THE NEW LAW FOR SPANISH ENTREPRENEURS, WHAT DO THEY THINK?

After asking entrepreneurs if they think that in Spain entrepreneurship is enhanced, the answer leaves no doubt: 92%[1] believe that in Spain entrepreneurship is enhanced little or nothing. This data is already remarkable but it gains even more significance when it is considered that in 2011 this percentage was "only" the 81.5%.

Trying to remedy this situation, the program presented by the Partido Popular in the last general election collected measures to help company owners and promote entrepreneurship. The most important measure was the new law of entrepreneurship.

Now, let us ask to entrepreneurs if they know the law and what key issues would affect.

According to the survey of the Observatory of entrepreneurial climate, 51% of self-employed and 45% of business entrepreneurs do not know or have not heard of the new law for entrepreneurs:

Source: Report of the Observatory of the entrepreneurial climate. Iniciador Foundation, http://iniciador.com/

The following table shows the key features that, in the opinion of respondents, should be regulated in the new law for entrepreneurs:

KEY  FEATURES FOR THE NEW LAW FOR ENTREPRENEURS	SELF-EMPLOYED	SMEs OWNERS
Funding aids	40	43
Expanding tax incentives	24	21
Simplifying the procedures for business creation	16	17
Assisting in training new entrepreneurs	14	9
Facilitating the recruitment of youth, women and disabled	6	10
TOTAL	100	100

With regard to improving funding aids, the most desired measures by the entrepreneurs are allowing to fully invest unemployment benefits and motivating the business angels with tax benefits.

Reducing social security contributions during the launch of the company is one of the most demanded fiscal measures by entrepreneurs: 38% of the views of respondents. Delaying the payment of VAT on receivable bills (30 %) and expanding tax incentives for small companies (28%) are examples of their demands.

In this sense, the announcements made by the government seem to confirm its intention to reduce the contributions of entrepreneurs to Social Security during the first months of life of the company, as well as delay VAT payments on receivable bills.

Certainly, they are measures that will be well received by our entrepreneurs. From the project ENTANGLE we want to applaud them because we welcome any incentive to entrepreneurship.

Miguel Delgado CETEI - Joan XXIII Foundation.

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[1] Source: Report of the Observatory of the entrepreneurial climate. Iniciador Foundation, http://iniciador.com/

 Networking

All people are networking, but some people are networking more than others. In this case we will try to find out how important networking is for entrepreneurs and try giving them useful guidance of how to build and deal with networking.

Based on our experiences, we see that networking is more important to entrepreneurs (prospective starters, independent starters, job-related starters, owner-managers, business angels, former owner-managers) than to other people, but also that the importance of networking differs according to different types of entrepreneurs. Networking is mostly important to business angels and less important to owner-managers. Furthermore, we know that networking is a powerful predictor of people being entrepreneurs or not – networking is the second most powerful predictor after competence required to start a new business and more important than other significant variables as risk-willingness.

Entrepreneurs’ networks or relations include both encouragement and criticism, but still most entrepreneurs perceive most of their relations as encouraging. Critics arrive more often when the entrepreneurs are talking to consultants or others about starting their business, compared to when they are talking to family, friends or colleagues.

Further, critics arrive more often when entrepreneurs are talking about organizing or financing the business, compared to situations where they discuss the business idea within their close circle.

Networking can be a fun and easy way to develop your life, expand your opportunities, and enhance your career. But, it can also be potentially devastating if you act rudely, insensitively, or ignore the needs and desires of others. Remember, crucial to your success is that you treat networking as an exchange of ideas, information and experience.

Some Thoughts concerning New Venture Creation Process

Technological innovation and entrepreneurship are dramatically changing the global economic landscape. These forces operate in the framework of open markets, government deregulation and privatization, together with recent concerns for the human condition, good governance, environment preservation, gender balance, and growth with equity.

Low-cost communications are also helping to make markets more transparent, allowing buyers and sellers to compare costs and prices in different countries. As the importance of locational and transport economics fades, the big winners will be technically savvy service businesses that are able to compete directly on price and quality

Free trade and open markets have encouraged the emergence of a true middle class in many industrializing countries. This new force is likely to alter the social and economic landscape in their own countries and worldwide. It constitutes both a reserve army of potential entrepreneurs as well as a large and lucrative domestic market for them. Of course, foreign multinationals also have their eye on this market, and their desire to tap it is another major force driving globalization. It can be argued that market efficiency and globalization are good, but not good enough, not for those who like the young and infirm within a family have to be given special nurturing till they become strong enough.

A torrent of technology-based goods, services and processes hits the market every week, improving the quality of lives in some ways while also creating complexity and dislocation.

Information technology - the pace of progress in information and communication technologies (ICT), microelectronics, biomedical sciences, nano-technology, robotics, new materials, space and other advanced fields continues to quicken, and in turn, to change the way we live and work. The inflation-adjusted cost of computing power, for instance, has been falling by about one third per year for the last two decades while the declining cost of communications is breaking down the natural barriers of time and space that separate markets. The number of Internet users has risen from 20 million in 1995 to 400 million in 2000, while websites have grown from 10 thousand to 20 million in the same period.  Despite this – and partly because of it – the digital divide between information-haves and have-nots is widening. 

Erasmus for Young Entrepreneurs, an inspiring way to start and develop your own business

Erasmus for Young Entrepreneurs is a cross-border exchange programme which gives new or aspiring entrepreneurs the chance to learn from experienced entrepreneurs running small businesses in other countries.

From its launch in 2010, many young Europeans have already taken this opportunity: for an example Ivan from Bulgaria who wanted to learn how to produce wine and run a company in the field and asked to be assisted by Roberto, who is a successful entrepreneurs in the field in Tuscany, Italy; or Irma, young Lithuanian passionate of film industry and willing in creating a movie production company who moved to Sweden to work with Tobias, director of a documentary company based in Stockholm.

The programme finances the travel and the staying of the young entrepreneurs for a period which lasts from one to six months. The programme functioning is supported by local contact points – Intermediary Organisations (IOs), competent in business support (e.g. Chambers of Commerce, start-up centres, incubators etc.) from Participating Countries support new entrepreneurs (NEs) and host entrepreneurs (HEs) in finding their match and in carrying out their business exchange.

The difference between the Erasmus for students is that this is really a two-sided exchange. On one hand new or potential entrepreneurs, firmly planning to set up their own business or have already started one within the last three years; on the other experienced entrepreneurs who own or manage a Small or Medium-sized Enterprise in one of the participating countries.

According to participants the Erasmus for Young entrepreneurs is a win-win collaboration. Indeed while new or potential entrepreneurs gain competences and perspectives about how to run a business from a high skilled person, they also bring their fresh entrepreneurial spirit and knowledge of their home market and culture as a source of new ideas and as a sounding board for host entrepreneurs.

Both the host and the hosted learn about foreign markets, expand business opportunities and engage in cross-border activities. Furthermore they can become part of a dynamic European business network of successful entrepreneurs and thus improve the growth potential of the company.

The Erasmus for Young Entrepreneurs programme was developed within the framework of the Small Business Act (SBA) and has the final aim of enhancing entrepreneurship, internationalisation and competitiveness of new and established micro and small enterprises within the participating countries. These are the 28 European Member States, Liechtenstein, Norway, the Former Yugoslav Republic of Macedonia, Iceland, Montenegro, Turkey, Albania, Serbia and Israel.

Find more information about the programme and the details for applying on the dedicated website.

Click HERE if you are interested in watching more successful stories. 

WHICH ARE THE MAIN OBSTACLES FOR CREATING A BUSINESS?

In the previous post (Which are the business success factors?), the entrepreneurs taught us which were the key factors for the survival of our company in the market. In addition, we pointed out the importance of knowing these factors, in order to empower them.

Today we are going to learn which obstacles the entrepreneurs have to face when creating their own business. In this case, the purpose is quite different: we have to know them to find the best possible solution for each particular situation. According to the report of the Observatory of the entrepreneurial climate, 2012, the main problems faced by an entrepreneur are:

CONCEPT	ENTREPRENEURS	SMEs
Lack of funding	30	35
Tax burdens	28	23
Uncertainty	17	20
Financing costs	4	3
Administrative Complexities	3	6
Lack of information and / or advice	1	2
All the above	14	8
Others	3	3
TOTAL	100	100

Source: Report of the Observatory of the entrepreneurial climate. Iniciador Foundation, http://iniciador.com/

 

 

Source: Report of the Observatory of the entrepreneurial climate. Iniciador Foundation, http://iniciador.com/

In these data we can see that the main problem, for both entrepreneurs and SMEs, is the lack of funding. Moreover, the concern about the cost of financing when the funding is achieved must be also noticed.

So, how can an entrepreneur get funds? The statistics collected show that the main source of funding is the financial aid that can be got from family and friends (55% for the self-employed and 48% in the case of SMEs[1]) the ICO Plan  (9%) appears in the third position -for the entrepreneurs- and even lower (the fourth position with a 6%) in the case of SMEs. It is important to note that SMEs access to private finance through banks more easily than the self-employed - 18% and 8% respectively.

In the project ENTANGLE, we believe that presenting the new funding mechanisms to the entrepreneur can alleviate part of the problem because our purpose is to help entrepreneurship.

Miguel Delgado CETEI- Joan XXIII Foundation.

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[1] Source: Report of the Observatory of the entrepreneurial climate. Iniciador Foundation, http://iniciador.com/