Offering intensive in-class mindset-oriented training can help business owners to develop psychological traits associated with entrepreneurial success, like self-efficacy and personal initiative. Such training can lead to persistent improvements in business performance when accompanied by a few on-site follow-up sessions by the trainer.
What’s the rationale behind this?
Successful entrepreneurship is about being able to identify and exploit good business opportunities while operating under uncertainty, risk, complexity and resource scarcity. It also requires having the capability to overcome barriers that might arise during the entrepreneurial journey and being able to get over negative emotions that might come after setbacks.
The psychology literature has long noted that, beyond business knowledge and standard economic variables, there are mindset-related traits that are strongly associated with entrepreneurial success such as self-efficacy, locus of control, being self-starting, being proactive and showing persistence. Among others, these psychological attributes shape the entrepreneurial mindset.
Under the assumption that these psychological traits can be fostered through training, mindset-oriented training focuses on developing an entrepreneurial mindset among entrepreneurs so that they can anticipate opportunities and problems, actively approach challenges and better plan for the long term. This should allow them to be able to take advantage of first-mover advantages, differentiate themselves from other businesses and better overcome barriers and setbacks; ultimately leading to better business performance.
Small business owners
Outcomes of interest
Entrepreneurial mindset, business survival, business performance
Does it work? Here’s what we know so far…
- It’s possible to develop psychological traits like personal initiative, proactivity, persistence and self-efficacy among business owners through mindset-oriented training.
- Business owners offered a mindset-oriented training programme are more likely to increase the adoption of good business practices in the short run. This is true even in instances where specific materials on business practices aren’t part of the training.
- In particular, business owners are more likely to introduce a new product, service or production technique. They’re also more likely to introduce original products.
- The effects of mindset-oriented training on the number of employees, capital and access to credit are mixed across the different programmes and don’t show a clear pattern.
- Mindset-oriented training doesn’t seem to affect the likelihood of firms surviving for one to two years after the programme implementation.
- Mindset-oriented training can increase business sales and profits three to twelve months after the training. However, in most cases these positive effects tend to vanish in the longer run.
- Mindset-oriented training can outperform traditional training, leading to higher sales and profits.
Return on investment
- The short-run increases in profits alone compensate for the cost of 30 to 40 hours of mindset-oriented training, implying a positive return on investment.
complementary FOLLOW-UP VISITS
- The positive effects of mindset-oriented training on entrepreneurial mindset, adoption of recommended business practices and business performance tend to disappear two years later.
- The only exception is a training programme which is complemented with monthly follow-up visits by the trainer (over four additional months) to answer follow-up questions and assist business owners with the implementation of the concepts learned.
Who benefits the most?
- Mindset-oriented training seems particularly effective for men entrepreneurs, while their effectiveness in improving women-led businesses is less apparent.
Ideas worth trying
- If you’re running a training programme for small business owners, consider dedicating all or part of it to developing the participants’ entrepreneurial mindset.
- If you’re offering mindset-oriented training, consider adding a few on-site follow-up visits by the trainer during the following months to answer questions and assist business owners in implementing the concepts covered in class.
- When designing a mindset-oriented training programme, take into consideration that women and men are likely to experience different psychological barriers to successful entrepreneurship.
What to avoid
- If aiming for long-term improvements in business performance, avoid limiting mindset-oriented training to a few weeks of in-class sessions.
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