MODULE 1: REFLECT

Why start over?

In this module, you will: Determine why now is

a good time to start again!

Learn about key trends in a new era in entrepreneurship

Get to know the characteristics of successful entrepreneurs

Investigate what it takes to succeed in business

Review Incentives available to you that support Second Chance Entrepreneurship

Module 1 SUMMARY

New era of entrepreneurship brings new scope and new possibilities. The EU has actually declared it wants more “second chance” entrepreneurs .

The Commission said it wanted to showcase the “true grit” of people who honestly fail and then pick themselves up and relaunch businesses.

In 2011, Antonio Tajani, vice-president of the European Commission, said: “Entrepreneurs who take a second plunge at launching a new venture after having gone through a bankruptcy are a fundamental source of company and job creation for the European economy.”

Why now is a good time to restart?

Module 1 SUMMARY

You’ve already came so far, learned so much and you’re here taking this course – it’s time to scratch the entrepreneurship itch again! Businesses that are started by an entrepreneur that has learned from a previous failure are more successful in terms of turnover and employment than new start-ups. They also have a much higher survival rate than a company launched by a new entrepreneur.

The higher tolerance of failure in the US is frequently cited as one of the explanations for its higher levels of entrepreneurial activity.

Why now is a good time to restart?

Some Statistics on Restarters!

You are not alone. 50% of enterprises don't survive the first 5 years and bankruptcies account for 15% of business closures, affecting 700,000 SMEs per year and 2.8 million jobs (A Second Chance for entrepreneurs, Expert Group Report, 2011/Small Business Act 2008).

The financial crisis caused a peak in business failure and Ireland, Netherlands, Spain & Bulgaria were particularly hard hit: corporate insolvencies more than doubled in Ireland between 2008-12, and rose 60% in Netherlands and 84% in Bulgaria, compared to 20% across Europe (Bankruptcy and second chance for honest bankrupt entrepreneurs, ECORYS, 2014).

Some statistics on Restarters!

While only 4-6% of bankruptcies in the EU are fraudulent, public opinion makes a strong link between business failure and fraud. Many honest bankrupts feel discouraged to re-start due to the stigma and difficulties or discrimination faced after a bankruptcy.

Fear of failure among the Irish entrepreneurial adult population has risen from 35% to 45% (2006-13), and is more prevalent among women (49%) than it is among men (42%).(2013 GEM Report.)

Some Statistics on Restarters!

In 2002, 15 years ago, Joachim Wagner became interested in the subject of entrepreneurial restarts in Germany. In his study he uncovered some interesting statistics which we claim are still relevant today… Mindset:The majority (59%) of Second Chance Entrepreneurs are not afraid

to fail! Unemployment: If you are unemployed there is an increased chance you will

take a second chance at entrepreneurship Recovery Time: Average timespan between close of last business to start of

new business is between 6 -7 years Inspiration/Motivation: 80% of the restarters have personal contacts with a

young entrepreneur and take inspiration from same

A new era in entrepreneurship, irreverent approach to business failures

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A New Era in Entrepreneurship

Entrepreneurs are the lifeblood of any expanding economy, generating jobs, introducing new products and services, and creating jobs for ourselves and others. Entrepreneurship is fast emerging as a transformational megatrend of the 21st century given its capacity to reshape economies and industries throughout the world.

Some key trends in entrepreneurship include:• Increase in Supportive Environments for Entrepreneurship• New Approaches to Financing Entrepreneurship• Rise of the Minority Entrepreneurs –

older/young/immigrants/women• Increase in new Entrepreneurship Models – Slash Careers, Portfolio

Careers, Social Entrepreneurship

A new era in entrepreneurship, an irreverent approach to business failures

Fuckup Nights is a global movement founded in Mexico but now spanning 200 cities, 70+ countries and 25+ different languages where stories of failed businesses and projects are shared. In 2014,they founded The Failure Institute as the research arm. www.fuckupnights.com

DOWNLOAD THE FUCKUP BOOKhttp://fuckupnights.com/wp-content/uploads/2015/08/Fuckup-Book-english-OK-FUN.pdf

Key trends in a new era in entrepreneurship – Supportive Environments

Supportive environments are increasingly essential to successful entrepreneurship and are steadily evolving throughout the world. If we want to restart as an entrepreneur, we need to know we are supported.

The ideal entrepreneurial environment comprises five pillars:

1. Access to funding

2. Entrepreneurial culture (and new initiatives such as FuckUp Nights network)

3. Supportive regulatory and tax regimes

4. Educational systems that support entrepreneurial mindsets (e.g this course); and

5. A coordinated approach that links the public, private and voluntary sectors.

Key trends in a new era in entrepreneurship … New Financing Options that may not have been in place the first time you started

Examples - Micro financing, crowdfunding and credit guarantee schemes are emerging in a range of financing strategies to provide capital to entrepreneurs.

We look at these opportunities in detail in Module 6.

Key trends in a new era in entrepreneurship – Frugal InnovationFrugal innovation responds to limitations in resources, whether financial, material or institutional, and turns these constraints into an advantage. Through minimising resources in development,production and delivery, frugal innovation results indramatically lower–cost products and services.

Key trends in a new era in entrepreneurship - Rise of the Older Entrepreneur

With an ageing EU population, we are seeing a growing trend in older entrepreneurs. The financial crash meant that self employment was born of necessity for many

The rise of the older entrepreneurs is referred to as the ‘Biggest Employment Trend in the Past 100 Years’ by US based Aging Planet

In the UK the level of self-employment in the 50-plus age-group is about 1 in 5, considerably higher than the levels across all ages.

Key trends in a new era in entrepreneurship - Rise of Female Entrepreneurs

Women across the world are launching and operating new enterprises at a faster pace than ever

Interestingly women are nearly one-third more likely to start businesses out of necessity than men

http://www.gemconsortium.org/report/49480

Video Case StudySandra Walsh Canopi Creative LTD

Watch our RESTART interview with Sandra – visit https://youtu.be/wvZEESg9xVA

Sandra Walsh: Canopi Creative Ltd

A flair for fashion helped former boutique owner overcome collapse of business How ? A deep insight into the fashion business, a straight-up character and the ability to leave certain aspects of her business to the experts brought entrepreneur and designer Sandra Walsh towards the success of her second business, Canopi.

Canopi is arm-covering garment which can be worn under sleeveless dresses, eliminating the need for a cardigan or jacket to hide the dreaded “bingo wings”.

Sandra went from 0 to 50,000 units sold in two years. Her story is truly inspirational to other ‘restarters’. Sandra owned two Boutiques in Dublin, Ireland which were successful for 12 of the 14 years she was in business. The main reason for the business’s downfall was the decline in footfall due to the recession. Sandra found she didn’t know who she was buying for – “I had no regular customers anymore.”

The failure of the business hit her hard but Sandra chose to look upon her successful years in business positively. Within six months of her boutiques closing, Walsh had her first Canopi prototype manufactured in Ireland.

Having moved on from her first venture, she has learned:- • to really listen in business• to take things on board and yet at the same time, not to take things

too personally.

“It’s about being true to yourself, being confident in your product and having 100% conviction.”

Sandra Walsh: Canopi Creative Ltd

Key trends in a new era in entrepreneurship - Social Entrepreneurship

Social entrepreneurship focuses on collective good and draws on business techniques and experiences to find solutions to social problems.

According to the 2016 Global Entrepreneurship Monitor’s (GEM) Report, social entrepreneurship is on the rise in both developed and developing nations, with many entrepreneurs proving that business can be a path to social good as well as profit.

http://blog.msc-entrepreneurship.com/social-entrepreneurship-rise/

Social entrepreneurs Ashoka is the largest global

network of leading social entrepreneurs/ changemakers. There are over 3,000 Ashoka Fellows working across 82 countries.

Exercise :CHECK OUT https://www.ashoka.org/ for great examples of social innovation concepts

Case Study – Female Led, Social Enterprise

FoodCloud was founded by two young female social entrepreneurs in Ireland in 2013 and has grown to work with over 400 business across Ireland and the UK.

http://food.cloud/

Key trends in a new era in entrepreneurship – Immigrant entrepreneurs & a new wave of globalization

Entrepreneurship is often a natural career choice among migrants seeking to integrate in an economic independent way

Key trends in a new era in entrepreneurship - Slash Careers

Slash careers are part of a pivotal change in how we work/create. So-called “slashers,” (sounds violent at first), simply describes anybody who would tend to have multiple income sources listed on their business card, separated by a slash character……. / / / / / /

An example: food producer/fitness instructor/food writer

Key trends in a new era in entrepreneurship - Slash Careers

A Slash career person has a mixed professional identity. In the current economic climate, slash careers are part of a pivotal change in how we work. Can be a fulfilling work-life blend, not to mention a safety net of several income sources

Slash careers are becoming much more commonplace, stemming from the growing desire of many people to diversify their income streams, as well as find a way to exercise multiple passions in a professional context

Entrepreneurship Insights

Two-thirds of adults, on average, think entrepreneurship is a good career choice

42% of working-age adults see good opportunities around them for starting a business, but a little more than one-third of them would be constrained from starting a business due to fear of failure.

A lack of profits or finance explain half or more of entrepreneurial exits

http://www.gemconsortium.org/report/49480www.youtube.com/watch?v=iwl-Pe0FbSg

Spotlight on the UK – 2020 “Peak Entrepreneur”

Experts suggest the UK’s start-up surge may only be just getting going and that around 2020 the UK will be hitting “peak entrepreneur”.

The fundamental reasons: 1. demographics: the “millennial generation” is about to reach the age for launching its own ventures. The baby boomers are finding a second wind as entrepreneurs.

2. Lots of bright and ambitious immigrants starting new businessesDaily Telegraph

Rejection is not always the end..

Rejection is not always the end..

UK Dragons Den rejects who made it big!'Cup-a-wine' success after Dragon rejection (June 2010). James Nash is having the last laugh as Marks & Spencer struggle to keep up with demand for his 'cup-a-wine' concept - which was rejected by Dragons' Den.

Dragons' Den reject lands deal with Boots (August 2008). Shaun Pulfrey's Tangle Teezer was rejected on the BBC show. Now he's struck a deal to stock the £9.99 device in 600 Boots stores and hopes to push turnover to £1.5m next year.

Read more: http://www.thisismoney.co.uk/money/article-1640358/Dragons-Den-The-rejects-that-got-rich.html#ixzz4XNWVIBIX

Rachel Lowe - She Who Dares

Rachel Lowe has had an extraordinary rollercoaster ride. Nine years ago, while working as a taxi driver, studying for a law degree, and bringing up two young children, she had the idea for a board game, Destination, and set up her own company.

Looking for funding, she appeared on BBC’s Dragons’ Den and was ’ripped to pieces’; nevertheless, she launched Destination London in Hamley’s in 2004 and it became the store’s top-selling game, outselling even Monopoly and Twister.

http://www.businessmag.co.uk/entrepreneur/rachel-lowe-she-who-dares/

Rachel Lowe - She Who Dares

But in 2009, having spent six years building her business, Lowe lost everything: the company went into administration, she was declared bankrupt, her home was repossessed, and she had a nervous breakdown. In 2012, Lowe bounced back, regaining her Destination brand, as well as launching a new fashion brand, She Who Dares.

http://www.shewhodares.net/

http://www.businessmag.co.uk/entrepreneur/rachel-lowe-she-who-dares/

Rachel Lowe - She Who Dares

“I would say my greatest achievement is pulling myself up from the gutter, getting back out there, facing all of my fears and having another go. This past two years has taken me more guts and strength than anything I did six years ago, because I’ve had to come back in knowledge of everything that could go wrong.”Click to watch or follow link:

https://youtu.be/mQdF60rGJYQ

The hidden opportunity behind every rejection | Jia Jiang | TEDx

Story of Jia an entrepreneur, who’s business failed and led him to an exploration of rejection.

Rejection became the catalyst that set him towards his true calling. To conquer the fear of rejection, Jia embarked on a personal quest and started a blog to face 100 Days of Rejection. His blog reveals that people are much kinder than we imagine. He discovered that rejection can be much less painful than we believe, and that it is the fear of rejection that is much more destructive than we know.

Click to watch or follow link: www.youtube.com/watch?v=iwl-Pe0FbSg

Get to know the characteristics of successful entrepreneurs

Characteristics of Successful Entrepreneurs

When you look at start-ups that eventually made it big, you notice similarities about the businesses: for example, their approach, team, or timing.

But even the greatest ideas can struggle to gain momentum without a resilient and capable leader at their helm. Similarly, a great entrepreneur can take an idea with moderate potential and transform it into something legendary.

There are certain traits that great entrepreneurs share, we will look at 5!

Source: www.audiencebloom.com/the-modern-entrepreneur/

Characteristics of Successful Entrepreneurs – 1. RESILIENCE Entrepreneurship is an bumpy,

uneven road full of constant challenges, many of which you’ll never see coming. You’ll face complex financial problems, decision based dilemmas, long hours, sudden changes, and more!

These challenges, while difficult to face, are a natural part of being an entrepreneur. How you face those challenges can greatly impact your business and its success.

Triumphant entrepreneurs have a level of resilience, which allows them to face an almost constant slew of challenges without ever weakening their resolve

Characteristics of Successful Entrepreneurs – 2. AGILITY

Startups by their nature are nimble. Agile entrepreneurs are able to treat every problem they encounter quickly and adeptly, without taking too long to address them. This agility allows entrepreneurs to remain proactive and vigilant, preventing small problems from becoming major ones.

On a larger scale, this ability also allows entrepreneurs to constantly change, and therefore improve, their businesses. With new technologies, new resources, and new trends emerging daily, the most successful businesses are ones who are able to adapt and grow with the times. Remaining agile in a position of leadership enables this course of growth.

Characteristics of Successful Entrepreneurs – 3. PATIENCE

Overnight entrepreneurial success is very, very rare. The reality is that most success only comes after years of hard, committed effort. Successful entrepreneurs realize that all great things take time, and aren’t impeded when their great ideas don’t take off immediately.

Patience also goes a long way when building the infrastructure of your company. For example, great entrepreneurs want to build the best team, not one pieced together with the first candidates that cross their paths.

Characteristics of Successful Entrepreneurs – 4. TRUST

Entrepreneurs often require help to get their startup off the ground. This is where trust comes in.

Entrepreneurs need to trust their support networks to accomplish their work without interference. Cultivating a culture of trust with workers, partners, and investors is important for every entrepreneur. This can be done by maintaining constant, transparent, open lines of communication and a closer sense of collaboration within the team.

Characteristics of Successful Entrepreneurs – 5. PASSION

Finally, it’s impossible to be a successful entrepreneur if you aren’t passionate about your work.

Are you excited to go to work every day? Without passion, your productivity will suffer, but more importantly, you’ll never be happy with where you are. Only when you’re truly passionate about your work will you be able to find the success you strive for.

Investigate what it takes to succeed as a restarter in business

What does it take to succeed in business?Adapted from Tom Rich http://diybiztek.com/author/tom-rich/

There are several common features and traits that successful entrepreneurs share. More than likely though, you already have some of these traits or can refocus your new business approach to take them into account:- You Are Fearless – but you feel fear. You have enough confidence

in your convictions to work through the fear and do it anyway. You Make Actionable Plans – An entrepreneur doesn’t just make

plans – they make plans that are actionable. Without action, nothing becomes reality.

What does it take to succeed in business?

You Understand Cash Flow – without adequate cash flow a business that earns money can still fail. Cash flow management is a critical element in running a successful business. Work hard to understand cash flow so that you can be truly successful.

You Know It’s Not About You – it is about the customer who is always first. You must learn to separate your personal preferences from your customers’ wants.

You Aren’t Afraid to Self-Promote – you must let go of shyness and promote yourself. Become the expert in your niche, be proud of what you have created and share that pride through every promotional opportunity you can take advantage of.

What does it take to succeed in business?

You Act Decisively – Entrepreneurs are doers, not just idea people. You know how to put ideas into action and find ways to overcome obstacles.

You Understand That Change is Inevitable (and good) – You realize that every business that exists today will not be here tomorrow. Think about the technology from the past that has been killed by new technologies.

You Listen – One skill trait that an entrepreneur has that really helps them succeed is the ability listen to what their audience is saying.

What does it take to succeed in business?

You Keep Learning – Knowing how to research and evaluate the market, your customers and competitors is a very important skill that you have honed. It will help you avoid making errors and keep you sharp

You Network Smart – Successful entrepreneurs know how to pick and choose the right events and the right way to network with the right people. You know it’s about building relationships with the right people.

What does it take to succeed in business?

Bill Gross has founded a lot of startups, and incubated many others — and he got curious about why some succeeded and others failed. So he gathered data from hundreds of companies, his own and other people's, and ranked each company on five key factors. He found one factor that stands out from the others — and surprised even him (watch the video to find out!)

WATCHwww.youtube.com/watch?v=bNpx7gpSqbY

Key Learning Points from Bill

The factors that accounted the most for success and failure across all of these companies were: 1. Timing. Timing accounted for 42% of the difference between success

and failure2. Team and execution3. The idea, the differentiability of the idea, the uniqueness of the idea4. Business model -you can start out without a business model and add

one later if your customers are demanding what you're creating. 5. Funding, if your business is underfunded at first but you're gaining

traction, especially in today's age, it's easier to get funding.

Bill Gross believes that startups can change the world and make the world a better place.

Before you begin again, take some time for reflection

Evaluate why the business failed. Write down everything that went well, and everything that didn’t. Think about what you can do differently next time if you are faced with a similar situation. How can you handle it better? How can you improve in your problem-solving? There is nothing wrong with making a mistake. The key is to learn from those past mistakes so you don’t repeat them. Take the knowledge you’ve gained from your experience and use it to build your next venture.

Before you begin again, take some time for reflectionSeparate your identity from your business. A true entrepreneur is resilient. They are able to bounce back and recover quickly after a failure or misstep in business. You didn’t fail; the business did. Although you do have to reflect and assess why it happened, it’s important to not lose confidence in yourself. A failed business does not define who you are as an entrepreneur.

Before you begin again, take some time for reflection

Assess your attitude. In order to succeed, you will need determination and a positive attitude. Many top entrepreneurs share a key trait: optimism.

Self Assessment Exercise – Visit Module 2

Review Incentives available to you that support Second Chance Entrepreneurship

Incentives that support Second Chance Entrepreneurship

The Small Business Act for Europe (SBA) is the EU’s flagship policy initiative to support small and medium-sized enterprises (SMEs). It comprises a set of policy measures organised around 10 principles, one of whom is second chance entrepreneurship.

Each year, it publishes an annual fact sheet per country

e.g.2016 Ireland - https://www.djei.ie/en/Publications/Publication-files/2016-SBA-Fact-Sheet.pdf

The Context for Second Chance Entrepreneurs, Ireland

The Financial Context

The Bankruptcy (Amendment) Act 2015 • Reduced the normal duration of bankruptcy from 3 years to 1 year• Reduced the normal maximum duration of orders requiring payments to creditors from

any income of the bankrupt person from 5 years to 3 years.• Extended the bankruptcy term (up to 15 years in serious cases) and the duration of

payments to creditors, if the bankrupt person tries to hide income or assets or does not cooperate in the bankruptcy process.

• Stipulated that bankrupt people will re-gain ownership of their home, subject to any mortgage, after 3 years, if steps have not been taken to sell it for the benefit of creditors within that period.

• Introduced some key reforms to modernise and streamline bankruptcy procedures

All steps in the right direction.

Incentives that support Second Chance Entrepreneurship

Financial Support

While SMEs still find it hard to get credit, the situation is improving. The proportion of SMEs that reported rejected loan applications, access to public support instruments or the willingness of lenders to provide loans is at its lowest since 2008.

IMPORTANTLY The Credit Guarantee Amendment Act was passed into law in 2016. It • Opened up the Credit Guarantee Scheme( introduced in 2012) to a greater variety of

lenders to make it more attractive to SMEs. • It created a better balance of risk between the state and finance providers to make

credit more attractive to lenders. • The Strategic Banking Corporation of Ireland (SBCI) with counter guarantees will

further improve the SBCI’s capabilities of developing targeted risk-sharing measures with commercial banks.

Incentives that support Second Chance Entrepreneurship

Entrepreneurial Support

In Ireland, we are somewhat fortunate to have a positive funding environment with opportunities for all strands of entrepreneurship. In fact, there are over 170 different Government supports for Irish start-ups and small businesses.

A good resource – https://www.supportingsmes.ie/BusinessDetails.aspx

This Online Guide is to help Irish start-ups and small businesses navigate the range of Government supports to see which applies to your circumstances

As outlined there are New Financing Options that may not have been in place the first time you started

Examples - Micro financing, crowdfunding and credit guarantee schemes are emerging in a range of financing strategies to provide capital to entrepreneurs.

We look at these opportunities in detail in Module 6.