Fear of failure is deterring entrepreneurs

The introduction of a “second chance” entrepreneurial support programme could help remove the stigma that surrounds business failure and help entrepreneurs deal with the fear of failing when establishing a new business, according to the Small Firms Association (SFA).

“To develop our indigenous business structure we need to ensure that Ireland offers entrepreneurs support to turnaround a business from the brink of crisis, assist with restructuring if the business foundation is untenable and even after failure help in the establishment of a new business venture,” said SFA assistant director, Avine McNally.

Given the economy’s difficulties, the fear of failure among the Irish entrepreneurial adult population has risen from 35 per cent in 2006 to 45 per cent in 2013, according to the GEM report.

“Even if statistics show that entrepreneurs who have experienced failure learn from their mistakes and are more successful in the future - they can nevertheless face the stigma of failure. If we are to encourage a greater number of start ups we must give entrepreneurs who have failed more support and a better chance to make a fresh start,” McNally says.

Noting that many EU countries have developed early warning /second chance programmes for small firms, McNally said that a strategy moving forward could be to provide entrepreneurs with warning tools and assistance in identifying situations that could lead to insolvency or the closure of the business.

Such supports should involve awareness and advice/mentoring to assist companies in restructuring, crisis management, debt settlement and support for re-starting the business. The structure should be a collaborative one between consultants, voluntary advisers and lawyers, who each contribute with their unique knowledge.