Entrepreneurship skills - learned in school or inborn?

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"Yes, businesses run by people who lack formal training tend to suffer as a result of owners being easily manipulated by other people. Their businesses can collapse after a short time, while owners with formal training have the necessary skills to construct budgets and business inventories that are needed to grow a business steadily," says Dr Marvin Mbassana, a lecturer of economics at the University of Rwanda's College of Business.

Dr Mbassana further explains that without this business training, naive entrepreneurs fall victim to avoidable risks. "Occasionally they buy into unprofitable investments. Well, business is about taking risks but these have to be calculated. Only business schools can establish such entrepreneurial minds," he adds.

Likewise, Sylvia Uhirwa, the partnerships coordinator at Kepler Institute in Kigali, considers formal training a necessity for mastering laws and business principles that usually challenge young entrepreneurs. "For instance, only formal institutions have the capacity to educate someone on the legal affairs in business. This also includes the kind of language business owners use when addressing their clients. In this case courses like procurement or sales management become essential in doing business today," says Uhirwa.

On the other hand, she adds that business demands making constant projections to thrive in competitive markets but their precision depends on whether owners are professionally trained. "It is a necessity because once you start a business, the possibility of meeting competitors along the way is inevitable. Necessary projections can help one beat competitors but for that to be successful, someone needs enough business training," she adds.

Formal training not a guarantee for success

As much as some people assume that business courses are enough to guarantee success as an entrepreneur, others feel that business accomplishment is more about timing and skills.

For instance, Ronald Wandira, a history teacher at Riviera High School, argues that a formal business course should not necessarily be the first option for an entrepreneur, but rather a proper business plan. "There are many things to look out for before starting a business. Spending time in class learning theory consumes time that could have been invested in potential business projects. Besides, there are cases of individuals who take on business courses but just end up searching for jobs. I believe business is more about creativity," he says.

Wandira, however, advises that formal business training should be considered when already established entrepreneurs seek to improve management skills or improve on the quality of their products. "At some point when the business is expanding, you may need to enroll for a course in administration, management or supply chain to ensure that you handle all your business operations appropriately," he adds.

However, research carried out at the University of Arizona and New York University found that people who receive entrepreneurship education perform better at running their own businesses although entrepreneurship education does not necessarily result into better startup company performance.

Interestingly, the study found that the same people who are good at running their own businesses might also be the most interested in studying entrepreneurship. As a result, receiving entrepreneurship training and startup company performance are correlated, but the education doesn't cause the performance.

Other randomised experiments in Peru that focused on the effect of entrepreneurial training obtained mixed results. Entrepreneurs who received training showed higher sales, but did not have higher profit margins or attracted more employees.

In Rwanda, however, as part of efforts to improve entrepreneurship skills, the government established the National Employment Programme (NEP) as a tool to strengthen the coordination of employment programmes through better planning, implementation and coordination from different stakeholders engaged in job creation. All these feed into the annual target of creating 200,000 off farm jobs for youth. While NEP targets to equip individuals with the desirable entrepreneurship skills through business training, those who produce good plans stand high chances of receiving funding for their projects.

Business people speak out

Although many people believe that training should be the first step in planning for businesses, some business owners feel that individuals should spend more time looking for capital than piling up theory in their heads.

Patrick Mizero, a hardware dealer in Kisementi, Kigali, is one such person who insist that small businesses need to find enough capital in order to progress and this is where more effort should be put. "Anywhere you go, startup capital is a big problem and this varies depending on the type of business. Once you have secured this, a short business course is enough just to improve operations for an already established business," says Mizero.

He adds that for startups, formal training should focus on feasibility studies to assess the business environments because this is the biggest challenge fresh entrepreneurs face. "Where the business is established affects its profitability greatly. These are things which should be sought for in case someone needs to get formal business training," he adds.

For Denis Nsanzamahoro, a filmmaker in Kigali, the bigger the firm, the higher the demand for formal business training, and as firms expand, they should be tasked to upgrade their business skills. "You may start your business as a single person but as it grows the demand for maintaining proper accounts increases. Without formal business knowledge all operations would be affected," says Nsanzamahoro.

Jacques Nkurunzinza, a trader in Kigali, insists that all successful enterprises at least demand minimum qualifications in a business course. "People boast about being successful in business without papers but lack of minimum knowledge from school has caused many small businesses fail to progress. This is because as businesses expand, demand for more research increases and someone will have to hire those who received formal business training to cope," says Nkurunziza.

It should be known that as much as starting a business demands creativity, the globalised economy demands professionalism in all aspects. Individuals with maximum business training therefore end up scooping most of the big tenders because they have broad knowledge on conducting business.

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