A Second Chance in Business - To Benefit All of Us

• Entrepreneurs make mistakes - but then who doesn't?

"Anyone who has never made a mistake has never tried anything new" - Albert Einstein. As a society, we haven't come up with the inventions and new thinking that has made us all so much richer over the centuries by steadfastly avoiding mistakes - but rather by learning from them.

• Entrepreneurs aren't infallible - but who is?

Some well-established companies would not exist if their founders had given up after their first failure, and we would have to go without a host of practical, everyday items if the inventors had abandoned their pioneering instincts after their first failed attempts. Business failure has to be taken seriously, but if we want to tap the full potential of business to creating wealth and jobs in Europe, we should ensure that genuinely talented entrepreneurs have every opportunity to give it another try.

• Starting out

Studies show that Europeans are relatively risk-averse, and this can deter many people with otherwise great business ideas from starting their own company. The most common concerns are the risk of going bankrupt and losing personal property, in particular the negative impact on one's family. Another deterrent to entrepreneurship is the stigma attached to business failure. If we are to encourage more people to start their own business, we need to foster a positive attitude to risk-taking and failure, as well as providing appropriate support.

• When the going gets tough

Small businesses are especially prone to running into financial difficulties as they often lack the resources to adapt to rapidly-changing market conditions. But if such businesses can be saved, their assets could be more valuable if they were retained in the business rather than being sold off to pay creditors. This approach would be more likely to preserve jobs, give creditors a larger return on their investment and allow the company to continue making a contribution to the economy. So we need to enhance the survival rate of viable businesses and encourage entrepreneurs in distress to take action early on.

• Starting again

Entrepreneurs who have tried but failed need an opportunity for a fresh start. Studies show that they learn from their mistakes, and that this leads to growth in GDP, employment and productivity. If Europe is to tap the full potential of its business self-starters, they need both financial and moral support for their second venture.

• Winding up failed companies

If it proves impossible to save a company by restructuring, it should be easy to wind it up, to minimise the losses for all parties. Bankruptcy leaves debts unpaid and destroys capital and jobs. Efficient bankruptcy procedures are essential to strike a balance between the interests of the business, its investors and its staff.

~credit : http://ec.europa.eu/~