TO FIND A JOB OR START UP A BUSINESS

 

                                              Anastasia Kristova

Abstract
I have investigated people's career development preferences. I interviewed people by asking them two simple questions: would you choose to look for a job in an established company or to think of a business idea and start your own company. I report the limitations and obstacles for people to start a business and provide some recommendations regarding the start-up ecosystem environment in Bulgaria.

INTRODUCTION
The aim of this study is to answer two important questions:

  • Do people prefer mostly to get a new job in an established company or to start up a business on their own?

  • What are the obstacles to starting a new business?

 ‘Frederik Herzberg during his research asked a simple question: what do people want from their jobs?’ (Shriberg & Shriberg, 2011). It turned out that extrinsic factors (hygiene motivators) like good salary, job security, personal relationships, etc. cannot satisfy an employee together and lead to dissatisfaction when they are missing (Shriberg & Shriberg, 2011). Many scholars, including Luthans (2005), Mullins (2007), Shriberg & Shriberg (2011), French et al (2011), George & Jones (2012), Robbins & Judge (2013), and Dessler (2013) indicated that the factors which bring job satisfaction are the real motivators (so called intrinsic factors) – first of all the recognition and appreciation from colleges and supervisors, the opportunity to grow, and being responsible for the interesting job.
Robbins (2009) indicated that McClelland’s needs theory refers to people having the need for achievement, the need for affiliation and the need for power. There would be a satisfaction only after the fulfillment of these needs. 
According to the research conducted by Roe, Zinovieva, Dienes, & Horn (2000), Bulgarian employees become more involved and committed in their work only after the influence of extrinsic factors (Herzberg’s Theory here is applied) – good pay and opportunity to grow. The research also indicated (Roe et al, 2000) that if these factors are missing, this could cause a negative effect on Bulgarian employees and they will probably leave the job. In addition to this it was found that factors like job security, job involvement and opportunity for advancement are very important factors for Bulgarian workers (Roe et al, 2000).  

Nowadays young, highly educated people, sometimes even with managerial experience, skip the experience of working for an established company and move directly to work on their own ventures (Wikham, 2006). On the other hand, some people turn to an entrepreneurial career because nothing else is open to them. Lots of people dream of working for themselves, and sometimes they need a little push.

According to Stokes & Wilson (2010), some people are attracted towards self-employment and small business by positive motives which could be considered as pull influences, and those which encourage people to become self-employed by virtue of the attractiveness of the entrepreneurial option, for example:

  • Desire for independence - is a key motivator and provide freedom to work for oneself

  • Willingness to exploit an opportunity - often people perceive a gap in the marketplace through experience or personal observation, which could be a reason to start a business; also could be an opportunity of freedom to pursue a personal innovation as well as desire to gain the social recognition achieved by entrepreneurs  

  • Turning a hobby or previous work experience into a business - many entrants seek fulfilment and prefer mostly to spend time developing something of which they have direct prior experience; also brings a sense of achievement which could be gained from running one`s own venture  

  • Financial incentives - the promise of long-term financial rewards of entrepreneurship if the project will be successful could be of a great motive

Also there are push factors as negative developments in somebody’s career which lead to a decision to start-up a business:

  • Redundancy

  • Unemployment (or threat of) – job insecurity and high unemployment rate can significantly push people to new ventures

  • Disagreement with previous employer – misunderstanding and uncomfortable relations at work could push entrepreneurs into business

  • Career limitations and setbacks in a conventional job so as being a ‘misfit’ in an established company

According to some research on entrepreneurship in different countries (Reynolds, Bygrave & Autio, 2004) these push/pull factors are explained in terms of necessity-based and opportunity-based entrepreneurship. The necessity-based entrepreneur means the lack of alternative possibilities for employment. This is typical for poorer, less developed countries where job opportunities are few. On the other side, the opportunity-based entrepreneur is one that seeks out a new opportunity in a more proactive manner.

In addition to this, Carter and Jones-Evans (2006) found other drawbacks to self-employment. According to them, self-employment put people’s future security at risk; they are less likely to have a stable occupational pension and a significant volume of savings. This in turn implies a greater dependency upon the state pension in later life. The most important thing when starting a new business is to be realistic and clearly understand what you are undertaking.

Limitations to start-up according to Wickham (2004):

  • An inability to find capital for a start-up

  • The high cost of capital

  • Possible legal restrictions on business activity

  • The risks could occurred by the business environment

  • A lack of suitable human resources

  • A lack of training for entrepreneurs

  • Personal inertia on following through business ideas

According to Timmons & Spinelli (2003), the start-up stage usually covers the first two to three years and characterized by the exhaustive and direct drive, energy, and entrepreneurial talent of a lead entrepreneurs or a key team members. During this stage market, financial results, and competitive elasticity are established, while investor, banker, and customer confidence is earned.

According to Roe at all (2000), the extrinsic factors are the major sources of job commitment for Bulgarians. This could be explained in accordance with cultural differences as Bulgaria is considered to be individualism country (Hofstede, 2014). As in the sense of motivation variables one would expect a greater emphasis in order to satisfy order needs and especially the need for growth and self-esteem.  In fact, self-actualization is considered to be an integral part of individualism (Spence, 1985).
In 2007 KMPG Bulgaria took survey to figure out what plays role for motivating employees.  As it appeared the most important incentives for Bulgarian employees are financial rewards (31%), showing recognition (21%), and career development opportunities (17%). In general financial rewards and career opportunities seemed to be the most influencing factors for increasing employee’s motivation in Bulgaria (Daskalova, 2007).

Figure 1: Factors influencing employee motivation (%)

Source: KPMG (2007).
According to Daskalova (KPMG, 2007), the leading motives for Bulgarian students in order to satisfy their future choice of a company to work in are remuneration (73%), career development (53%), opportunities for vocational training (37%) and interesting work (29%). However looking at Figure 18 below, there are some differences and variations between students from different years and courses. 

Figure 2: Reasons for choosing employer (%)


Source: Bulgarian Students Professional Orientation and Motivation Survey (2007).

Overall people are satisfied with their working conditions in Bulgaria. However there are a number of people who are not pleased with the atmosphere at work.

Figure 3: Satisfaction with working conditions by gender

Source: NWCS (2005).

Genov (2004) and Minkov (2002) found interesting fact, that Bulgarians have traditionally viewed work as means for survival, rather than enjoyment and self-fulfillment. After that in 2007 Hayward & Kemmelmeier found out that Bulgarians valued less autonomy and self-expression and more economic and physical security. According to Genov (2004), majority of Bulgarians viewed their work as a method of survival, where 35% reported they would not work if they did not have to pay expenses and other payments; 15% always made maximum efforts for work and only 11% really enjoyed working and considered it like an important part of their lives.

METHODOLOGY

 

My survey population consists of men and women, aged 20-40, living in Sofia, who are willing either to start a business or to find a job in an established company.  It consists of around 130 people: university colleagues, work colleges, and friends. University colleges are about 50 people, work colleges approximately 10 people, friends – 40 people. Around 30 respondents were experts whom I interviewed when I was at the StartUp NEXT Conference 2013 in Sofia.
The questionnaire consists of 20 questions with multiple choice answer opportunities. At the first two pages I wrote the cover letter with abstract of my thesis and information list regarding rules of confidentiality and anonymity applied in my research. Questions are short, understandable and easy to answer. The 80 questionnaires were printed in the form of booklet; 40 questionnaires were sent via Facebook, to friends whom I know.

 

RESULTS

                             

Figure 4: Sample demographic profile


As we can see almost all respondents are working people, some of them even eager to start a business (20 out of 120 people).

Surprisingly, half of the respondents are eager to start a business if they had the opportunity to choose. 

Personal development and salary and benefits package play the most important role in choosing the particular company to work in for Bulgarians.

The most attractive job is once that gives opportunity to progress and compete with others and possibility to career development ladder.

People are willing to leave a job in case of the better prospects in another place or if the job is no longer interesting and upsets work-life balance.

It was nice to discover that overall people perceive losing their job as a chance to start a business or retrain and learn new skills.

People still want to be self-employed and are eager to devote time to personal development and gaining experience for their business.

Overall people are willing to work for themselves. Only women a little uncertain.  

Figure 13 confirms once again that people who answer “Yes” in the previous question want to be independent and get fair rewards for their efforts. That is why they consider start-up as an opportunity for them.

Overall it is hard for people in Bulgaria to live with uncertainty and insecurity about their job and income. This can be explained by the general political instability, critical economic situation in the country and low wage rates.

Financial limits are the main restraints for people to start a business according to Figure 15. However at the same time there were people who do not have limitations at all and the same number of people who prefer security and stability for their families without a desire to take a chance for the start-up. 

Both males and females would use credits and personal savings for financing the business. In case of females they consider option like loans from family and friends in comparison with men who prefer personal savings and bank loans mostly.

I was pleased to see that the majority of people already have their business plans or thinking about it. It also means that people are no longer passionate about working in a company and want so have their own businesses. 

The last question I formulated in order to found out how long people should work to get to the high job position. As it turned out in order to become a director people should work more than 5 years, manager – 3 to 5 years, for expert people need about 1 year. By becoming a self-employed you immediately will transform into director or a manager.

 

 

ANALYSIS

The results indicated that when it comes to choose the company to work in, the most important role for Bulgarian employees plays the personal development and salary and benefits package. What is more according to my research, the most attracting factors that motivate Bulgarian employees turned up to be opportunity to progress and compete with others and career development ladder. Moreover the primary reason Bulgarian employee would leave the job would be the opportunity of the better prospects in another place (Figure 7). In addition to this majority of respondents (Figure 8) perceive losing a job as a chance to start a business or retrain and acquire new skills and competences. It could be explained by the fact that Bulgarians are motivated only by extrinsic factors as Roe et al (2000) mentioned above. To support this view Herzberg’s Two Factor Theory research was conducted with the aim to found out what do people want from their jobs. According to Schriberg and Schriberg (2011) and other scholars, the extrinsic factors like good salary, job security and personal relationships will lead to dissatisfaction if they are missing. So I might say that Bulgarian employee in case of no opportunity of advancement and better prospects would be dissatisfied and will leave the job (Figure 7). The results from my research show similarities with the research conducted by KPMG in 2007. KPMG discovered that motivation incentives for the Bulgarians are financial rewards (31%), recognition (21%), and career development opportunities (17%). If we look at Figures 5 and 6 from the primary research section we will see that I received almost the same results. In general financial rewards and career opportunities seemed to be the most influencing factors for increasing employee’s motivation and satisfaction in Bulgaria (Figures 5 and 6).
Furthermore according to results of the question 7 (Figure 9), Bulgarians perceive their personal development as gaining an experience that will allow them to set up their own company. That means that work perception has changed and Bulgarians are eager to become entrepreneurs.
Considering the results from the primary research it turned out that overall Bulgarians nowadays are inspired to set up their own businesses (Figure 4 &10). Despite the fact that they cannot live with uncertainty and insecurity about their income and job, Bulgarians still want to be self-employed. The reason for such an opinion is the desire to be independent and get fair rewards for efforts at work. To support the results, Daskalova (2007) found that remuneration (73%), career development (53%), training (37%) and interesting work (29%) will lead to dissatisfaction if these factors are missing at work. So this overall dissatisfaction leads to increase in entrepreneurship among Bulgarians.
What prevents people from starting their businesses?  Financial limitation are considered to be the main obstacle. However there are people who do not have limitations at all and the same number of people who prefer to stay at their current jobs due to the stability and security for their families and are not eager to take risk and start a business.
People choose personal savings and bank loans as a method of financing a business (Figure 14). Interestingly, females prefer loans from friends and family more than males who prefer personal savings and bank loans mostly.

CONCLUSIONS

 

The majority of people wish to become self-employed due to the fact that they want to be independent and receive fair rewards for their efforts.
What is more, it has appeared from the primary data that Bulgarians perceive personal development and career opportunities ladder as the most important factor for their motivation. They are mostly attracted to jobs that offer opportunities to develop and compete with others.

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