Financial and numerical knowledge and self-confidence, key factors to undertake

Financial and numerical knowledge and self-confidence, key factors to undertake

This is stated in a study by the UOC, which has also identified other important factors for starting a business, such as the perception of opportunities and the existence of a favorable social context.
The Open University of Catalonia has carried out a study in which it tries to unravel what are the factors that lead individuals to become entrepreneurs .

To carry out the university research, the responses of 322 people were taken into account. The results were published in the scientific journal The Journal of Entrepreneurship .

One of the main conclusions of the work is that elements such as financial and numerical knowledge , as well as each person’s confidence in their abilities , are essential for individuals to start creating their own business. The first aspect would be crucial, since it can overcome a possible lack of confidence.

However, the majority of those surveyed have claimed to lack good financial and numerical knowledge, as well as the ability to properly assess risks, essential factors for an entrepreneur. These data coincide with world studies carried out by the Organization for Economic Cooperation and Development (OECD), which highlight the need to improve knowledge in financial matters.

In addition, it has also been found that the perception of opportunities, a social context in which entrepreneurship is considered positive and there are nearby examples that serve as a model, or the correct risk assessment have also been found to be quite relevant to jumping into the entrepreneurial pool .

Gender or being unemployed, however, were not shown to be relevant factors for entrepreneurship or not.

“In another later study on financial training, we did find differences between men and women,” says Elisabet Ruiz, also a professor at the UOC’s Economics and Business Studies. “We saw that men are more willing to invest in financial education than women. Also that men, in general, tend to have higher levels of self-confidence in these skills, which could explain why women tend to undertake less or have more problems accessing financial markets, ”she says.

Three types of entrepreneurs according to their motivations

To evaluate the factors that drive entrepreneurship, both subjective aspects (personal perception of entrepreneurial capacity) and objectives (financial knowledge, numerical skills and risk assessment capacity) were considered.

This led to the identification of three different groups of entrepreneurs, each with their own characteristics, which differed by their skills and what motivated them to undertake.

Individuals with higher financial skills and good self-confidence tended to have more social motivations than those with poorer objective knowledge. Those who had a positive self-perception but did not score well in financial knowledge showed more motivation in identifying opportunities in the market .

A third group is made up of those who did not get a good rating in subjective skills or knowledge, who used to undertake motivated by role models , such as family or friends.

Thus, the conclusion that can be drawn from the UOC study is that entrepreneurs are not only created for economic reasons. There are various motivations, which also include job dissatisfaction, lack of opportunities, wanting to be independent or trying to cover some social need.

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