Wednesday, August 06 11:16:47
The Small Firms Association (SFA) has called for a Second Chance Entrepreneurial Support Programme to help change the culture in Ireland surrounding business failures.
SFA Assistant Director, Avine McNally said that while Ireland recognises the critical role of entrepreneurs and indigenous small businesses, there is a stigma surrounding business failure.
"We must develop a culture of respect for honest entrepreneurial endeavour even if it is not always successful."
"To develop our indigenous business structure we need to ensure that Ireland offers entrepreneurs support to turnaround a business from the brink of crisis, assist with restructuring if the business foundation is untenable and even after failure help in the establishment of a new business venture," she added.
The 2013 GEM Report shows that fear of failure among the Irish entrepreneurial adult population has risen from 35pc in 2006 to 45pc in 2013. Fear of failure in Ireland deters individuals from starting a new business, and is more prevalent among women (49pc) than it is among men (42pc).
"Even if statistics show that entrepreneurs who have experienced failure learn from their mistakes and are more successful in the future - they can nevertheless face the stigma of failure. If we are to encourage a greater number of start ups we must give entrepreneurs who have failed more support and a better chance to make a fresh start," added Ms McNally.
Many EU countries have developed Early Warning / Second Chance Programmes for small firms as they are aware that it contributes to the creation of more growth entrepreneurs, prevents insolvency, provides support in post bankruptcy situations and promotes a second chance. Most programmes are provided in a confidential manner and in some countries are free.
McNally said, "In Ireland we currently do not provide any specific early warning support or second chance programmes. A strategy moving forward should be to provide entrepreneurs with warning tools and assistance in identifying situations that could lead to insolvency or the closure of the business."