What motivates people in the Netherlands to start their own business? What risks do they envision? Who are their advisers? Rabobank commissioned research agency GfK to conduct a survey among 600 Dutch entrepreneurs who are starting or have recently started a business to find answers to these questions. Joey Plaggenborg is Business Banking Sales and Service Adviser at local Rabobank Rijk van Nijmegen and works extensively with start-ups. He compares his practical experience to the key findings from the survey.
Survey: There are three main motives for starting a business: Wanting to be your own boss, wanting to follow your passion and being unable to find permanent employment.
Plaggenborg: ‘I see these motives in practice. The reason for starting a business often ultimately lies in people’s intrinsic motives and qualities and desire to follow their passion. I do, however, see a difference in practice between people who do not have a network and those who do. The start-up entrepreneurs with a network find it easier to get enough business.
People who are more or less forced to become self-employed are uncertain about their new existence. They have lots of questions about the best legal form, taxes and who to turn to for assistance regarding various matters.’
Survey: Start-up entrepreneurs almost never consult their own bank about their own business.
Plaggenborg: ‘It’s true that people hardly ever view their bank as a connector or adviser. We are asked mainly two main questions: ‘Can I open an account?’ and ‘Can I have a loan?’.
As a bank we have so many contacts and such a large network and we can leverage these resources to do more for start-ups. We can’t, of course, simply give a client’s details to other clients. But we can ask a client during a meeting who they would like to come into contact with. That’s part of a comprehensive consultation.’
Survey: Three-quarters of start-up entrepreneurs use exclusively their own capital or capital from family.
Plaggenborg: ‘We should more often take the time to explore the potential possibilities with clients. So say somebody needs 300,000 euros to buy a commercial property to accommodate a hair salon or bar or restaurant, but only have 20,000 euro equity. They soon discover that they don’t have enough financial resources in this case. But we can still fulfil our role as financial connector by looking with the client at how this need could still be met through other forms. The same goes for people who have innovative ideas who are looking for funding. Even if it’s too risky for bank financing, we can still assist and advise these entrepreneurs.’
Survey: Gaining enough customers (55%) and financial uncertainties (54%) are the two things start-up entrepreneurs worry about most.
Plaggenborg: ‘This chimes with my experience. That’s why during the start-up cafés that we organise we let our own clients talk about customer acquisition and using social media. Many start-ups wonder: If I don’t have any orders or projects, how am I supposed to carry on? Sometimes they need some kind of a bridge facility.’
Survey: The most important pieces of advice start-ups give to others wanting to start their own business: Follow your heart (37%) and make sure you have enough money (35%).
Plaggenborg: ‘What I personally like about start-up entrepreneurs is that they are often incredibly motivated. They put their heart and soul into their new business and we can give them a helping hand. When I then speak to a client later, they often tell me how much that meant to them. That makes it all worthwhile. It’s what gives me energy.’
- A good plan by the entrepreneur deserves a good advice from the bank
- New perspectives in Dutch SME financing