We know small business owners are inherently self-starters making significant personal sacrifices on behalf of their businesses, but what’s fascinating is this dimension of family, friends and community that they see as core to their success – Managing Director and Head of Small Business at Bank of America, Sharon Miller
Small businesses score their crucial goal against failure when entrepreneurs take the first right step to success by mastering the art of leveraging their social support channels.
Facts of the matter
Available literature and research work report a correlation between the role of social support channels and entrepreneurial achievement.
Some United States researchers conducted a survey in 2013 for over 250 entrepreneurs who founded small to medium-sized enterprises to measure factors associated with work and family. They found out that social support channels contributed to entrepreneurial accomplishment.
Their survey concluded that affective family-to-business enrichment, instrumental family-to-business enrichment and family-to-business support were positively related to entrepreneurial success and satisfaction for female business owners than male business owners.
They explained affective family-to-business enrichment as the transfer of positive affect, such as positive mood or happiness from the family domain to the work domain. Instrumental family-to-business enrichment meant the transfer of skills and behaviours acquired or nurtured in the family domain to the work domain. Family-to-business support referred to interpersonal support from family members.
Another 2016 Bank of America study found that 83 per cent of entrepreneurs received some forms of emotional, operational and/or financial assistance from their loved ones. It revealed that 53 per cent of business owners rely on family to serve important roles such as advisers, employees, partners or investors in their businesses.
The study showed that more than 83 per cent of entrepreneurs got loans from social support channels to fund their businesses; while 76 per cent entrepreneurs relied on personal savings as a major source of their start-up financing and subsequently became dependent on bank loans and credit cards to grow their businesses.
Small business owners also relied on social support channels for different types of support. About 57 per cent got emotional support; 29 per cent, volunteer operational help; 28 per cent, business referrals; 14 per cent, business financial support; 13 per cent, personal financial support; and 10 per cent, patronised their goods and services.
Dynamics of social support
Social support channels for entrepreneurs have been identified in this column as spouses, family members, relations, friends, associates and mentors or coaches.
These channels are the primary source of support for entrepreneurs. They are their first and closest human contacts. They are informal and their level of engagement is interpersonal. This makes the channels unstructured and entrepreneurs find it complex and difficult to engage them.
Institutional support and professional support channels are secondary and tertiary sources of support channels to the entrepreneurs. They are formal, structured and engaged through a formal process of business contract involving documentations, offer and acceptance, performance and consequence management. These provide a minimum comfort to insulate entrepreneurs from inherent risks in the engagement.
In the case of social support channels, they are personal and highly risky unless entrepreneurs carry out due diligence with help from secondary and tertiary support channels to protect their dream ventures from premature death.
First right steps
The family is first in everything an entrepreneur does. The home is also a major source of inspiration.
When there is an enabling environment at home, entrepreneurs can actualise their dreams. All stakeholders at this level of engagement should support entrepreneurs to evolve. Entrepreneurs are enigmatic people, but love and acceptance will make them flourish.
Entrepreneurs should discuss their business ideas and aspirations with their family. No business start-up commences with its pristine idea. It would have gone through stages of development before it becomes a viable brand.
Those who get stuck at this phase or eventually lose their investments often wish they had listened to their spouses’ caution, or have families who truly care enough to offer them the enabling environment. Rebel entrepreneurs are an exception here but they are in the minority.
When the social support channels know that entrepreneurs are starting up ventures, they are willing to show love and make sacrifice. They lower their expectations. They seldom make unrealistic demands because the entrepreneurs are building a future. Regular communications and mutual agreement on progress attained and exit plans make this sacrifice worth the while.
The extra mile
Social support channels offer relational, emotional and financial investment. They are always available to give their time, labour, contacts, love, money and advice. They offer constant prayers for the success of the entrepreneurs’ dream ventures.
They volunteer to work or run errands. They patronise, buy and use goods and services from the entrepreneurs. They mobilise friends and associates too. They adjust their lifestyle, sometimes radically, to make room for the entrepreneurs’ dreams.
The irrelevant minority
Those who want the entrepreneurs to succeed are far more than those who do not. The entrepreneurs should focus their energies on the former and forge ahead with their dreams.
The risks in small businesses are lowered if entrepreneurs use their positive social support channels, and creatively leverage on them to develop their ideas and start-ups.
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