Review article
A second chance for entrepreneurs: surviving business failure and a new beginning on selected examples
Monika Musulin
; VERN' University of Applied Sciences, Zagreb, Croatia
Zrinka Gregov
; VERN' University of Applied Sciences, Zagreb, Croatia
Abstract
The most important sources of employment are small and medium-sized businesses, which, unfortunately, tend to fail, causing fear of entrepreneurship. The aim of the research was to establish the survival rate of companies in Croatia and the EU, as entrepreneurs experience business failure, and to determine the professional assistance that would be required to recover and motivate them for a second entrepreneurial chance. A survey of the literature and secondary sources on enterprises demography in the EU and the Republic of Croatia was carried out, as well as the aid measures proposed by the European Commission. The survival rate of a company five years after its establishment in the EU is, on average, about 20%, and around 18% in Croatia. The six Croatian entrepreneurs that had been interviewed survived business failure at least once and decided to try again. Along with insufficiently prepared research, inexperience and insufficient managerial knowledge, they indicated difficult economic situation and departure of partners as reasons their companies collapsed. They survived with family support and by using the Dual Process Model of Grief, which helped them reduce secondary sources of stress. As the lessons learned from the experience of failure, they mention patience, persistence, not abandoning their goals, finding effective solutions, a more positive way of thinking, spiritual growth, and a new value system, providing them with motivation for a second chance. Effective expert assistance should continue through precautionary early warning programs and legislation, which would allow the bankruptcy to be as quick and as painless as possible for honest entrepreneurs. Expert assistance should be available during and after the bankruptcy. Specifically, business-related, legal, as well as psychological and spiritual assistance, as a combination of information, education and personal counseling. It should complement the support of their families and fellow entrepreneurs who have already been in a similar situation.
Keywords
business survival rates; the survival of business failure; a second chance for an entrepreneur
Hrčak ID:
221250
URI
Publication date:
19.6.2019.
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