Personal Initiative Training Leads to Remarkable Growth of Women-Owned Small Businesses in Togo

Abstract

Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries, by teaching accounting, marketing and other basic business skills. However, research shows limited impacts of this traditional business training approach. Through an experiment in Togo, we introduced the personal initiative training program, a new and effective psychology-based entrepreneurship training that outperforms traditional business training. The personal initiative training increased firm profits in Togo by 30 percent relative to a control group, compared to no significant impacts from a traditional business training. Personal initiative training led to more than just a boost in profits for micro entrepreneurs. After the training business owners were more innovative, introduced new products, borrowed more and made larger investments. The personal initiative training was particularly effective for female entrepreneurs, for whom traditional training has often been in effective. Women who received personal initiative training saw their profits increase by 40 percent, compared to 5 percent for traditional business. This study’s findings make a strong case for the role of psychology in better influencing how small business training programs are taught in West Africa and beyond. It shows the importance of developing an entrepreneurial mindset in addition to learning the business practices of successful entrepreneurs. Based on these promising results, the personal initiative training is being implemented in programs in Mozambique, Mauritania, Ethiopia, Jamaica, and Mexico.