Only 3 percent of Hungarian SME owners want to build an international company, but growth into a large company is also among the goals of only 5 percent.
More than two-thirds of Hungarian entrepreneurs do not set ambitious business goals. All of this can be a cause for concern, because without great ambitions, there will be fewer domestic large enterprises, and if there are fewer large enterprises, the economy will be less strong – concluded the research of the Attitude-Changing Entrepreneurship and Skills Development Mentor Program.
When ordering from an online store, the package comes more and more often from a Czech or Slovak company, just as you can find more Polish brands than Hungarian ones in domestic shopping centers. There are only a few Hungarians at the forefront of regional startups and successful technology companies. The question arises as to how domestic companies are different. Don’t want to or can’t grow bigger?
The research of the Attitude-Changing Enterprise Development Program came to the surprising conclusion that one of the main reasons for the phenomenon can be found in the motivation of domestic SME owners. According to their nationwide research conducted in September, there is a significant relationship between the success of a business and the goals set by the entrepreneur. This means that among those who set bigger goals, more people achieve greater business results.
That is why it is worrisome that only 3 percent of entrepreneurs want to build an international company, and five percent want to build a large company from their company, but only a quarter set the medium-sized company level as their goal. Most of them see themselves as a small company in the future (41%). 18 percent of SME owners see themselves not really as entrepreneurs, but rather as recognized professionals in the future. And 9 percent of the respondents do not even have such ambitions, they simply want to earn well.
“Those who dream of a small company rarely build a big one! As the research shows, the companies of ambitious entrepreneurs have higher sales revenue, employ more employees, are more organized and grow faster. You have to dare to dream big,” highlighted the main conclusion of the research, economist G. Dávid Molnár , head of the Attitude Changer program.
Most entrepreneurs get stuck
Of course, ambitious goals alone are not enough for success. What kind of new idea, marketing solution, production technology or something else can bring success varies greatly from industry to industry, but successful companies are united by a well-organized division of labor. It is necessary to know what the duties of the company manager, the owner and the employees are – however, all this is difficult if the entrepreneur performs these tasks in one person.
Based on the survey, 81 percent of Hungarian entrepreneurs work in their company as an all-rounder, dealing with finance, marketing, strategy, HR and professional issues at the same time.
“This is the early stage of the entrepreneur’s evolution*, when the entrepreneur does everything, or has a few employees, but all threads come together in his hands and he is actively involved in the day-to-day work. Most businesses cannot move forward from here. Opportunities for such businesses are limited, and the entrepreneur is a slave to his company: he can’t go on vacation, sick pay, rest, because then the business stops. Almost every business goes through this situation, but unfortunately the majority get stuck here,” points out G. Dávid Molnár.
This phenomenon greatly limits the growth opportunities of companies, since those who cannot delegate their tasks cannot move on and build a bigger company. If colleagues do not get confidence in their field, the opportunity for independent decision-making and development, this also limits the growth potential of SMEs.
Only 10 percent of the surveyed SMEs reached the management stage, when there are managers in the company who answer to the company owner, and only 4 percent of the respondents reached the investor stage, when there is an appointed manager of the company who answers to the entrepreneur. .
“Half of the entrepreneurs are not where they want to be! In the research, we also looked at what kind of business they want, what evolutionary era the entrepreneurs want to reach. Although half of the respondents want to develop, it was also confirmed here that they do not dare to dream big: 54 percent do not wants to leave the era of everything,” said Dávid G. Molnár.
The big goal encourages development
The biggest business challenge for entrepreneurs today is customer acquisition (40%), increasing efficiency and profit (28%), and team building and motivation (13%).
The data show that the majority of entrepreneurs are constantly training themselves. Beginning entrepreneurs spend one to two hours per month on self-development, later this increases to 1-2 hours per week, then decreases again and stagnates at 2-3 hours per month.
However, personal ambition also affects how much the entrepreneur learns here: the bigger his goals, the more he develops himself. The most popular form of self-improvement is reading (74%), reading online tutorials (44%), online courses and training (42%) and consuming educational videos (41%).
“Since the role of SMEs in the country’s economy is decisive, the ambition of SMEs has a direct impact on the economy. Those who dream of starting a small business, grow up as small entrepreneurs! The ambitions of entrepreneurs must be strengthened. You must dare to dream big, then learn and do something about it,” he concluded. Dávid G. Molnár, program manager of the Change of Mind program, presented the lessons learned from the research.
The entrepreneurial approach of generation Y and Z youth is more successful
From the research of Semmlêtszvaller, it became clear that there is a significant difference between the generations. Fewer of the younger entrepreneurs get caught in the trap of the everything era, Y and Z generation entrepreneurs are at the forefront of entrepreneurial evolution.
“In our opinion, there are two reasons for this: the first is that generations Y and Z were socialized differently, they were born into an entrepreneur-friendly environment, where inspiring entrepreneurial successes, role models, and abundantly available business knowledge have a positive effect on the success of the younger generations. In contrast, the older there was no such example before entrepreneurs,” said G. Dávid Molnár.
According to the program manager of Szemlétzvaller, the other reason is that while the older entrepreneurs started in a less competitive market environment, where a good product or service was enough to get by, the younger ones entered an already saturated market with their business. Therefore, young entrepreneurs must not only be more innovative and persistent, but must also pay special attention to the scalability and sustainability of their business. All of this also means that more of the Y and Z generation entrepreneurs want to reach the era of managers and investors of the entrepreneurial evolution, they do not want to be employees of their own company.
Women entrepreneurs are less ambitious
The research also revealed a significant difference in terms of entrepreneurial goals. Men are more inclined to set bigger and bolder goals, while women entrepreneurs’ goals are less ambitious. According to the unanimous opinion of the experts participating in the research, socialization processes are behind the phenomenon. Traditional gender roles and expectations create stronger ambitions in men, while they do not favor the entrepreneurial ambitions of women.
“The ambition and perspectives of female entrepreneurs often grow together with their results. At the beginning, they cannot even believe that they are capable of building a successful company, then when the first successes arrive, the spirit of entrepreneurship is revived, the ambition grows, and they set themselves bigger and bigger goals. Many they start a business at home, with their children, and then they build a multi-hundred million well-functioning business from almost nothing,” Dávid G. Molnár reported on his experiences.
Despite this, surprisingly, the research found no significant difference between the sexes in the perception of stress, satisfaction with life and business, nor in how much energy and time entrepreneurs invest in developing their business knowledge.
About the Attitude Changer
Attitude Changer is Hungary’s first mentoring program for entrepreneurship and skills development, where successful entrepreneurs pass on their experience and knowledge to their budding fellow entrepreneurs. Szemlétvzáli was founded in 2017 by Levente Biros, the founding owner of the onlinemarkaboltok.hu household appliance web store. More than 500 company managers participated in the program. Website: szmleletvalto.hu