysis was not chosen was because the author did not have enough knowledge required to do so and therefore a manifest content was chosen. According to Kvale & Brinkmann (2014), there is a risk of misinterpretation if the author is

inexperienced.

The researcher created codes from the interview material that showed an interpretive meaning, and these codes were colored in different colors to be able to see the difference

between them. This also facilitated the subcategorization of the codes. A subcategory has more codes, which means that these have a similar content. The researcher did not exclude any codes, but all were included in subcategories. The researcher colored the codes in the same way as they were about the same subject, this also made it easier to subcategorize. With the help of subcategories, categories were then created that answer the study's purpose and research question.

Below is an example of a qualitative content analysis that the author obtained during the analysis and there were five different categories "Motivation”, “Business idea”, “Quality", “Knowledge” and “Planning". The author identified these categories, which were then representative of the study's purpose and research question.

Table 1: Example of a content analysis

Unit of opinion Condensed

sentence units Codes Subcategory Category “Everything I choose to

do comes from my heart; I only do that type of work that I love to do. And because I love my work and have passion for it I never give up even when it goes bad for me sometimes. I can only succeed when I believe in myself and don’t give up no matter what”

Having passion and never give up even when it goes bad sometimes is a way of success Passion Not giving up Patience Never quitting Have the will

Motivation

“My business idea was to bring something new and special”

Something new

and special Unique idea Something necessary and

needed Business

idea

be original because as you know there are many skin/hairs care shops that sell fake products”

Products to be original because there many fake products

Original

products Quality development

Quality “Make a deep research

about your idea and study it because when you have collected information about your idea it will be an easy way to start your business and even develop it. In my opinion I wouldn’t come so far and succeed if it weren’t because of a good planning. Because a good planning makes the process of starting your business much easier.”

Make a deep research and collect information about your idea Collecting studying information Collect information and develop it Knowledge

“In my opinion I

wouldn’t come so far and succeed if it weren’t because of a good planning. Because a good planning makes the process of starting your business much easier.”

Because a good planning makes the process of starting a business much easier Essential tool for entrepreneur s Planning Organizing Goals

Quality Criteria

According to Bryman (2011), a qualitative research method should be based on four quality criteria to increase the quality of the study results. These criteria are credibility, reliability, transferability, and confirmability. The first is credibility and means how accurate and real the material collected is in the study and the results. This criterion has been strengthened in this study by the author constantly checking the interview questions, reading from the results that it really describes what was meant for the purpose.

The second quality criterion is reliability and determines the extent to which the process is logical and documented. This means the extent to which the results can be repeated and create opportunities for other similar surveys (Bryman, 2011). The study has taken this criterion into account by constantly striving for a clear research process. The author has tried to describe the study process as detailed as possible.

Transferability means how the result can be applied in another environment (Bryman, 2011). This criterion has been considered by the author writing a clear description of the method of selection, data collection and analysis as it strengthens the transferability to another

environment.

Confirmability, on the other hand, means that the result should not be affected by the

researcher's own personal interests. Confirmability is about impartiality and neutrality in the data material not with the researcher. This criterion has been considered in that the

researcher has only proceeded from relevant literature and theories during the study and the interviews. As the transcript had used a manifest content analysis, this means that the text was written down verbatim to avoid the researcher's own interpretations of the result (Bryman, 2011).

Ethical considerations

Bryman (2011) writes that it is important that the researcher considers the ethical principles of the participants during the process. These ethical principles are the information

requirement, the consent requirement, the confidentiality requirement, and the use requirement.

The first is the information requirement, which is about the researcher informing the participants of the purpose of the study and it is voluntary to participate and that they have the right to drop out when they feel like it (Bryman, 2011). This requirement has been considered by the author sending the information through a missive letter containing the purpose of the study and a clear description of the information requirement. Then the author

also informed at the beginning of the interview as the interviews took place that participation is voluntary and that they can cancel their participation in the survey at any time if they wish. The second requirement is the consent requirement and means that the interviewees have the freedom and decide whether they want to be included in the survey or not. The author took this into account by collecting oral consent from the interviewees just before the interviews were recorded. The most important thing was that the author sent the missive letter to the interviewees so that they would understand what the study is about but also their rights.

The confidentiality requirement, on the other hand, means that the researcher handles the participant's information confidentially. This means that no other outsider may access the information about the participants in any way (Bryman, 2011). This requirement was also stated in the missive letter that was sent to the interviewees before the interviews took place. The author of this study has taken this requirement into account by keeping all information to himself until the study is approved and numbering the respondents' names instead of writing their real names to keep the information confidential.

The use requirement is about the collected material that it may only be used for the purpose of the study (Bryman, 2011). This study has only used the collected material for this survey and the transcript and interviews will be deleted when the work is completed and approved.

7

RESULTS

This study has obtained a result using five different categories that emerged after the analysis of the collected data. Categories that the author has developed answer the study's purpose and research question. The purpose of the study was to investigate entrepreneurs'

experiences on how to start-up their own business and what makes a business successful. The five categories that emerged during the analysis and which will be described in this section are “Motivation”, ” Business idea”, “Quality”, “Knowledge” and “Planning”. These categories have been divided into the results section as subheadings for a clearer understanding. The author has picked up some quotes from the interviewees who participated in the survey to reinforce the results and the categories that the author received. The author has removed some words that are considered inappropriate in the context of the sentence and this has been done by writing two square brackets and three dots […].

Table 2: Subcategory & Category

Subcategory Category

Never quitting

Have the will Motivation

Something necessary and needed. Business idea

Quality development Quality

Collect information and develop it. Knowledge

Make a business plan Business Plan

Motivation & Goals

7.1.2 Motivation

The interviewees show that "Motivation” has a strong connection to success in

entrepreneurship. Interviewees believe that you must have motivation to succeed as an entrepreneur. The interviewees thus believe that motivation is the reason why you have driving forces for an action or a behavior. Being motivated means that the person strives for something that he or she believes will pay off and that will provide satisfaction. Motivation according to the interviewees is the reason that you succeed as your own company because if we only do something because it is a "must", you will not perform your job as you should. The easiest way to start one’s own, according to the interviewees, is when the person has a highly motivated behavior because then they are the most energetic, powerful, and determined about how to proceed. The motivation according to the interviewees also increases a person’s perseverance and helps not to give up easily and continue to fight until he or she is satisfied. Interviewee 2

“Most importantly, believe in yourself and be motivated when you are going to start your own business. Working for yourself self means implementing your goals and dreams. You are motivated when you have dreams and wish to reach your goals”.

Above this paragraph is a quote that the author has chosen from the collected data. This quote that the author took comes from an interviewer and says that it is significant that people do what they love and have a passion for. The interviewee believes that if there is motivation and the will to do something, even if things sometimes go badly for the company, it is important to continue and not give up. Most interviewees mention that motivation among entrepreneurs is crucial to get satisfied customers and a profitable company. Interviewer one believes that no one and nothing can stop the development and success of your company if you do your very best.

Interviewee 1

“Everything I choose to do comes from my heart; I only do that type of work that I love to do. And because I love my work and have passion for it, I never give up even when it goes bad for me sometimes. I can only succeed when I believe in myself and do not give up no matter what. I tell myself I have goals that have to be done. When you do something

because you love and not only because you want money then everything is much easier and that’s ‘one of the reasons why I succeed in my business”

Starting a successful business according to interviewees starts first and foremost from motivation and then positive emotions. Entrepreneurs who have self-esteem and have the courage will be able to get out of most of the challenges that come their way due to the driving forces that the individual has. Interviewees say that it is individual about which driving forces create motivation. According to interviewees, it is the individual's job to find his or her own way to figure out what driving forces he or she has that create the motivation to succeed and start their own business. The interviewees agreed that when the individual finds the right emotions, they can be used to help the individual get started and start their own.

Interviewee 2

“Don’t let a fool make you doubt about what you are trying to do and what you can or can’t do. Because only you know what you are capable of and if you believe in yourself you can do whatever you want. When you want to start your own business, you shouldn’t listen to people who make you think negative or make you think that it is too hard to start your own business and that you can’t make it. Ignore all of these negative thoughts because if you want to success and become a successful entrepreneur you need to think positive, believe in yourself and be motivated”.

What is meant by the quotes above is not to be influenced by the environment. The

environment should not say what a person is capable of or what a person can and cannot do. It is important not to be influenced by negative thoughts from other people that lower a person's motivation and beliefs. If there is motivation and the person believes in his or her idea, he or she should start the process and start their own. To succeed, the person should stick to positive people who think positively and motivate one to follow the idea they believe in. In this way, the negative thoughts will be erased, and the person will not find it difficult to start their own. Because then the person is away from negative thoughts and will instead think positively and believe in themselves.

interviewee 4

“Factors that motivated me to start a business were the cool thing about being able to create something myself, to challenge myself on a personal and professional level and that it is an interesting job. Sometimes I got tired really tired that I had no motivation to keep going but little by little I told myself to not give up and have endurance”.