Numerous studies show that small business and entrepreneurism are vital to the health of our nation’s economy. In fact, over the last decade, these types of ventures account for 70% of economic growth, 75% of new jobs, and represent 99% of all employers. However, there remains a high rate of failure in these ventures, with over 60% of them failing within 6 years. Studies show that one reason for this failure is that entrepreneurs fail to learn new knowledge/skills as their organizations grow.
Unfortunately, only a limited number of studies have been conducted to investigate the learning process of entrepreneurs. The purpose of this descriptive ethnography was twofold: (1) explore the learning and development challenges experienced by entrepreneurs in the various phases of organizational growth, and (2) explore how entrepreneurs recognize the need to learn and develop plans to address the challenges. Once learning and development challenges, along with corresponding knowledge and skills, are identified, then learning solutions can be developed and offered to help entrepreneurs acquire them.
This descriptive ethnography was conducted with nine entrepreneurs from Northwest Ohio and Southeastern Michigan. Results included primary themes of learning challenges and the knowledge/skills needed to overcome them. Means of recognizing the need to learn new knowledge/skills and learning tools to acquire them were identified. Finally, participants gave nine pieces of advice for fellow entrepreneurs.
This study resulted in 14 findings regarding entrepreneurial learning. Recommendations were provided for entrepreneurs, learning solution providers, and lending institutions. Several additional recommendations for future research emerged from this study, which are noted.
An Analysis of the Learning Processes of Successful Entrepreneurs
1. An Analysis of the Learning Processes of Successful Entrepreneurs by Brian K. Chupp Dr. Robert Sullivan, Committee Chairman Dr. Sonny Ariss, Committee Member Dr. Clint Longenecker, Committee Member Dr. Robert Schultz, Committee Member
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6. 1. Intra-personal 2. Financials 4. Managing People Stressors at Start-up Stressors after Start-up Confidence Costs of starting/running a business Funding sources Help from others Performance management Employee relations Recruiting talent Research Question #1: What are the most significant learning and development challenges experienced during the various phases of organizational growth? The right fit Hard Work and Effort Positive cash flow 3. Business Planning & Execution Formatting options Developing a business plan Execution of business plan Modifying the business plan 10 Themes
7. 5. Work Responsibility & Delegation 6. Building infra-structure 8. Product & Service Development Both feet in Delegating tasks Complex processes Establishing the relationship Behaviors can go from helpful to being a hindrance Customer base Research Question #1 continued Product/Service Complex structures Maintaining the relationship 7. Customer Connectivity Before start-up After start-up Quality Out of control quickly 10. Diversification 9. Managing Growth 10 Themes
8. 1. Business When to start or exit Research Question #2: What specific knowledge/skills are most important to entrepreneurs'’ success at each of the various phases? 2. Customer 3. People 4. Financial 5. Product/Service Development 6. Personal Customer service Communication Recruiting Legal Human Resources Vision/Mission Find expertise Timing of adding resources Sales Negotiations Customer Needs Marketing Hiring Setting expectations Developing people Reward Communication Accounting Cash flow Receivables Banking Expense Control Passion Resourcefulness Priority Mgmt Knowledge of Industry Engineering R & D Computer Remaining Positive Honesty w/ oneself Persistence Pricing Supplier Relationship Benchmarking
9. 1. Network of people Informa l Research Question #3: What are the most valuable learning tools for entrepreneurs? Who/What helped? 3. Formal & Informal education 4. Prior Experience 5. Purchasing Knowledge & Skills Customers Universities Like-minded Mentors Investors/Partners Professional Staff Leadership positions Committees R & D Staying active in their field On-line classes Conferences & Seminars Internet Books/Magazine Industry Previous ventures Military Management Accountant Human Resources Product/Service Attorney 2. On-going experience
10. 9 Intrinsically Motivated Factors Research Question #4: How do entrepreneurs recognize the need for learning? 7 Extrinsically Motivated Factors 2. As confidence builds, they start focusing long term 6. Once they put their ego aside, they start to recognize the gaps 5. Intuition tells them that they need to do something 4. When entrepreneurs just don’t love what they are doing anymore 3. Entrepreneurs utilize prior experience to determine gaps 1. As time goes by, entrepreneurs realize that they can’t get everything done 8. They use the fear of failure 7. They are no longer satisfied with their present situation and want to move the organization along 9. They utilize mental exercises, such as introspection, contemplation, and planning 4. While in conversations with others, they identify gaps from what they cognitively do and do not understand 3. They ask for advice and listen to others 2. They research or “gather intelligence” to determine gaps 1. Can’t provide to their customers what they want 7. Recognition is done out of necessity, in order to survive personally and professionally 6. They compare themselves and their organizations with their competitors 5. Other people tell them, such as staff, board of directors, or customers
11. 9 Pieces of Advice Research Question #5: What advice can entrepreneurs offer fellow entrepreneurs about what and how to learn during the various phases? 1. Effort (Just run!) 2. Listen (Seek the counsel of wise people) 3. Financial (Cash is king) 4. Planning and Execution (There’s a difference between a wish and a dream) 5. Diversify (Diversity is key) 7. Mistakes (We’re all going to make mistakes) 6. Sales (sales is everything) 9. Self-Efficacy (Be honest with yourself, understand that you don’t know everything) 8 . Basics (You have to start with the basics of product development and customer service