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Study summary

Personal initiative training for microbusinesses and small business

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Small business owners benefit from being taught action-ready rules on how to be more self-starting, proactive and persistent in managing their businesses.

General description

Small business owners are given free, theory-based, personal initiative training that combines the presentation of action-ready rules with practical exercises to help them learn by doing. The course covers goal setting, searching for information, action planning and execution, monitoring and feedback seeking. It’s aimed at making business owners more self-starting, proactive and persistent.

Aim

  1. To increase business owners’ personal initiative
  2. To improve business performance

Context

This intervention was tested in a country with one of the highest levels of entrepreneurial activity in the world but where most business owners often lack a high degree of personal initiative. That is, a country where most entrepreneurs tend to imitate what other business owners do instead of actively searching for niches.

Participants

Owners of small businesses that have been operating for at least one year. On average, participants are about 40 years old and have 14 years of schooling. Approximately half are women and half are men.

The businesses they run have between 1 and 50 employees, have been operating for about 8 years and 20 per cent of them are informal businesses.

Activities

  • Personal initiative principles: Participants are presented with a series of action-ready rules of thumb to encourage them to be more self-starting, proactive and persistent when managing their businesses.
  • Case studies: A series of case studies of entrepreneurs showing high and low levels of personal initiative in managing their businesses are presented and discussed in class.
  • Practical exercises: Participants work in small groups to put in practice the personal initiative principles using another case study. They develop an active plan for one of the proposed goals, discuss potential future problems during execution and establish a back-up plan to respond to them.
  • Personal project: Participants apply the personal initiative principles they have learned to their own businesses and create a plan to improve it: they formulate a goal, reflect on where and how to get helpful information, formulate a plan to achieve it, and develop a feedback and monitoring system.

Results

  • The training increased the personal initiative behaviour of participants.
  • One year after the programme, firms that had received the personal initiative training showed higher sales and numbers of employees than those that hadn’t.
  • These effects seemed to be fully driven by the higher personal initiative behaviour.

Policy implications

  • Teaching small business owners action-ready rules about how to show more personal initiative when managing their firms can help them to be more self-starting, proactive and persistent and grow their business.

Full study