Confidence is on the rise…

Finally some good news for businesses in Britain – The Forum of Private Businesses has discovered that confidence amongst companies based in the United Kingdom is on the rise despite the economic woes the world is facing on a day-to-day basis.

The FPB’s sixth Economic Downturn Panel, which was set up in November 2008, has found out that 26 per cent of those questioned are claiming that they have experienced an increase in trust and confidence in the market for their services and products.

This is compared to 23 per cent of those questioned who claimed that the opposite was apparent and there had been a drop in confidence in the market.

The first increase recorded!

Since the creation of the Economic Downturn Panel this is the first time an increase has been recorded and it is being labelled as a positive reflection of the coming months.

Although the chief executive of the FPB, Phil Orford, is claiming that economic salvation is obviously not knocking on our doors just yet, he is hopefully with regards to the results.

“The government must launch a long-term, strategic plan in the forthcoming Budget - one that helps small businesses survive and grow, and become a catalyst to broader economic prosperity,” said Orford.

Over-confidence can kill a business…

However, before you start getting too self-assured and cocky, you should know that over-confidence has been found to be one of the main reasons why new business fail!

According to research by the University of Leicester the more confident a businessperson is when starting-up a new business then the more chance their business has of failing.

You would have thought positive thinking would be beneficial to the success of the business but apparently over-confident entrepreneurs tend to jump in to new business ventures without conducting the proper research into either the market or the competition causing the ventures to flop.

Businesspeople that are “full of themselves” will fail…

The study, conducted by Dr Briony Pulford and Professor Andrew Colman, claimed that those people who were “full of themselves” were likely to make uninformed leaps that would take them into markets that wouldn’t be large enough to accommodate them.

“When success depended on skill, overconfidence tended to cause excess entry into a marketplace.  Market-entry decisions tend to be over-optimistic, with the inevitable result that new business start-ups tend to exceed market capacity, and many new businesses fail within a few years,” claimed Dr Pulford.

The study involved entrepreneurs taking part in a game which simulated market conditions – players could either win or lose money depending on their business choices in different scenarios that aimed to be as realistic as possible.

“Our findings have practical implications for people starting new businesses. They should beware of overconfidence, and they should be especially wary when entering small markets or markets that seem to present easy business opportunities, because over-entry seems most likely in these circumstances,” continued Dr Pulford.

Man or mouse?

Do you think that confidence and business success go hand-in-hand or are you of the opinion that risk-taking will ruin a business?  Leave us a comment and let us know what you think…

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