• Family support is one of the most influential factors in the ability to make headway
Why do some races and ethnic groups seem much better at running businesses than others? Does business acumen run in families? Is there an entrepreneurial gene that gets transmitted from one generation to the next?
Many people believe that once they are given enough resources, they can easily establish and successfully run a business. So, they perceive that the major obstacle to their entrepreneurial activity is the lack of funding. Though the lack of property that can be used as security for loans prevents many aspiring entrepreneurs from starting their own businesses, this is only a part of the problem.
Gordon Grigg, a business strategist, explains why family plays an important role in the success of entrepreneurs. The family acts as the first place of learning, whose teachings and constant support help an entrepreneur become successful. A child growing up in a business-oriented family is likely to get into business at some point in his or her life.
“Emotional assistance is the biggest support that the family can give to the entrepreneurs,” Grigg says. “Emotional assistance from family can ease the workload they have and also the comforting words of loved ones can do wonders for the exhausted spirit of the entrepreneur.”
Family is among the leading sources of financial assistance to entrepreneurs. Older family members with experience doing business are an accessible source of free advice. In addition, family does provide unpaid labour, which greatly helps in lowering the costs of running the business. Family is an excellent avenue for referrals, that is, recommending the business to potential customers.
“Getting business referrals from someone inside your family can help you greatly to succeed and can also give you a huge advantage to penetrate the target market,” Grigg says.
Apart from the business idea, an entrepreneur needs specific skills and knowledge to operate his or her enterprise on a daily basis. This aspect of entrepreneurial activity tends to be widely ignored. Entrepreneurship is a dynamic process, which requires certain skills and knowledge. It is both a science and an art.
Due to the realities of unemployment, lots of young people are starting businesses as a means of livelihood, but they often come from family backgrounds lacking commercial experience. Claudia Pompa, a research officer at the Overseas Development Institute (ODI), notes that many youth programmes focus on entrepreneurship without taking into account the role of the family and community.
“Family support to start and operate a business is one of the most influential factors in the ability of entrepreneurs to make headway, especially for rural youth. Finding ways to engage and gain support from families and communities is vital," Pompa wrote in a report for ODI.
Youth coming from non-entrepreneurial families should be connected to experienced mentors who can examine their business plans and ideas. Mentors connect mentees to larger networks, act as role models and show various approaches to success.
“For mentorship to make a difference, mentors and youth entrepreneurs must have strong relationships based on clearly defined goals and obligations,” Pompa says.