The power of the right advice in business growth. An experience from Venezuela

Does access to specialized knowledge and expert advice at an early stage increase the probability of survival of a company for the next 3 years?

Developing countries are increasingly interested in promoting entrepreneurship and innovation as a crucial component of their policy agenda toward job creation, economic development and growth. Even though several successful experiences have been studied, few of them take into consideration the special characteristics that Latin American entrepreneurs share. This has let to little knowledge about appropriate policies to foster high impact entrepreneurship in the region.

One of the hurdles entrepreneurs face in developing countries is the lack of access to financing, especially at an early stage. However, after 13 years of experience working with entrepreneurs, The IDEAS Foundation believes that another great barrier from achieving high levels of growth is the business’ lack of very specific knowledge and preparation to capture and use those financial resources correctly even when they are available both inside and outside the country.

This project evaluates an intervention that administers tailor-made advice and training sessions to businesses in their early stages of development. We expect to find a reduction in the exit rate of the treated businesses, in addition to an increase in revenues and sales, improvement in production processes, increase in employment. This study will aim to evaluate the impact of tailor-made consulting services (specialized knowledge and expert advice) in early stage enterprises on:

  • access to capital;
  • survival rate after 3 years of the intervention; and
  • business growth measured

through different ways such as number of employees and financial variables.