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 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
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.
smus+.