According to Eurostat, 30% of employment in the European Union is concentrated in micro companies –less of 10 workers-, a figure that in countries such as Sweden is 22,4% and in Spain goes to 41%. The problem of this kind of SMEs or small entrepreneurs is their sustainability and therefore, employability. According to the same stats, the survival of this kind of small businesses in the first five years does not reach an average of 50%, with figures which go from 48% in France to 54% in Italy, 58% in the United Kingdom or 61% in Spain. (In Sweden 76% survive the first 3 years).
These data are reinforced internationally, with recent studies of Bloomberg, which sets that 80% of entrepreneurs who start businesses fail within the first 18 months. On the other hand, the survival of companies with at least 10 workers are considerably higher, with 20 points plus in Spain, 19 in Germany, 6 in France, 3 in UK and 1,2 in Italy.
Moreover, over the years, the percentage of employment destroyed in micro and small companies is higher, slowing their growth and also their contribution to stability and employability. This greatly affects local and national economy, taking into account last stats (International Monetary Fund, 2017) which reflect that in countries such as Spain 99% of companies have less of 50 workers, and 20 of them are closing every day (8% more compared to 2016).
Why? This is the key question. At surface level the primary reason businesses fail is they simply run out of cash. Obviously, there’s a particular reason for every entrepreneurial failure, and sometimes many of them: Entrepreneurs run out of money, the market changes, supply chains fall apart or the regulatory system makes it too hard to run a profitable enterprise. Those reasons, it’s assumed, determine whether entrepreneurial activity in a particular place is high, average or low.
Those are all valid reasons, but here’s one reason we rarely hear: The entrepreneur just didn’t have the talent for the job, and it does not mean that he/she does not have the intelligence or the knowledge of his/her sector, but many other concepts which have nothing to do with cognitive factors. So, one thing that’s missing in this discussion is the attributes of the individual, the person who is at the center of a company, making day-to-day decisions for running the business in highly uncertain circumstances, without full information. Here we have the concept of the low-skilled entrepreneur, both in hard or technical skills or, on the other hand, soft or human skills, as important to explain the success or fail of any business. This is where the psychology of the entrepreneur becomes critically important. And our research shows that talent, a composite of personality traits and intellectual ability, can explain variance in business performance over and above ecological factors.
Here, in the internal side of the entrepreneur is where coaching and Emotional Intelligence can work. It does not have to do with financial information, knowledge about the business, tax consulting, etc. but with the management of those other skills such as burnout, lack of motivation, lack of goals or incentives, problems to make decisions, self-esteem…
To achieve this, the Entrepreneurship for Everyone (EFE) project pursues the following objectives with coaches, entrepreneurs, leaders and managers as final users:
- To build a strong network partnership of 7 participating organizations across 6 European countries (Ireland, Poland, Portugal, Romania, Spain and Sweden) and with an outreach to all European countries to foster the knowledge and development of strategies in EFE.
- To develop the entrepreneurial capacity of European citizens and organisations as one of the key policy objectives for the EU.
- To establish a training program that accompanies final users in the implementation of acquired training skills and training plans.
- Define the importance of entrepreneurship and the talents necessary for entrepreneurial success.