While academic research on entrepreneurship predominantly emphasizes success, the overwhelming majority of businesses are prone to entrepreneurial failure. In practice, the entrepreneurial shortcomings especially concern start-up businesses. Statistically, half of the newly established businesses fail in the first 5 years. In this respect, Cope (2011) claims that “failure represents one of the most difficult, complex and yet valuable learning experiences that entrepreneurs will ever have the (mis)fortune to engage in” (p. 620).
From the perspective of as business owner, it is evident that most companies lack strategic vision. The lack of strategy (at least for the initial three-year period) restricts entrepreneurial potential and business opportunities for such companies. The second reason for entrepreneurial failure is lack of marketing, which keeps them unknown to their target audiences. The third reason for failure is the lack of proper HR management and operation as a learning organization open to change and innovation (Singh, Corner, & Pavlovich 2007).
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Other major causes of entrepreneurial failure involve internal factor that personal characteristics of a business owner, and three external factors, namely: corporate structure, business environment, and entrepreneurial process (Minniti, & Bygrave 2001).
The concept of entrepreneurial resilience marks the ability of a business to face any possible challenges, risks and pitfalls and remain on track. It is rather important for a company to maintain trust and supportive relationships with stakeholders that would help in time of need. For a business owner, it is rather important to set realistic and attainable goals, be self-confident, and inspire positive feelings. In addition to personal characteristics of a business owner, entrepreneurial resilience assumes structural (organizational) and external factors. Entrepreneurial resilience often depends on various activities, attitudes, and relationships on both internal and external organizational levels. The stronger the internal organization is, the more resilient it is to external risks and hazards (Davidson 2000). Thus, “business failure is connected to the manager’s decisions and behaviors, and the way he conducts his enterprise” (Atsan 2016, p.436).
The concept of entrepreneurial profile assumes a number of psychological and behavioral factors attribute to a business owner or leader. It is of great strategic importance that a business leader pursues a definite leadership style. While the style may be a flexible combination of various approaches varying from servant to situational leadership, entrepreneurial profile provides a business owner with a sense of authority and power over subordinates (De Vries 1977).
Deep comprehension of these essential concepts is vital to transform a business owner into an effective leader capable of managing, changing, developing and leading others. In times of crisis, much depends on a business owner’s capacity to take responsibility and cope with the challenges in the most effective manner.
