Why small business owners must invest in themselves
27 June 2018
Published by IIE
Article originally featured on The Sydney Morning Herald, written by Tony Featherstone.
When did you last invest in yourself? That is, spent your own money on a pricey part-time university, TAFE or executive-education course, to develop new skills.
Too many small business owners have not spent a cent on their professional development since leaving school or uni. Others do a few days of token continuing professional development (CPD) training each year to maintain membership of a professional body.
The economy is the loser. Helping Australian small business become 1 per cent more innovative would create far more jobs and wealth than encouraging a larger start-up community. High-growth start-ups are important, but the big prize is small business.
Imagine we could help tens of thousands of small businesses that oscillate between “survival” and “growth” get to the “take-off” phase. It begins with small business owners developing skills, through professional development programs, to seize opportunity.
Never discount small business’ potential to develop entrepreneurs. Yes, small business and entrepreneurship are different things: the former is usually about “lifestyle” businesses that provide a job; the latter is about high-growth ventures that want to scale opportunity.
Still, many successful entrepreneurs come via small business. They launch a business, realise they have a good concept, launch another and become an “accidental entrepreneur”. Not every budding entrepreneur is a twenty-something, inner-city tech innovator.
We need the right incentives and education programs to encourage small business owners to invest in their training. We need better linkages between universities, which have traditionally focused on big-business training needs, and small business.
Collaboration must extend to government and industry. More academic research on Australian small business is needed. Local government can play a bigger role because the future of “smart cities” will be based on communities of high-growth ventures in the suburbs.
Encouraging small business owners to invest in themselves won’t be easy. Unlike employees in corporations, owners of small businesses do not have the luxury of paid training leave or employers partially or fully funding study costs.
Every dollar of tuition comes out of their pocket. Every minute in a university lecture takes owners away from work and family. Most founders do not need another degree (or one at all) to move up the ladder, get their dream job or network with peers.
Moreover, small business owners may not see enough return to warrant study investment. They want hands-on advice to help their business today, not academic theory, assignments and exams. They want to learn from successful peers, not career academics.
Some entrepreneurs I know attend the “university on wheels”; they listen to audio books from successful entrepreneurs while driving to client meetings. And they devour entrepreneurship biographies at night. Although no formal qualification is earned, these books give them skills and confidence – and are hugely valuable.
The education sector has mostly missed this opportunity to help small business owners transition to entrepreneurship. Master of Business Administration programs are still slanted towards company managers, although more MBAs are upping their entrepreneurship focus.
Vocational educational providers, such as TAFEs, provide courses that are often about the “nuts and bolts” of running a small business rather than turning it into a high-growth venture. TAFEs should have a central role in developing a new generation of Australian entrepreneurs via the small business sector.
Then there’s university entrepreneurship courses. Many unis have launched undergraduate or postgraduate entrepreneurship programs or embedded these subjects into other degrees. It’s good stuff, but again targeted at those launching start-ups.
Business accelerator programs that provide intensive education, mentorship and potential access to investment partly bridge this gap. But they often focus on established start-ups rather than family companies or other small businesses that have been around for years.
Universities should lift their focus on small business teaching. Flinders University’s New Venture Institute, for example, is helping small business owners through large-scale networking events and state-of-the-art entrepreneurship teaching.
The potential is universities and vocational education providers collaborating with state and local governments, the small business sector and accelerator/incubator programs, to develop short-form entrepreneurship programs and ongoing education for owners.
It must become easier and cheaper for small business owners to complete a short accelerator program spread over a year that supercharges their business strategy. Then, say, embark on a three-day entrepreneurship workshop each year for continuing professional development.
There should be formal recognition for this training, so that owners have something to fall back on if the venture fails and to promote to other stakeholders, such as clients or banks.
Better still, the federal government could consider financial incentives for small business owners to complete this form of training. Stakeholders, such as banks or professional services firms, could encourage small business clients to attend entrepreneurship programs.
Industry might even co-invest in university education programs for small business, an idea I flagged in last week’s blog. Accounting firm Pitcher Partners, for example, had the foresight to launch the International Institute of Entrepreneurship (now in conjunction with Swinburne University) and offer it to clients and other firms.
Whatever form this education takes, it’s vital that owners see the benefits of investing in themselves and their venture through education. The pay-off to the community will be much larger than helping a small group of start-up hipsters develop their next smartphone app.
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