As businesses the entrepreneurs face a lot of turbulence and challenges. The climate can be sometimes tough and wind blows from too many directions and entrepreneurs need to handle this. It can be seen that in UK there is a revival of small businesses. Firms have increased consistently over the years across all industry sectors, the biggest growth being in the service industry. In reality as the research shows was although the inflow of new firms have increased, the outflow (firms exiting) have also increased. The remarkable level of turbulence in the UK market has made it difficult for new firms to survive for longer period of time. 50% of the companies failed before their 5th Birthday, this showed that entry into the market is easy but the survival is difficult. A very few firms make it to a very large organization.
This brings us to the question why the survival of small businesses or new ventures is low and why they fail? These firms are more focused on producing technology which in the longer run doesn’t work for them as they are outdated quickly and therefore lose their momentum. They have a lack of finance which causes the problem of less cash to survive and grow. They face tough competition if they enter the red ocean directly which makes it difficult for them to compete. They have a lack of managerial skills, the owners cannot always be best managers, they need to upgrade themselves in order to run the business efficiently .or in other cases they need to empower their employees and help them grow. Being a strategist is the best policy for the owners and less meddling from their sides helps the business grow and the employees becoming effective and efficient. Lack of leadership is another constraint for the failure of new ventures. The owners don’t have a clear idea about the direction and who best to empower to help lead the business.
Studies have shown that firms who enter in a tough market and then move to an easy market are more resilient and much stronger. They can face challenges and turbulences and survival rate for them is 75.3%. 58.3% of the firms who enter an easy market and then move up to a tough market are less likely to survive the pressure and end up exiting the market from undue pressures and challenges. Percentage of family business all the across the world is very high, in UK being 70%. The employment rate is over 50% all across the world. Contribution to GDP is huge, highest contribution being made by Italy of 90%. Family businesses as can be seen are a major contributor to the economy and therefore are very important.
In order for a firm to survive they have to be resilient to overcome challenges and bounce back in the face of significant stress or adversity. There are certain attributes of entrepreneurial resilience,these aspects are very important for the entrepreneurs. Studies have showed that some of the attributes that makes people more resilient is having the ability to leveraging the strong team when they face diversity. Empowering their team and giving them a certain extent of authority to operate efficiently and effectively. Building and leveraging their social capital. Making strong connection and communicating well with stake holders. Taking advice from external parties and hearing out and following the direction with open mindedness gave the ability to entrepreneurs to bounce back quickly and efficiently.