Does “Practice Make Perfect” for Entrepreneurs?
Business funding from the government is something many entrepreneurs rely on to ignite what they hope is a successful career. However, a significant amount of these monies go wasted as these small businesses find themselves belly-up. This certainly leads to the obvious conundrum of who is worthy of such an investment.
If you’re either an entrepreneur or involved in government lending, this article is especially worthy of your time. In fact, the subsequent findings have the potential to impact public policy moving forward!
A new study tries to answer the puzzle by observing French entrepreneurs and how their firms either sink or swim. Researchers looked at these business owners’ experience in the labor market and managing startups. They also took their education into account.
The goal was to use that data to answer the following questions:
- Is it possible to identify leadership potential from their background alone, or does “practice make perfect” for these entrepreneurs?
- What matters more: experience in a sector that’s growing quickly or leaders’ general abilities?
Here’s what information surfaced from the study: Education, networks and experience played a strong role in determining if a leader was able to not only survive in his or her business — but grow it. However, the effects of these characteristics varied fairly dramatically based on external economic conditions.
Younger (and thus less-experienced), less-educated entrepreneurs and those business owners with fewer clients to begin with were more likely to struggle when economic choppy waters headed their way. And, ultimately, experience rose to the top as a way for entrepreneurs to thrive beyond the influence of outside economic downturns.
While practice doesn’t necessarily make “perfect,” it certainly helps when predicting who will take government dollars and build a business that will survive the test of time.
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