Overview

Report title: Teaching business skills to support microentrepreneurs

Source: J-PAL

Year published: 2023

Sources
Categories
Establishment & Growth
Maturity & Transition
Retirement & Inactive
Context
  • Many microentrepreneurs struggle to grow their businesses—not just due to lack of capital, but due to gaps in business knowledge and decision-making
  • Business training programs have become common in development efforts, but there’s been uncertainty about whether they actually improve business outcomes
  • This policy insight draws on 40+ randomized evaluations to assess whether teaching business and financial skills can help microentrepreneurs earn more and run more sustainable businesses
     
Outcomes
  • Traditional classroom-style business training improved practices but had limited impact on profits—typically small and not statistically significant across most studies
  • Personalized support, like coaching or mentoring, was more effective—increasing profits by 11–25% in some programs, particularly when tied to day-to-day decision-making
  • Psychological training (e.g. mindset, aspirations, goal-setting) delivered stronger results than traditional business training in some cases—especially for female entrepreneurs
     
Implications
  • Combine business training with hands-on support—government and donor programs should pair technical content with follow-up coaching, especially for newer or lower-income entrepreneurs
  • Test alternative formats like mindset or goal-setting training—where traditional training falls short, lighter-touch behavioural interventions may deliver better outcomes at lower cost
  • Target resources where uptake is highest and impact is proven—for example, women-led enterprises or high-growth potential sectors where tailored behavioural support drives clear financial gains
     
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