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How could financial institutions retain starting entrepreneurs? Insight in the outflow of starting entrepreneurs

Berg, A. van den (2013) How could financial institutions retain starting entrepreneurs? Insight in the outflow of starting entrepreneurs.

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Abstract:Problem and purpose. There is a relationship of mutual dependency between banks and small-­‐medium enterprises (SME’s). For starting entrepreneurs bank loans are often the only option concerning capitalization, and SME’s are an important customer group for banks (Hemmasi, Graf and Winchell, 1996). Starting entrepreneurs are an important share of inflow in the business segment, but the numbers for Rabobank Centraal Twente of starting entrepreneurs show a decline while the numbers of starting entrepreneurs increases. The aim of this research is to investigate two main categories of outflow (end of business and switching) of starting entrepreneurs at Rabobank Centraal Twente and to provide recommendations about how she could increase the retention of starting entrepreneurs. Theory and methodology. In the first part of the theoretical framework, a PEST-­‐analysis and five forces analysis were used as a tool to map the environment of financial institutions. The second part listed common determining factors in business failure and needs. Starting entrepreneurs need guidance and handholding and need more from their bank than only the exchange of money. The third part focused on service quality, meeting needs, expectations and relationship banking. This theoretical framework was the foundation for the constructs concerning switching and end of business, which were measured by means of surveys. The surveys contained quantitative and qualitative components. The survey was spread among 100 former/inactive business customers. Analysis. The results of the surveys showed that starting entrepreneurs expect Rabobank Centraal Twente to be a reliable partner for their business matters. They expect Rabobank Centraal Twente to be a source of adequate advice and thinking along, in a more proactive way. Starting entrepreneurs especially leave Rabobank Centraal Twente because of the price and the service quality. Starting entrepreneurs who ended their business see especially the economic crisis as a cause and face problems with obtaining sufficient sales. The surveys showed that there is a gap between expectations and perceiving: a perceived quality gap. Conclusions and recommendations. Concerning end of business of starting entrepreneurs, Rabobank Centraal Twente has no influence on lack of entrepreneurial skills in terms of personal characteristics, competences and the economic crisis. But she could have an advisory role for starting entrepreneurs who suffer with lack of expertise in areas like administration, marketing, recordkeeping and financial controls. Concerning switching, Rabobank Centraal Twente has to understand the priorities and needs of the starting entrepreneurs. Therefore the recommendations are: • Change the content of the introduction meeting. More focus on needs, expectations and enlightenment. • A more proactive approach towards starting entrepreneurs. • Tailor the service to the customers’ specific requirements: mapping needs and expectations. • Increase the perceived value of a business account. • Keep the information systems up to date. These recommendations are about capturing the needs for advise, guiding, a professional adviser and a sparring partner. For example by means of advisors who are specialized in starting a business: a starter advisor or a starter counter.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration BSc (56834)
Link to this item:http://purl.utwente.nl/essays/63687
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