- Is this sufficient evidence of success?
- If this rate were replicated elsewhere would it help to achieve objectives for increased entrepreneurship?
- Should we strive for a level of entrepreneurship in a community that planners believe to be sufficient to achieve their economic goals?
- Should we respond effectively and sensitively to enterprising people as they come forward and then use their success to encourage their peers to follow in their footsteps - setting up a feedback loop that inspires local people to achieve more?
- Should we have sufficient belief in local people and their own capacity to grow to set up programmes that respond?
- Do we have the courage, patience and faith to let communities develop an enterprise culture at their own rate or do we believe that is something that has to(and can)be forced?
- Can we identify rates of entrepreneurship that will represent 'success' and then manage a series of interventions to achieve them?
The alternative approach is to motivate and incentivise large numbers of people to do something that they would otherwise not be willing to do. And in our experience this is not a recipe for success.
In our experience this is not a difficult choice between two potentially viable approaches.
One of them works consistently to contribute to the re-birth of local economies in a sustainable and cost effective way.
The other does not.
1 comment:
How many starts is enough? This would have to depend very much upon how sustainable the starts are.
My personal background includes 43 years with a large Canadian based international bank. My work there centered around small business, all the way from hands on account management to senior positions wherein my work included helping to establish the bank's policies for dealing with small business, sitting on multi-bank committees that focused on small business issues and liaising with small business associations and lobby groups as well as federal government banking regulation bodies. During that time I developed both an understanding and an appreciation of the value of the small business sector within our economies as well as the very high level of associated risks.
The measured failure rate in small business has been in the order of 85% in 5 years for many, many decades and, despite the efforts of traditional support systems, this has not changed! So, if you start 100 businesses in any given year, only 15 of these will still be around 5 years later. The other 85 will have failed. Nearly all of these failures will be accompanied by credit write offs, defaulted leases, evaporated asset values, loss of jobs, erosion of tax bases, depletion of personal wealth, re-burdening of social support systems and so forth. Added to this will be the "costs" that accompany the personal failures of the related entrepreneurs, such as loss of self esteem and stress in the family. These levels of misery can only be really appreciated when seen first hand, either from within as I did through the eyes of the child of an entrepreneur, or from without as I did from the position of a small business banking account manager who cared deeply about his clients.
For more than 20 years, the measured failure rate for new businesses started with help and guidance from Sirolli Enterprise Facilitation community projects has been less than 15%. This means that if you start 100 businesses in a given year, at least 85 of them will still be in operation 5 years later. Furthermore, an extensive study undertaken in Australia found that the growth rate of these businesses is more than double that of businesses which had not benefited from Sirolli Enterprise Facilitation. This suggested that businesses did more than merely survive, they actually prospered.
The math should be easy for anyone to do but what is seems important to me is that the traditional small business development scenario has always contemplated an outcome where failure and misery outweighs success in the order of more than 5 to 1, whereas Enterprise Facilitation contemplates an outcome wherein the joy of pursuing one's passion and successfully supporting one's family and loved ones is the majority outcome rather than the minority.
So, in my opinion, the answer to the question "How many Starts is enough" may have different answers depending upon the perspective as well as the objective. Given the 5 to 1 failure rate that results from traditional approaches, might not any starts be too many?
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