DanubeChance2.0 Embracing failure to facilitate second-chance entrepreneurship in the Danube region

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Tailor-made educational program for second-chance entrepreneurs was developed by a consortium of professional capacity building institutions from 11 countries of Central and Eastern Europe.

We call them second-chance entrepreneurs, meaning entrepreneurs who have to turn around their business focus or approach to managing their business in order to survive the crisis and become more resilient to the market volatility.

 

MODULE 1: WHY START OVER? OVERCOMING FEARS AND HEADING TOWARDS SUCCESS!

Recognizing the importance of life-long learning, developing entrepreneurial skills and competencies are inevitable to the success, to reach entrepreneurs’ dream come true. The aim of this module is to encourage participants to restart their business, learn from previous mistakes/problems, and change their mindset to prevent the same mistakes/ problems happening again. The competencies of successful entrepreneurs and the checklist of a successful re-start can be collected together in the framework of this module.

Participants have the opportunity to connect, to think together, and to learn from each other.  In addition, they can do brainstorming together about each other’s business ideas and give true opinions in a safe environment.

To commercialize a new-old business idea always involves great risks.  Re-starters have to be great risk takers and change makers – that is why filling out the Viability Chart before the final decision of the start is important. With the help of the Viability, Chart entrepreneurs can see, how viable their business idea is. Answering the questions of the chart you have the chance to get a picture of how marketable, competitive, ready for smooth operation, and profitable is your business idea.

 

  MODULE 2: ACCESS TO FINANCE FOR THOSE WITH FAILED BUSINESS PLAN

The goal of the “Access to finance for those with failed business plans” module is to increase the likelihood of getting financing for a business. According to CBInsight, the 2nd most common reason for company failure (right after “no market need”) is “running out of cash”. Getting funding to start a business, or keep it running is one of the main functions of a business owner.

As financial literacy is usually not part of the general curriculum of the education system, business founders usually are less confident about financial tools, expressions. Business owners with failed ventures have a bit of anxiety about the topic, as they have already faced financial failure. The module aims to increase the likelihood of getting financing for a business by providing knowledge (e.g. financial concepts, accessible funding instruments, mental frameworks) and tools (e.g. templates).

At the end of the module, entrepreneurs will be able to find new ways to fund their business like grants, accelerators, crowdfunding, angel investors, improve the fundability of their business, pitching their business to different stakeholders involved, overcome a “no” when seeking funding and use financial concepts like cash flow, financial metrics (like LTV, CAC) with confidence.

 

  MODULE 3: BUSINESS PLANNING WITH BENEFITS OF PAST EXPERIENCE

The engine of a business is a strategy. Business planning, market landscaping, and getting to know the costumers are essential for an entrepreneur. That is why this module’s focus is on business planning. Participants can learn how to think in a system, they can start to create their business plan with the help of Business Model Canvas and recognize their strengths, weaknesses, opportunities, and threats.

Business Model Canvas is a strategic management and entrepreneurial tool. It allows entrepreneurs to describe, design, challenge, invent, and pivot their business model. It is a visual chart with various elements that describe an enterprise’s or product's value proposition, infrastructure, customers, and finances. Entrepreneurs have to think about and answer several questions regarding customers, customer relationships, value proposition, key activities, key partners, costs, key resources, channels, and revenue.

Entrepreneurs who take part in this module have the chance to learn more about successful business management based on past experiences.

 

 MODULE 4: PRACTICAL HINTS FOR ESTABLISHING ANOTHER BUSINESS

Building a business is a huge topic – no wonder entrepreneurs never stop learning and training themselves. The goal of this module is to make participants go through a journey, where they (re)establish their business with the help of conscious processes and a set of tools based on best-practices. During this journey, the entrepreneurs (re)define the core values and pillars of their business solution using efficient methods.

The module’s aim is to go to a very practical level. By the end of the workshop participants can add calendar entries, implement their own documents, and define the short-term strategy of their company using the templates provided. The goal is to go bottom-up: try a tool, discuss the feelings, and understand the meta (theoretical) level after. With this approach, there is a better chance that they will remember what to do next time when they encounter a problem.

 

 MODULE 5:  HOW TO KEEP ENTREPRENEURS HEALTHY AND ALIVE

This education module is for policymakers and financial institutions. It focuses on informing policymakers about second-chance entrepreneurs as a possible target group for SME support policies. We present possible mechanisms, which can be used to prevent entrepreneurs from failing, help to smooth bankruptcy procedures, and facilitating the return of failed entrepreneurs back to business.

Early Warning Mechanism can be presented to interested stakeholders as a general framework of the second-chance entrepreneurship ecosystem on the national level. Each module participants will prepare his own action plan reflecting his participation in delivering key elements of the Early Warning Mechanism on the national, sectoral, or regional level.

Depending on the available time, a more detailed discussion can be done around practical instruments of Early Warning Mechanism, like:

  • Establishing the screening and diagnostic system;
  • Filling up a network with human resources;
  • Training of consultants;
  • Recruitment and training of pro bono mentors;
  • Selection and training of legal advisors;
  • Marketing and communication activity;
  • Supervision and project management

 

  MODULE 6: LEGISLATION

The module on legislation is about mapping and overview of legal framework regarding restructuring, bankruptcy, second-chance entrepreneurship, and possibilities for early warning. It also includes legal conditions for obtaining debt relief, legal conditions, and procedures for reconstruction of the company with the involvement of the court system as well as in resolving issues in out of court mediation process. As part of educational material and additional reading, it includes relevant legal texts, texts related to second chance instruments, policy documents, decisions, doctrine and research reports restructuring, bankruptcy, and second-chance entrepreneurship map at the national and European level in order to develop a descriptive-evaluative and comparative overview. Module provides a user-friendly systematic practical guidance on legal opportunities for different phases of difficulties in doing business, as well as the ones that are considering restarting.

In addition, one part of the course will refer to the process of company liquidation in terms of formal conditions, necessary actions, and existing procedures. This topic is addressed through practical examples/case studies that will show the advantage and disadvantages of the liquidation process, as well as possible solutions and options within this process.

The intention of the course related to legal issues is to introduce participants to all legal actions that can be applied to a certain point of facing difficulties. Participants will also learn what they can expect because of legal actions taken in order to make their business more efficient and less susceptible to problems that can cause bankruptcy and business failure.

 

  MODULE 7: FINANCIAL MANAGEMENT

Financial management is one of the most important knowledge within any business to be able to manage its finances efficiently. Making financial decisions and planning means planning, organizing, directing, and controlling the different financial activities such as procurement and utilization of funds of the business. It means applying general management principles to the financial resources of the enterprise.

The financial landscape is very dynamic with a global marketplace with more and more participants and many more factors that can influence it. A variety of choices of financial instruments can create confusion for the business owners especially for those not having professional finance managers. Therefore, financial literacy is crucial to help a business to obtain adequate income, while avoiding high levels of debt that might result in bankruptcy. Financial literacy includes understanding financial, credit, and debt management and is important knowledge necessary to make financially responsible decisions. Business finance includes financial management, planning, controlling, reporting, analyzing and decision making; financial and funding planning, the meaning of financial reports and their value; sources of funding: what is possible, what is not, how to choose the right financing and really benefit from it, bank perspective on different situation. Also, it includes advice on how to approach financing business in restructuring procedures and creditors' perspective on different situation. 

 

 MODULE 8: COMPANY RESOURCE MANAGEMENT

Module on Company resource management is about the creation of a business strategy. What makes one business successful is a noticeable and clear business strategy. If you don’t know what you are going to do in your business or how you will do it, your business will not survive for long in today’s competitive marketplace.  Entrepreneurs must be clear about how they are going to manage their business, what are their strategic objectives, and how they will achieve them. This involves strategic planning, the use of planning and analysis tools, transferring this analysis into a structured, meaningful, and realistic business plan. The course focuses on components of creating a business strategy and producing a viable business plan and involves analysis, synthesis, and structured business plan drafting.

In addition, the course will be focused on improving customer relationship management (CRM) as a business strategy aimed at improving customer service and encompassing all communications and transactions with customers. The aim of this approach is to increase client satisfaction which results in higher rates of customers' retention, an increasing number of new customers, and, consequently, sustainable long-term growth and development. The course also covers activities aimed at acquiring new clients, understanding customer needs, and designing alternative approaches and acquisition strategies for different customer segments. In addition, the course covers the next phase of the CRM approach through the introduction of a new segment: products, their characteristics, their benefits, and claims about the benefits that are delivered and constructed from the benefits and used during the selling process. These topics will be addressed through a series of practical exercises, which can be implemented in the day to day operations.

 

 MODULE 9: NEGOTIATION AND COMMUNICATION SKILLS

Communication skills are important in every aspect of life, but it’s especially crucial in the workplace. Whether a company is just starting or is further along in the development stage, there are specific business communication skills necessary for success. Communication can help in developing business to meet true potential and it has to be adapted to different audiences with customers, financial institutions, etc. Effective communication gives the ability to negotiate successfully and is essential to success in all your interactions with other people.

In order for SME managers to be successful in a business meeting, not only professional skills are needed, but also negotiation skills and preparedness are required. Besides having ongoing business communication that includes negotiations on a daily basis, not only with their customers and suppliers, various offices, and banks, entrepreneurs are daily communicating with their company staff. All of these require good negotiation skills, although these negotiations are often thought of as "conversations", and we are not aware that they can better represent their company and their personal and business interests with more thoughtful preparation.

 

 MODULE 10: MOTIVATION OF PEOPLE AROUND YOU

Dualism of importance to create and sustain an environment of achievement and challenge with maintaining a good workforce, employee satisfaction, and creating a climate of trust within their company is a constant struggle of any working surroundings. An additional challenge is in time when the working environment is facing difficulties that require changes. Different changes require different management to be successful. Every change, no matter how small it is, affects people and how they do their daily job. A significant number of individuals can be slow in adoption and low in utilization, but even bigger risks are associated with people not becoming engaged or resisting the change. Outlining characteristics of the change and its risks and potential resistance is of most importance.

There is a need in the workplace and to encourage higher performance beyond recognition programs and financial incentives but having satisfied workers is a challenge. Motivate the team by having inspirational conversations, providing clear direction, offering tools for improvement, and guiding our most challenging employees to positive outcomes will measurably benefit the entire organization. Effective communication, a motivated team, and continuous situation-based leadership are essential to running a successful business.

The aim of the training is to develop the leadership skills of the participants and thus increase the performance of the whole organization and the satisfaction of the employees. With this in mind, we designed the training material.

Programme co-funded by European Union funds (ERDF, IPA, ENI)