Entrepreneurship Development; why start with the entrepreneur first?
Startups and small businesses are – despite a high failure rate – of added value for many economies, including developing countries. Their major benefits to an economy are job creation, innovation, and economic growth. The added value would even increase significantly if more companies would survive their first years and show growth in the years to come. Evidently, the entrepreneur plays a crucial role in achieving this success. Yet, in entrepreneurship development programs, the focus is often on the growth of the company and less to none on the empowerment of the person behind the business.
There is all the more reason to focus on the business person. Scientists recently demystified that entrepreneurs aren’t born but made. In their article “Why do Entrepreneurial Parents have entrepreneurial children?” they found that the effect of post-birth factors is approximately twice as large as the effect of pre-birth factors. They have about 60% more chances to start their own business.
Training and coaching of the small business owner have an impact on all other business areas, like marketing, strategy, finance, and human resources. The entrepreneur personality profile is reflected in the choice of a business strategy, the marketing approach, and the attracted and hired people. And, with that, it ultimately influences the company’s financial results. When you start with the business first, it is hard to go back to the mindset. That is why it’s more effective for any entrepreneurship development program to begin with the entrepreneurial mindset first.
In this blog, the following topics will show the impact and results of entrepreneurship development programs focused on the small business owner first.
- Entrepreneurship development program
- Entrepreneurship development results
- Startup accelerator
- Reintegration program for entrepreneurs
Entrepreneurship Development Program
No entrepreneurial development program is the same. Yet, all these programs share some common steps. Of course, they all start with an introduction or kick-off. In the middle, there are all kinds of events, both one-on-one and group meetings that cover all business topics like innovation, funding (informal investors and venture capital), new business modeling, and capacity building, to name a few. At the end of the project, there is a concluding event.
A typical program that focuses on the entrepreneur first, looks like the entrepreneurial development program or e-learning below.
- Start with an entrepreneurial profiling test
- Enhance the entrepreneur’s profile with feedback
- A session with the program coordinator who keeps an overview of the entrepreneurship development process
- Select the entrepreneur coach provided by the institutions carrying out the entrepreneurship development program
- Sessions with the selected entrepreneur coaches focused on the empowerment of entrepreneurial skills and traits.
- Alternated with education sessions on various business-related topics, and group events with other participants for networking purposes
- Evaluation of the program and the progress made, as well as the development plans for the future
- End with a second entrepreneur profiling test
Entrepreneurship development results
In a special entrepreneurship education project that was conducted by the Dutch Chambers of Commerce – called StartSmart – the entrepreneurship development was measured. Participants could choose and select an entrepreneur coach to their liking. They could also follow pieces of training and could attend live network events.
Looking at the pre- and post results of the participants in this program, significant entrepreneurship developments are shown in one year. For all competencies, absolute growth is realized. As expected, skills or entrepreneurial qualities have grown significantly—more than the less easy to develop personal entrepreneurial characteristics.
More than 2/3 of the entrepreneurs increased their:
- Marketing knowledge and skills
- Belief in their own entrepreneurial potential
- Better understanding of the finances of their businesses.
- Their profits
Moreover, Panteia conducted an independent evaluation of this program. Panteia is an independent research agency for economic and social policy research. They conclude that this program is different from other more ‘general’ initiatives to develop entrepreneurship. According to the researchers, it is an addition to the entrepreneurial ecosystem. Participants rate the program with a 7.8 out of 10, and 88% recommend the program to other (first time) entrepreneurs, while 89% are (very) satisfied with the coaching. Even more special is that the participants, who didn’t complete the program, still rate it with a 6.9 out of 10!
In another project, aimed at regional economic development, about 1,000 founders were given the opportunity to get technical assistance and entrepreneurial coaching. For coaching purposes, participants were asked to do an entrepreneurial assessment test before the program started, and at the end. By measuring the difference between the first and last test, the entrepreneurial mindset grew by 17 points. This is a growth of 40.4%.
Reintegration program for entrepreneurs
Most small business owners don’t have an incapacity for work insurance because it is too expensive. Those who have such an insurance policy will only experience the benefits of having one once they have to claim their insurance. Besides, being unable to work, due to burn-out or an accident, for example, these unfortunate business owners also face losing their company.
So, not only is an experienced labor official called in to make sure the business owner recovers quickly, but a business coach is added to the recovery team to make sure their firm isn’t lost when they want to return. While the business coach is at the “crisis-scene,” they coach the unlucky business leader through an extended entrepreneurship development program, to ensure sustainable development.
- Reintegration program for incapacitated entrepreneurs: success rate 74% (60% fully reintegrated).
- More than 80% realize the goals set in the coaching sessions due to accurate insight into personal entrepreneurial skills and related action points.
- Reinforcement; 78% of the entrepreneurs take action after discussing the results of their entrepreneurial personality profiles with the coach.
Conclusion: why start with the entrepreneur first?
Due to globalization, growing population, urbanization, and digitalization, there is an even higher call for an entrepreneurial society. Societies need entrepreneurship education, as well as entrepreneurship in employment and SME’s. Creating space for an entrepreneurial way of thinking. Rewarding creativity and risk-seeking behavior and resilience, has grown in importance. There is a need for entrepreneurship development in an ever-increasing dynamic and uncertain environment. Training and coaching are crucial, and that’s why programs should start with the owner-manager’s mindset first.