Business owners around the world draw on a range of different influences
There are an estimated 400 million entrepreneurs worldwide. Many share similar characteristics: courage, ingenuity and a passion for business. Delve deeper, however, and intriguing regional differences emerge.
Characteristics such as what defines success for entrepreneurs, whether they build their company for the long term and how their family influences decision-making vary from East to West. Understanding these trends may offer a valuable insight into the role entrepreneurs play in building economic growth.
In China, Hong Kong and Singapore, for example, entrepreneurs are likely to see their business as something that should be passed on from one generation to the next. Many business owners in these regions are the sons and daughters of entrepreneurs. Building a well-respected business for future generations is important to them.
Entrepreneurs in China, Hong Kong and Singapore have an average turnover of almost USD10 million and each employs 100 people
These entrepreneurs want to create a legacy. And this means they are less likely than their Western peers to consider an early exit from their business. In China, for example, only 24 per cent of entrepreneurs surveyed in HSBC’s recent Essence of Enterprise report said they intend to sell their business, compared with 55 per cent in the UK.
The International Festival for Business takes place in Liverpool between 13 June and 1 July. An estimated 30,000 delegates from nearly 100 countries will meet to discuss the opportunities and challenges facing businesses today.
Co-sponsored by HSBC, the event provides companies and entrepreneurs with an opportunity to build partnerships and strike deals.
Taking a long-term view can enable entrepreneurs to build larger and more profitable businesses. HSBC’s research found that entrepreneurs in China, Hong Kong and Singapore have an average turnover of almost USD10 million and each employs 100 people – roughly double the figures for equivalent enterprises in the US, the UK, France and Germany.
US and European business owners have a different mindset. Often they define themselves as an entrepreneur early on in life – a contrast to Asia, where people tend to see themselves as an entrepreneur only once they have started their first venture. Serial entrepreneurship is also more common in the West where entrepreneurs will typically run several businesses, selling once they become profitable.
Entrepreneurs in the West are also far more focused on building their personal wealth than their Asian counterparts – so realising a good return on the sale of a business is important. Their decision to start a business is often motivated by the desire to create a better work-life balance and spend more time with their family. By contrast in Asia, entrepreneurs are far more likely to prioritise bringing the family in to the business.
Globally, however, what it means to be an entrepreneur is changing. A new generation of entrepreneurs is embracing the internet and new technologies. More women are setting up and running successful ventures, particularly in Asia. And developing businesses with a social conscience is becoming increasingly important for a younger generation of entrepreneurs.
Whatever their motivation, and wherever they do business, entrepreneurs will continue to strive to build companies that generate jobs, create wealth and boost economic growth. Helping them to do that can only be good for society.
Keeping it in the family
Passing on the family business to the next generation can be fraught with problems. Who has the right attributes to run the company? How should jobs and wealth be distributed fairly as the family expands? What happens when someone wants to leave the business, perhaps to start their own venture?
Creating a clear succession plan is essential for any family-run business. Planning ahead can aid decision-making and avoid disputes. It can help to establish clear roles as the family grows and younger generations join the business, as well as ensuring the long-term success of the firm.
HSBC regularly holds client forums to help entrepreneurs consider these and other succession issues.
Listen to a podcast on the topic recorded at an event in Shanghai, China.