Setting up a new venture may no longer be such a risky prospect thanks to the work of a scientist who has devised a formula for business success.
The equation created by statistician and industrial psychologist William Hartston calculates the necessary requirements for a company’s success.
The formula, S = (cv P + L/150 + 2.3F) divided by [1 + (Y-1)2], works out the likelihood of success by using a range of factors that impact on businesses.
The factors include: the fraction of the business that is under the entrepreneur’s control (C), the percentage of people whose lives can potentially be improved by the product (P), gender (F, where a female entrepreneur is 1 and a male is 0), distance from London in hundreds of miles (L), and the number of years from the time the idea was conceived to launch of the company (Y).
The formula was based on research commissioned by Vodafone UK which found that freedom and flexibility is more important than making money for 87% of people setting up their own businesses.
There is also good news for females who considering starting up as the research shows that women are more likely than men to experience year on year growth.
Women are also more likely to be motivated into setting up a new business by making a difference for others, rather than money and were 60% more likely to have surpassed their own expectations.
Regionally, Scotland and Yorkshire were found to be the most successful regions for small businesses, whereas Brighton and Plymouth were found to be least successful.
The findings come as part of the on-going ‘Working Nations’ study commissioned by Vodafone UK.
© Crimson Business Ltd. 2006
