2023-10-03 10:14:52
In Tunisia, small emerging businesses that fail remain an understudied group. Because what we lack most is a consensus on the meaning of entrepreneurial failure which, moreover, by its multidimensional and complex nature, can take on several configurations. The constraints are, of course, there! But we must not forget that every failure is a form of learning.
Starting a business currently remains a very daring operation. With the difficult economic situation, both nationally and internationally, statistics show that the early demise of a young small business is a more likely fate than its survival. And even with this sad reality, we continue to talk regarding entrepreneurial success. In Tunisia, small emerging businesses that fail remain an understudied group. Because what we lack most is a consensus on the meaning of entrepreneurial failure which, moreover, by its multidimensional and complex nature, can take on several configurations. The constraints are, of course, there! But we must not forget that every failure is a diploma.
Last August, the National Organization of Entrepreneurs said that around 134,000 economic companies declared permanent bankruptcy, while almost 50% of companies currently operating are facing the specter of bankruptcy. It should also be noted that 1,900 large industrial units went bankrupt between 2011 and 2015. It appears that nearly 10,800 business leaders are on the run.
Also, in July 2022, the spokesperson for the National Association of Small and Medium Enterprises declared, on a private radio station, that out of a sample of 3,000 companies surveyed, 60% of companies declared that they were in cessation. activities, 92.1% consider themselves in a situation of bankruptcy, 76.4% managers have been sentenced to prison with immediate execution and 62% managers are in dispute with banks.
The causes of failure
Despite these few statistics and these occasional efforts to evaluate the situation, we must always keep in mind that investment remains, par excellence, the dynamo of any economic system.
But these investments, which can be great successes, can also face uncertainty. Because it is an integral part of entrepreneurship. In life and in business, things don’t always go as planned. Failures often mark the daily life of any entrepreneur. They can range from a simple failure of a new product launch to the complete and permanent dissolution of a company. In any case, there is never an easy failure. On the other side, there can be the dazzling successes and lasting successes. This can range from success stories from small street corner firms to world leaders, unfailing reputations and successful transformations. But the main risk of private companies is that they can easily fail. Private companies can become obsolete or inefficient. They may fail to adapt to changes and innovations, have poor customer service, recruit the wrong people or let essential skills go.
They can grow too quickly or too slowly, in any case, each case is unique. They may let their costs slide or seek to reduce them too much. They may misallocate their resources, underinvest or overinvest. Not only can they fail, they can fail miserably.
At the end of a long agony and to everyone’s surprise, these companies can disappear, giving way to competitors who, to succeed, will have to do better. And that’s what progress is made of. Competition allows us to choose and benefit from the best product, the best service, the best management, the best organization…
Situations of failure represent a favorable moment to review one’s objectives and also those of the stakeholders in one’s entrepreneurial approach. Indeed, co-founders, investors, suppliers, etc. do not necessarily share the same goals. Everyone sets their own, and perceives failure both according to their own interests or those of the group. We must therefore understand and agree on the objectives set and the motivations of each person.
Yes ! It is also a matter of the State
Situations of failure can also concern state-owned firms. But the State’s problem is that it rarely admits it. That doesn’t mean that it does better than the private sector, far from it; it just means that when he underperforms, he can continue to live like a zombie for as long as he can, feeding off taxpayer money. He can screw up as long as he wants; it has no competitors, its resources are limited only by its capacity to drain those of others.
In addition to their lack of incentive to improve, public companies tend to use and abuse their situation. The State is often a very greedy shareholder, but he places “his” generosity with the employees of public companies on taxpayers. Worse ! the State can also keep in activity private companies which should have failed. It can keep entire industries on life support which will then have no incentive to improve, finance and subsidize projects doomed to failure, buy products that are far from the best available on their market, buy them well. too expensive…
Mediocrity backed by public power can last indefinitely and permanently handicap the economy, which carries the weight of uncorrected inefficiency like a ball and chain. Without the opportunity to fail, without fear of competition, there is little incentive to improve. Isn’t it wise to recognize your failures so you can overcome them and save the day? Failure allows individuals to learn and society to progress.
Failure is increasingly seen as a situation conducive to improvement, if we know how to fail, if we get back up, if we analyze it and if we put in place the necessary actions to capitalize on it. We must develop “leadership of failure” through learning and resilience. Avoiding failure is actually preventing success, and preventing progress.
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