RESTART Toolkit

TABLE OF CONTENTS
Introduction ............................................................................................................................................................................................. 4
1. How to read and use the Restart Entrepreneurship Alliance Toolkit .............. 6
The toolkit provides ...................................................................................................................................................................... 6
Navigating around the toolkit ..................................................................................................................................... 7
Acronyms and Terminology ............................................................................................................................................. 7
2. Second Chance Entrepreneurs and EU Agenda .............................................................................. 10
Data for business births/deaths in EU ............................................................................................................. 10
Business Failure/Second Chance in Ireland ............................................................................................. 14
Business Failure/Second Chance in Catalan Region .................................................................. 16
Business Failure/Second Chance in the Netherlands ............................................................... 17
Business Failure/Second Chance in Bulgaria ......................................................................................... 19
Second chance for entrepreneurs in EU policies - current state ........................... 21
3. The Process to set up Restart Entrepreneurship Alliance .................................................. 25
Step 1: Planning the process ..................................................................................................................................... 27
Step 2: Define the Region .............................................................................................................................................. 28
Step 3 Identify key stake holders ..................................................................................................................... 29
Step 4: Identify current policies/programs/ ................................................................................... 31
strategies and possible gaps and needs
Step 5: Establishment of the Alliance ...................................................................................................... 32
4. Communications .............................................................................................................................................................................. 34
5. Resources and tools ................................................................................................................................................................... 36
6. Added value of the Alliance ........................................................................................................................................... 37

INTRODUCTION
Developing Tools for the creation of Second Time Entrepreneurship Alliances is motivated by
two closely-related challenges.
1) The economic crisis in Europe have caused the bankruptcy of many small and medium
sized enterprises in Europe which on the other hand are seen as the backbone of the
EU economy
2) Second time entrepreneurs have a better chance to succeed in their business based
on the experience gained and lessons learned in their previous business activities
Although the business failure can hold the germ of tomorrow’s success, business closure is not
yet seen as an opportunity for a more reinvigorated entrepreneurship and business activity. This
fact is recognized by the EU policy makers and is included as a main priority in EUROPE 2020.
By developing a network of RESTART Alliances,we have the potential to deliver several benefits
to the second time entrepreneurs:
• Help second chance, underperforming and aspiring entrepreneurs to learn
from past experiences
• Empower educators to address the specific needs of before mentioned
entrepreneurship groups
• Foster a change in public perception, especially towards second chance entrepreneurs
• Support the collaboration of those who wish to promote change
WHO SHOULD BE INVOLVED IN A RESTART ALLIANCE?
Stakeholders are defined as those groups that have a stake/interest/right in entrepreneurship
support and development and related education sector and those that will be affected positively
by RESTART Entrepreneurship activities. They include relevant government agencies, population,
private sector entities, educational institutions, funding institutions and others.
4

The Alliance purpose is to strengthen the use of the knowledge triangle and bring together
public and private VET providers, HEIs, small business associations, chambers of commerce and
other key stakeholders from local, regional and national governments to:
• share up to date information about the problems, needs and opportunities
of second chance entrepreneurs;
• identify best practice support structures and training objectives;
• incorporate findings into a new VET course called “Restart: the Value of Starting Over”;
• generate regional Action Plans committing each stakeholder to individual
and collective activities to create a more enabling environment for professional
development of second time entrepreneurs.
Setting up the RESTART Entrepreneurship Alliance includes the following main steps:
Confirm
the demand
• Do a survey
• Identify the need
Choose
the focus
area for
you region
• Train
• Support
• Fund
Contact
potential
partners
for the
Alliance
• Identify the stakeholders
• Gather information
• Establish the Alliance
By doing so, the you will able to formulate needed answers to key questions about establishment
of a RESTART Entrepreneurship Alliance
• Why is assistance to second chance entrepreneurs needed?
• What type of failed or about to fail entrepreneurs will the Alliance focus on helping?
• Which of the six second chance entrepreneurship components is most needed?
• What organizations may be available to help?
• What prior experience could be leveraged?
• What additional resources and materials are available to reference?
5

HOW TO READ AND USE THE
RESTART ENTREPRENEURSHIP ALLIANCE TOOLKIT
This RESTART Entrepreneurship Alliance toolkit has been specifically developed to help you
understand why it is important to build and strengthen partnerships and collaborations with
stakeholders for support of second chance entrepreneurs. It has been designed to identify,
categorize and compile real-life examples that can be accurately defined as best practices of
second chance entrepreneurship.
THE TOOLKIT PROVIDES:
• General information and examples
• Advice
• Practical examples of Allinaces
• ‘How to…’ guides, covering key organisational activities
• Tools and templates that can be adapted by other Alliances for local use.
The Site map lists all of the pages within the toolkit. The resource is modular in design allowing
for complete flexibility in the way that you use it. You can use the resource in various ways, for
example:
• as an individual or organisational training resource, defining stakeholders and
providing background information on how to develop Alliances
• as an organisational planning and implementation tool, providing a framework and
templates for local adaptation
• as a quick reference tool for specific issues relating to stakeholder
partnerships and collaborations.
6

NAVIGATING AROUND THE TOOLKIT
The navigation bar at the top of the page shows the main topics covered in the toolkit - click a
button to view the topic of interest. To view the sub-sections within that topic click the links in
the menu on the left-hand side of the page. Click the ‘Back to...’ link in the bottom right-hand
corner of the sub-section page to view the main section page for that topic. Some sections have
pop-up boxes that are revealed by clicking on the purple-coloured text.
To print the screen text and associated pop-up boxes, click the ‘Print-friendly text’ link at the
bottom left-hand side of the page. This will open a PDF of the current page (including any
pop-up boxes) that you can print. In addition, underlined text is linked to a different section
of the toolkit, a document or website. Use the Other tools and resources section to find links
to information and guidance on specific topics from other organisations. Download any of the
documents or templates and print off as many copies as you need. Use and adapt them in ways
that work best for you and your organisation.If you are having difficulties finding the page you
need, try the Site map. This lists and links to all of the pages within the toolkit.
ACRONYMS AND TERMINOLOGY
The following is a list of widely-used terms within Restart Entrepreneurship Alliance Toolkit.
Business demography
Statistics that relate to the birth, survival (followed up to five years after birth) and death of
enterprises within the business population are referred to as business demography statistics.
Within this context the following definitions apply.
• An enterprise birth amounts to the creation of a combination of production factors,
with the restriction that no other enterprises are involved in the event. Births do not
include entries into the business population due to mergers, break-ups, split-offs or
restructuring of a set of enterprises, nor do the statistics include entries into a
sub-population that only result from a change of activity. The birth rate is the number
of births relative to the stock of active enterprises.
• An enterprise death amounts to the dissolution of a combination of production factors,
with the restriction that no other enterprises are involved in the event. An enterprise
is only included in the count of deaths if it is not reactivated within two years. Equally,
a reactivation within two years is not counted as a birth.
7

Business failure
Business failure is when a company is ceasing its operations following its inability to make a
profit or to bring in enough revenue to cover its expenses. The final step is always that the
business runs out of cash. It refers to any situation where losses (either current or predicted)
cause discontinuance of business. It does not necessarily mean bankruptcy.
Enterprise birth
An enterprise birth occurs when an enterprise (for example a company) starts from scratch and
begins operations, amounting to the creation of a combination of production factors with the
restriction that no other enterprises are involved in the event. An enterprise birth occurs when
new production factors, in particular new jobs, are created.
Enterprise births do not include:
• dormant enterprises being reactivated within two years;
• new corporate entities being created from mergers, break-ups, spin-offs/split-offs
or the restructuring of enterprises or a set of enterprises;
• the entry into a sub-population resulting only from a change of activity.
Enterprise death
An enterprise death is the termination of an enterprise, amounting to the dissolution of a
combination of production factors with the restriction that no other enterprises are involved in
the event. Deaths do not include:
• exits from the population of active enterprises due to mergers, take-overs,
break-ups or restructuring of a set of enterprises;
• exits from a sub-population resulting only from a change of activity.
Gem Report
GEM Report is the Global Entrepreneurship Monitor (GEM) survey. 2016 is the 17th year that GEM
has tracked rates of entrepreneurship across multiple phases and assessed the characteristics,
motivations and ambitions of entrepreneurs, and the attitudes societies have toward this activity.
This report covers results based on 601 economies completing the Adult Population Survey
(APS) and 62 economies completing the National Expert Survey (NES). This report features a
page of results on each economy, with numbers and rankings on key GEM indicators from the
APS, as well as an assessment of ecosystem factors from the NES.
8

Insolvency
Insolvency is when an organization, or individual, can no longer meet its financial obligations
with its lender or lenders as debts become due. Before an insolvent company, or person, gets
involved in insolvency proceedings, it will likely be involved in informal arrangements with
creditors, such as making alternative payment arrangements. Insolvency can arise from poor
cash management, a reduction in cash inflow forecasts or from an increase in expenses.
Second chance entrepreneurs
Second Chance refers to the business re-start of a formerly bankrupt / failed entrepreneur. An
important limitation to an effective Second Chance are lengthy and costly bankruptcy procedures
as well as the fact that honest bankrupt entrepreneurs are usually subject to the same limitations
as fraudulent entrepreneurs. This not only presents a risk that failed honest entrepreneurs face
the social stigma attached to bankruptcy, but also the legal and administrative impediments to
re-start a business.
SBA
The Small Business Act (SBA) is an overarching framework for the EU policy on Small and
Medium Enterprises (SMEs). It aims to improve the approach to entrepreneurship in Europe,
simplify the regulatory and policy environment for SMEs, and remove the remaining barriers to
their development.
SBA Fact Sheet
SBA Fact sheet is part of the SME Performance Review and is one of the main tools the European
Commission uses to monitor and assess countries’ progress in implementing the Small Business
Act (SBA) on a yearly basis. With an emphasis on the measures from the SBA Action Plan, the
review brings comprehensive information on the performance of SMEs in EU countries and nine
other partner countries. It consists of two parts: an annual report on European SMEs and SBA
country fact sheets
9

SECOND CHANCE ENTREPRENEURS AND EU AGENDA
This section outlines current developments in EU as general and Restart Project Partner Countries
in particular, and explains why it is important to support second chance entrepreneurs.
DATA FOR BUSINESS BIRTHS/DEATHS IN EU
Business failure, like business creation, is part of a dynamic, healthy market. Evidence shows that
by far the majority (96%) of bankruptcies are due to a string of late payments or other objective
problems – they are, in other words ‘honest failures’, without any fraud by the entrepreneur.
Entrepreneurs are nevertheless treated by many bankruptcy laws as if they were fraudulent,
having to go through complex procedures before they can be discharged. In some Member
States the procedure may take such a long time that entrepreneurs will not consider another
business venture. In some cases they may be legally barred from starting a new enterprise for
much or all of their lifetimes.
Even after a discharge, former bankrupts are stigmatised and have difficulties financing a new
enterprise. Therefore, many potential entrepreneurs simply give up and do not consider trying
again. Business entry and business exit are natural processes that are inherent to European
economic life. In fact, 50% of enterprises do not survive the first five years of their life and of all
business closures, bankruptcies account in average for 15%. Yet research shows that ‘second
starters’ are more successful and survive longer than average start-ups; they grow faster and
employ more workers. Thus, a failure in entrepreneurship should not result in a “life sentence”
prohibiting any future entrepreneurial activity but should be seen as an opportunity for learning
and improving – a viewpoint that we already today fully accept as the basis of progress in
scientific research.
Business demography statistics provide data on business births and deaths in EU which
very significantly per country in the Union. The statistics are presented in Table1: Enterprise
demography, business economy, 2013, which shows enterprise birth and enterprise death rates
as well as the average size of newly born enterprises in terms of their employment. There are
significant changes in the stock of enterprises within the business economy from one year to the
next, reflecting the level of competition, entrepreneurial spirit and the business environment.
10

Among the countries providing data to
Eurostat, enterprise birth rates in 2013
ranged from 3.6 % in Belgium to 22.2 %
in Romania and 23.1 % in Lithuania. Since
most new enterprises are small, the share
of newly born enterprises among the
whole business enterprise population
is much higher than the corresponding
proportion of the workforce accounted
for by these enterprises.
The average employment size ranged from 0.6 persons in Finland, 0.8 persons in the Netherlands
and 0.9 persons in Ireland (2012 data), to averages of more than two persons in Croatia and
Latvia, peaking at an average of 2.4 persons in the United Kingdom.
11

In 2011, enterprise death rates were
particularly low in Malta (2.1 %) and
Belgium (2.4 %), ranging elsewhere
between 5 % and 15 %, with Hungary
(16.6 %), Lithuania and Portugal (both
18.2 %) above this range.
Table 1: Enterprise demography, business economy, 201
12

Consequently, any move to encourage a new generation of entrepreneurs must include
reassurance that, if their first idea does not fly, they will not be forever barred from trying to ‘take
off’ again. Thus bankruptcy laws must provide for swift, efficient ways of lodging and recovering
claims for creditor enterprises, while faster and more affordable procedures for winding
up businesses and for discharge from bankruptcy should be put in place. The Commission
adopted last December a Communication on a new European approach to business failure
and insolvency to create a more business friendly environment, for example by improving the
efficiency of national insolvency laws including the length and costs of the period of discharge
from bankruptcy. As a first step to be taken, the Commission also adopted at the same time a
proposal for the modernisation of the Regulation on insolvency proceedings which will ensure
cross-border recognition of the rescue of enterprises and also includes facilitating the lodging
of claims in another Member State.
A second chance entrepreneurship policy that enables formerly bankrupt entrepreneurs restart
may represent one of the most promising and under exploited policy options for company
creation and job growth.
Research shows that businesses set up by re-starters grow faster than businesses set up by
first timers in terms of turnover and jobs created. But acting on second chance would bring an
even larger impact on entrepreneurship: many would-be entrepreneurs do not start a company
because of their fear of the consequences of business failure and thousands of companies are not
created and tens of thousands of jobs are not created every year in Europe. Fear of bankruptcy
and its consequences acts as an effective deterrent to entrepreneurship. An effective policy for
support of second time entrepreneurs is fundamental to send a message that entrepreneurship
may not end up as a “life sentence” in case things go wrong.
Restart Entrepreneurship Project includes partners from four countries – Ireland, the Netherlands,
Catalan Region in Spain and Bulgaria. Each of the partners is sharing statistics with regards to
business failures and business starters in their countries.
13

BUSINESS FAILURE/SECOND CHANCE IN IRELAND
“
Ever tried. Ever failed. No matter.
Try again. Fail again. Fail Better
Samuel Beckett
“
According to Bank of Ireland 66% of all business start-ups will fail in their first five years. There
is a general consensus that 80% of tech start-ups will fail. Between 2005 and 2011 Enterprise
Ireland (enterprise development agency in Ireland) supported ventures had a failure rate of 46%
which is well below the 80% figure. Fear of failure among the Irish entrepreneurial population
has risen from 35% to 45% between 2006 and 2013 (2013 Gem Report).
The recession over the last year has led to increasing business failure in Ireland with trading
conditions very challenging for companies particularly those in the hospitality and construction
sectors. The number of business failures exceeded the number of business start-ups in Ireland
between 2007 and 2012 as the economy went through a major contraction e.g. in 2012 there
were 18076 business failures and 12551 business start-ups.
There are a number of key reasons for business failure in Ireland:
1. Absence of planning, direction and accountability.
2. Poor cash-flow management.
3. Lack of skills and business knowledge within the organisation.
4. Reluctance on behalf of the business owners to seek outside help in a timely manner.
5. Stress from all of the above leading to burn-out and business
breakdown. (actioncoachireland.com)
14

These are very worrying statistics and we need to reverse these trends as a matter of urgency.
However there is no specific system in place to handle company failure in Ireland and many
companies have to resort to bankruptcy which means that it is very difficult to start again.
According to the Small Firms Association (SFA) in Ireland a supports are needed for small
business owners who go to the wall and who want to start again. The SFA explain that Ireland’s
negative attitude towards failure in business in hindering entrepreneurs who want to bounce
back after a business has failed. Although it is accepted that that entrepreneurs who have
experienced failure learn from their mistakes and are more successful in the future – they still
have to overcome the stigma of failure.
The SFA have asked that more advice and mentoring services, including restructuring, crisis
management, debt settlement and support for re-starting a failed business should be made
available. “In Ireland we currently do not provide any specific early warning support or second
chance programmes. A strategy moving forward should be to provide entrepreneurs with
warning tools and assistance in identifying situations that could lead to insolvency or the closure
of the business” (McNally SFA) 1 . Such services for struggling businesses would allow owners to
come back from the brink of a crisis, or have a better chance of making a fresh start .
1
http://www.thejournal.ie/fail-better-irish-stigma-failure-hurt-business-1605570-Aug2014/
15

BUSINESS FAILURE/SECOND CHANCE
IN CATALAN REGION
The statistics about bankrupt companies in Catalonia as provided by the Statistic National
Institute of Spain 2 shows that the crisis has affected negatively number of companies being
only 258 in 2007, 1866 in 2013 and going down to 974 in 2015 but still three times more
compared to 2007.
A study conducted by the University of Barcelona Entrepreneurship Chair and the program
“Innova” of the Polytechnic University of Catalonia (UPC), ordered by the General Direction of
Cooperative Economy, of the Department of Labor of the Catalan local government (“Generalitat
de Catalunya”) analyzes the reasons of failure of Catalan entrepreneurs.
The comparison of the obtained results with the experience of the several technicians that
advice and support business creation, allow providing evidence on some gaps that probably
entrepreneurs do not know before to start their business project. The main reasons for
bankruptcy in Catalonia are:
1. Avoid future loss
2. Failure/bankruptcy
3. Business hadn’t the expected success
4. Difficulties to obtain finance or needed helps
5. Payment defaults
6. Personal reasons or incompatibility with family life
16

BUSINESS FAILURE/SECOND CHANCE
IN THE NETHERLANDS
“
The taboo of business failure:
once fail, always fail
“
Business failure
The number of bankruptcies peaked in May 2013. After that the number continued to decline
resulting in the lowest number of bankruptcies in August 2015 since October 2008. However,
this was followed by an increase in bankruptcies again, but in January this year the number of
bankruptcies reintroduced the downward trend again that started after the massive peak in
2013. In 2015 there were 5266 bankruptcies (excluding sole traders). Most bankruptcies were in
retail, construction, financial and business services 3
The top 3 reasons for bankruptcy, as mentioned in 2012
by liquidators of a company in the Netherlands is 4 :
1. Mismanagement and lack of vision
2. Bad economic times
3. Poor financial planning/overview
When it comes to business survival rates during the first five years, it really depends the sector.
Between 38% and 83% is still up and running a business after 5 years. The lowest percentage
represents the retail sector and the highest percentage represents agriculture and horticulture. 5
2
http://www.ine.es/jaxiT3/Tabla.htm?t=3169&L=1
3
http://www.ondernemersfacts.nl/index.php/cbs-het-aantal-faillissementen-blijft-dalen/
https://www.cbs.nl/nl-nl/nieuws/2016/02/ruim-een-vijfde-minder-bedrijven-failliet-in-2015
4
http://ondernemerschap.panteia.nl/main/pressrelease/perid/656
5
http://www.ondernemersfacts.nl/index.php/fact-overlevingskansen-starters-verschillen-stevig-per-sector/
17

Restarters
There are not so many restarters after bankruptcy. In the Netherlands there is a stigma on
business failure. When you go bankrupt in the Netherlands, it is not easy to continue your
career as an entrepreneur. A business bankruptcy usually means the end for entrepreneurs. 60%
stops the self-employment. 40% has the desire to continue, but only half gets it actually done.
One of the reasons for this is the reluctance of banks to provide capital to entrepreneurs who
have failed. The financiers see the failure as an incapacity or misbehaviour of the entrepreneur
and thus as a major risk factor. Another barrier for a second chance is the fact that there is not
a maximum for the completion of bankruptcy and debt settlement. As long as the bankruptcy
is running, the entrepreneur is not allowed to establish a new business.
This is really a shame because the survival chance of a restarter is significantly higher in
comparison with a starting entrepreneur. 80% of the restarters survive the first 5 years. This is
probably due to the ‘learn from failure’ effect 6 .
Latest policy developments: prevention
The Dutch government makes it legally possible that judges can already appoint a liquidator
in an earlier stage, before the actual bankruptcy. The earlier the liquidator is involved in this
process, the better the preparations are and the bigger the chance is to save/restart the company.
This method is also called pre-pack. In order to encourage entrepreneurs to look for timely
help and support, the government is working on regulations that facilitate the reorganisation,
restructuring or restarting of a business 7 .
18

BUSINESS FAILURE/SECOND CHANCE IN BULGARIA
The performance of Bulgarian SMEs since 2008 has been mixed as stated in 2015 SBA Fact
Sheet for Bulgaria 8 . They are estimated to have returned to pre-crisis levels of value added in
2014, but have not recovered jobs lost during the crisis: employment in SMEs in 2014 stood 7%
below the 2008 level. Forecasts predict a further 5% increase in value added and a moderate
1% rise in employment until 2016. A positive trend is the fact that the number of business startups
exceeds the number of business closures in Bulgaria between 2007 and 2013 although the
economy went through a major contraction e.g. in 2013 there were 38013 business start-ups
and 27560 business closures. The pick of bankrupt companies was in 2013 being 1285 and
going down in 2014 to 661 and nearly the same figure in 2015.
Main reasons for bankruptcy in Bulgaria are:
1. Poor cash-flow management
2. Economic crisis reflecting in high intercompany liabilities
3. Law level of innovation in companies and law efficiency
The sectors mostly affected by the downward economic trends are construction, transport
of cargo, textile and furniture. The value added industries such as ICT, pharmaceuticals and
outsourcing are the ones with most success in their economic performance.
According to 2015 GEM Report 9 in the European context, Bulgaria’s indicator fear of failure is at
par with the Netherlands. Bulgaria has lower fear of failure than Greece, Romania, Croatia, FYR
Macedonia, Ireland, and Germany - at 33.3%. It is very important indicator as fear of failure can
be a serious cultural and social impediment for entrepreneurship.
6
http://www.bc.nl/kennispartners/atradius/artikelen/debiteurenbeheer/32287-Kunnen-ondernemers-leren-van-een-fail
lissement.html
http://www.deondernemer.nl/weblogs/item/het-hardnekkige-taboe-op-bedrijfsfalen/
http://www.unizo.be/nieuws-pers/herstarters-na-faling-steunen-niet-stigmatiseren
7
https://www.rijksoverheid.nl/actueel/nieuws/2014/06/27/kabinet-bevordert-doorstart-onderneming-na-faillissement
8
file:///C:/Users/Gery/Downloads/bulgaria_en%20(3).pdf
9
http://www.gemconsortium.org/report/49480
19

“In Bulgaria, there seems to be a high status attached to entrepreneurship 71.5% - we rank #20
in the world, but we are not seeing this translate into growing numbers of new and established
businesses. It is critical that we get the enabling framework for entrepreneurship right to allow
untapped entrepreneurial potential to emerge.”, 2015 GEM Report concludes.
Bulgaria’s SBA profile shows improvements are needed in number of areas. It scores below
average among others also on ‘second chance’, ‘responsive administration’, skills & innovation,
environment and internationalisation. Bulgaria continues to provide worse-than-average
conditions for restarting business activity, mainly due to the lengthy procedure for closing
unsuccessful businesses. The indicators available showed no change from 2013. It takes 3.3
years to wind down an unsuccessful business in Bulgaria, about 1.3 years longer than the EU
average and almost three years longer than in Ireland, the EU leader in this category. The cost
consumed around 9 % of the debtor’s estate, slightly less than the EU average.
The degree of public support for granting honest, failed entrepreneurs a second chance slightly
exceeded the average. No significant policy measures were put in place since the SBA was
adopted in 2008, which means none have been introduced during the reference period. Bulgaria
has not addressed any of the SBA’s recommendations in this area. The authorities should consider
taking measures to tackle judicial bottlenecks and ensure timely and predictable insolvency
proceedings.
20

SECOND CHANCE FOR ENTREPRENEURS IN EU POLICIES - CURRENT STATE
The ENTREPRENEURSHIP 2020 ACTION PLAN 10 considers support of second chance entrepreneurs
as one of the measures in Action Pillar 2 “Create an Environment where Entrepreneurs can
flourish and grow”.
‘
Turning failure into success: second
chances for honest bankrupts
The Comission launched public consultations so as to receive views from stakeholders on
the issues identified in the Communication on a new European approach to business failure
and insolvency, including on giving honest bankrupts a second chance and on shortening and
aligning the “time to discharge”.
The Member States were invited to:
• Reduce when possible, the discharge time and debt settlement for an honest
entrepreneur after bankruptcy to a maximum of three years by 2013.
• Offer support services to businesses for early restructuring, advice to prevent
bankruptcies and support for SMEs to restructure and re-launch.
• Provide advisory services to bankrupt entrepreneurs to manage debt and to facilitate
economic and social inclusion and develop programmes for ‘second starters’ for
mentoring, training and business networking.
‘
10
https://ec.europa.eu/growth/smes/promoting-entrepreneurship/action-plan/
21

Still the Measures in the Action Plan are not really turned into actions. The area of ‘Second
Chance’ is subject to research in Europe. The most important EU policy documents, according
to performed research, are::
1. European Commission, Business Dynamics: Start-ups, Business Transfers and Bankruptcy
“The economic impact of legal and administrative procedures for licensing, business
transfers and bankruptcy on entrepreneurship in Europe.”, Final Report, Brussels 2011
2. European Commission, Internal Market, Industry, Entrepreneurship and SME website 11
3. COM (2012) 795 COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS ENTREPRENEURSHIP 2020 ACTION PLAN
Reigniting the entrepreneurial spirit in Europe
4. European Commission “Report on the results of public consultation on The
Entrepreneurship 2020 Action Plan 12
5. COM(2012) 742 “A new European approach to business failure and insolvency 13
6. COMMISSION RECOMMENDATION of 12.3.2014 on a new approach to business failure
and insolvency 14
7. Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on preventive restructuring frameworks, second chance and measures to increase
the efficiency of restructuring, insolvency and discharge procedures and amending
Directive 2012/30/EU
An important highlight, presenting the way of perceiving the restart of enterprises is included
in the “Small Business Act” 15 . The document aims to improve the overall policy approach
to entrepreneurship, to irreversibly anchor the “Think Small First” principle in policymaking
from regulation to public service, and to promote SMEs’ growth by helping them tackle
the remaining problems which hamper their development. It puts in place for the first time
a comprehensive policy framework for the EU and its Member States through a set of 10
principles to guide the conception and implementation of policies at both EU and Member
State level. The second principle states Ensure that honest entrepreneurs who have faced
bankruptcy quickly get a second chance”
22

The recommendations of EU experts summarized in COMMISSION RECOMMENDATION
of 12.3.2014 on a new approach to business failure and insolvency are important
while formulating policies for support pf second chance entrepreneurs. The objective
of this Recommendation is to encourage Member States to put in place framework that
enables the efficient restructuring of viable enterprises in financial difficulty and give honest
entrepreneurs a second chance, thereby promoting entrepreneurship, investment and
employment and contributing to reducing the obstacles to the smooth functioning of the
internal market.
By reducing those obstacles, the Recommendation aims in particular to:
(a) lower the costs of assessing the risks of investing in another Member State,
(b) increase recovery rates for creditors, and
(c) remove the difficulties in restructuring cross-border groups of companies.
The Recommendation provides for minimum standards on:
(a) preventive restructuring frameworks; and
(b) discharge of debts of bankrupt entrepreneurs.
When implementing this Recommendation, Member States should be able to take appropriate
and efficient measures to ensure the enforcement of taxes, in particular in cases of fraud, evasion
or abuse.
Very important step made by the European Commission towards preventive restructuring is the
development of new approach for early restructuring formulated in “Proposal for a DIRECTIVE OF
THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on preventive restructuring frameworks,
second chance and measures to increase the efficiency of restructuring, insolvency and discharge
procedures and amending Directive 2012/30/EU - COM(2016) 723 from November 2016.
11
http://ec.europa.eu/growth/smes
12
http://www.docfoc.com/final-report-pub-cons-entr2020-ap-en
13
http://ec.europa.eu/justice/civil/files/insolvency/06_commission_insolvency_communication_en.pdf
14
http://ec.europa.eu/justice/civil/files/swd_2014_61_en.pdf
15
http://ec.europa.eu/growth/smes/business-friendly-environment/small-business-act/index_en.htm
23

What will the new approach and rules improve?
Early warning
Early
Restructuring
Breathing
space before
enforcement
Minority
creditors
Access to
financing
Current situation today
There are few early warning tools
alerting debtors to the risk of
insolvency and the urgency to act in
order to avoid liquidation.
A lack of early restructuring
procedures or inefficient procedures
forces companies into formal
insolvency proceedings.
It is not possible to restructure a
business before insolvency is already
declared in several EU countries.
In others, restructuring before
being insolvent is not often used,
as it is limited by very strict access
conditions.
Individual creditors can hinder a
restructuring procedure by seizing the
debtor’s assets as soon as the debtor
is in financial distress (race to grab),
leading to lower recovery for other
creditors and lowering the prospects
for successful restructuring.
Dissenting minorities of creditors can
unfairly obstruct the restructuring
process (hold-out).
Although access to fresh money is
vital for the rescued company, new
financing for companies in the process
of early restructuring is not sufficiently
encouraged or protected in most EU
countries.
With the new rules
✓ Debtors will have access to early
warning tools, which can detect a
deteriorating business and lead to
more restructurings at an early stage.
✓ A new culture of preventive
restructurings can develop
✓ Viable enterprises in financial
difficulties will have access to early
restructuring, wherever they are
located in the EU
✓ The debtor will benefit from a
time-limited ‘’breathing space’’ from
enforcement action in order to
facilitate negotiations and successful
restructuring. As overall recovery
rates increase in a restructuring
scenario creditors profit as well.
✓ Dissenting minority creditors and
shareholders can be outvoted under
strict conditions in order not to
jeopardize restructuring, while
safeguarding their legitimate interests
✓ New financing will be specifically
protected increasing the chances to
make the restructuring successful.
24

Court
proceedings
Discharge
period
Current situation today
In many countries, there are lengthy,
complex and costly court proceedings.
procedures and reduce their cost and
length.
Discharge periods range from 1 to 10
years . They often require repayment
of a certain percentage of debts which
makes the debt discharge impossible
for many entrepreneurs who cannot
ensure this partial repayment.
With the new rules
✓ Flexible preventive restructuring
frameworks will shorten court
proceedings. Where necessary, the
courts must be involved to safeguard
the interests of stakeholders.
✓ The use of specialised practitioners and
courts as well as purpose built
technology will improve the efficiency
of insolvency
✓ Honest insolvent entrepreneurs will
have access to full discharge of their
debt after a maximum period of 3 years
without further conditions. There will
be adequate safeguards to prevent
abuse.
THE PROCESS TO SET UP
RESTART ENTREPRENEURSHIP ALLIANCE
STEP-BY-STEP IMPLEMENTATION GUIDE
The Alliance development is an ongoing process from formation to implementation, maintenance
and achievement of goals. The process is not linear and rigid but flexible and repetitive, thus
continuous monitoring on the latest development on policy and industry level is needed to
secure the Alliance effectiveness.
What is the Regional Alliance development?
For the purpose of the Alliance development, the current policies/programs related have to
be outlined. Each country has specific policies/strategies and/or programs encouraging and
supporting failed or about to fail entrepreneurs. The knowledge about current and future
policies/strategies/ programs will contribute to the most effective Alliance establishment and
achievement of goals set.
Who is a stakeholder?
Actors (persons or organizations) who have a vast interest in the policy that is being promoted
are considered stakeholders in the process. These stakeholders or “interested parties” for the
second time entrepreneurs are grouped into the following categories: public and private VET
providers, HEIs, small business associations, chambers of commerce and other key stakeholders
from local, regional and national governments, others.
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Which stakeholder characteristics are analyzed?
Characteristics such as knowledge of the policy, interests related to the policy, position for or
against the policy, potential alliances with other stakeholders, and ability to affect the policy
process (through their power and leadership) are analysed.
While there are several benefits of collaborating with the different stakeholders, like all
relationships, there are also challenges. One way to support the development of effective
Alliances and overcome these challenges is to have a Framework for interaction.
Benefits
The main benefits of collaborating with the different stakeholders are to:
• gain a greater understanding of respective needs
• obtain advocacy support to shape policy and increase awareness with regards to
second time entrepreneurs
• share skills and expertise
• gain access to information and data
• secure funding and resources.
Challenges
Common challenges of collaborating with the different stakeholders are:
• differing expectations or goals
• external changes and influences that impact the Alliances
• working within local laws and regulations
• public opinion and scrutiny.
What are the steps in Restart Entrepreneurship Alliance?
The following are the major steps in the process:
3 Planning the process
3 Defining the region
3 Identifying key stakeholders
3 Identifying current policies/programs/strategies
3 Establishment of Partnership
The subsequent sections of this document describe each of these steps in terms of suggested
actions and tools to be used to develop RESTART Entrepreneurs Alliances.
26

STEP 1: PLANNING THE PROCESS
This is the contemplative stage. It is characterized by the development
and gathering of collective insights.
Mutual need
Vision
Mission
Value systems
Inclusion
Wavelength
Interdependence. We need each other to accomplish a task.
What does the Alliance, wish to accomplish? Vision guides the
Alliance mission, protocols, and constitution.
How and in what ways is the Alliance going to accomplish its task?
Do the stakeholders, value similar things in the same way
and to the same extent?
What kind of stakeholders do we require as future partners?
Are we all on the same “wavelength”?
Simple language Are we all “speaking the same language”?
Cultures
Are there differences in the working cultures of our potential partners
Useful tools:
• Identify the stakeholders.
• Communicate with them.
• Set meetings.
• Identify if all potential stakeholders are represented?
• Do any of the potential stakeholders have any previous experience of working together?
• Are there any historical or traditional barriers between the potential stakeholders?
• Is any jargon or technical language used that could be a barrier?
• How do stakeholders feel about establishing a partnership?
• Are there any barriers to developing a common vision?
For the identification of the stakeholders it is very useful to create a database of institutions/
organisations/people/experts who could contribute to the cause of the Alliance. The stakeholders
– the skeleton of the Alliance can be legal experts on bankruptcy, policy makers, media, academics,
enterprise chambers, entrepreneurs associations, representatives of bank associations, national/
local/regional authorities, business clusters, second chance entrepreneurs, etc.
27

STEP 2: DEFINE THE REGION
When thinking about the starting of the Second Chance Entrepreneurs Alliance one has to take
into account the actual purpose of the Alliance and the identified needs for supporting second
chance entrepreneurs. It is both reasonable and fits new European Policies on entrepreneurship.
A very important aspect is then taking into account the regional specific.
One has to answer the following questions:
- What is actual situation of entrepreneurs that failed in business in our region?
- Which obstacles are the most severe in our country/region (economic, legal, social or other)?
- What actions should be undertaken to actually support entrepreneurs who
want to start over? What resources are needed for these actions?
The RESTART Alliance region may be regarded as a regional or national initiative depending on
the administrative characteristics of each country.
The regional approach has significant advantages when considering second time entrepreneurs
support. In the arena of second chance entrepreneurs, it is easier to gain a site locator’s attention
by promoting a regional area. Developing new policies, however is better to be on national
level. Both can be used when developing a RESTART Entrepreneurship Alliances as soon as the
main tasks of the partnership can be achieved.
28

STEP 3: IDENTIFY KEY STAKE HOLDERS
In order to address key project objectives and develop a sound Second Time Entrepreneurship
Alliance to be able to change and influence policies in their region the list of stakeholders should
include range of private / public sector stakeholders such as central / local Government, local
economic development and VET organizations who have responsibility for entrepreneurship
development, business incubation, financial institutions, legal experts, and so forth.
Important questions to be answered for key stakeholder identification
1. Who are the key stakeholders in relation to RESTART Enterpreneuship goals?
2. What is their role in relation to RESTART Enterpreneuship?
3. What is their level of power/influence? (i.e. prioritise the stakeholders)?
4. What relationships/links exist between the key stakeholders?
5. What are the main policies for each of the stakeholders?
6. What consequent programmes have been developed for each stakeholder/policy?
7. What type of organisation is each programme aimed at?
8. What is their perceived level of success?
9. What are the policy gaps in relation to RESTART Enterpreneuship?
10. What are the programme gaps in relation to RESTART Enterpreneuship?
11. Are there any duplication in the key stakeholders’ roles, policies and programmes?
Some possible roles of the identified stakeholders are:
- National/Local/regional authorities and Banks: to be more open and taking into account
second chance entrepreneurs not only start-ups, open the financial resources for second
chance entrepreneurs (nowadays second chance entrepreneurs do not get funds to get
back on market because they have already got finances for that and “wasted” a chance).
- VET providers/ trainers- change the attitude to people who failed – encourage those
people to take action once again.
- Policy makers/ support organizations / Chambers of commerce and other associations
of professionals - talk loudly more about second chance entrepreneurs.
- Universities: main stress on the knowledge of failure, stop discussing only about the
success, perhaps introducing a course on failures and positive outcomes of failures.
29

- Individuals concerned with the issue, e.g. university professors specializing in
business failures, bankruptcy, start-up, restarts, etc.
- Entrepreneurs who faced failure but still managed to come back in business and
now are ready to share their experience and knowledge.
A summary of the key stakeholders, together with an overview of their roles in policy
formulation and programme development and implementation and impact on creation of
Second Time Entrepreneurs environment will be presented in a table. The table where the
stakeholders identified as having a medium to high impact at a policy and programme level
is presented in Toolkit Resource Chapter
To ensure that your effort is valued in the community, consider inviting (or solicit input from)
key external representatives from:
• Community officials
• Businesses or corporations
• Nonprofit organizations or foundations
• Other groups (e.g., business support organzations, umbrella organzations,
legal advisors, others)
30

STEP 4: IDENTIFY CURRENT POLICIES/PROGRAMS/STRATEGIES
AND POSSIBLE GAPS AND NEEDS
At this stage of the process a mapping exercise will be executed, using secondary sources, to
identify current policy and programmes in relation to support of second chance entrepreneurs,
to identify the main stakeholders, and to identify gaps in policy and support, legal and financial
obstacles for succesful restart of failed enterpreneurs.
Important action are the consultations in each region with a range of stakeholders, including
policy makers from Government agencies, policy influencers from business support organizations,
educational institutions and training providers, and with a number with enterpreneurs at risk.
Secondary sources
A number of Government, research and market reports are constantly developed about the
entrepreneurship and entrepreneurs at risk at regional, national and European levels. A template
of secondary sources is developed and presented in Toolkit Resource Chapter.
This contains possible sources of useful information at a regional, national and international
level. Project partners are asked to develop their templates according to reports that have been
carried out by Government Departments, regional development agencies, trade bodies, VET
organizations and so forth in their country/region. The purpose of the secondary sources is to
identify sources of information which are useful and also to highlight policy/programme gaps.
For instance, what information is currently not available? Project partners are also encouraged to
highlight some statistics from the sources to give as comprehensive as possible understanding
of the second time entrepreneurship strategies in their region.
Since second chance entrepreneurs are identified as a serious problem in many EU countries
a large number of reports have been carried out by Government Departments, researchers
and other bodies business support organizations. When conducting the desk research it is
important to focus on reports and surveys that highlight the key issues and opportunities that
will impact on the second chance entrepreneurs topics over the next 3-5 years.
31

STEP 5: ESTABLISHMENT OF THE ALLIANCE
This stage of the process is characterized by the institutionalization of the effort. It concerns all
the formalities connected with formalizing the alliance. According to the laws of each country
and particular needs, a legal form of the alliance should be agreed. It may be an agreement
between parties or even a more formalized form (e.g. an association). In any case, agreements
and commitments are necessary.
Important when establishing the partnership:
Scope and view of the Alliance Are the objectives of the Restart Alliance many and
overwhelming or few and manageable?
Representation
Priorities
Accountability
Rules, roles,
responsibilities, and duties
Communication
Have we contacted as many agencies, constituencies,
and organizations as we think necessary to solve the problem?
What are the priority issues and concerns that are common
to all participants in the partnership?
To whom are we accountable? Our organizations, the
community and general public, the SMEs, others?
All require clarity and may need to be written down.
How are we going to have timely, consistent, useful, and
comfortable communication that meets our needs?
For communication, see Communication Chapter in
this Toolkit.
Once stakeholder’s needs and benefits are identified, a standard letter of invitation should be
elaborated, which can be also used while contacting them (see the Toolkit resource for a draft
letter). Those stakeholders that are considered to be crucial for the success of the alliance should
be contacted in person; a great support tool in convincing the stakeholder to consider joining
the alliance is the elaborated Power Point presentation included in the Toolkit Resources.
Other potential stakeholders may be contacted simultaneously by e-mail and by phone.
Considering the specific of e-mails being overwhelming, there should always be a phone
contact, as there is a wide tendency of ingoing unwanted/unexpected e-mails.
32

Frame the alliance
After contacting the potential stakeholders, a great effort should be made to organize a first
meeting for framing the alliance. After this meeting each potential stakeholders will decide
whether to join the alliance or skip this activity.
In order to maintain the desired stakeholders and increase their willingness for joining the
alliance, the first meeting should be organized in an open form; each stakeholder should be
able to share opinions and thoughts on the issue. Again, a special attention should be paid to
fulfilling the stakeholders needs (of course while keeping in mind the purpose of the RESTART
ENTERPRENEURSHIP ALLIANCE).
The presence of second chance entrepreneurs who faced failure but still managed to come back
in business would be of great support while achieving the goals of the Alliance. A real story told
by a real person always makes the impression.
There are three important tangible results that should be achieved in this stage:
1. Inputs from stakeholders about the specific aims and organization of the future alliance
2. Stakeholders should be convinced that supporting second chance entrepreneurs is both
an important issues and the issue worth investing time in.
3. Preliminary commitment to alliance should be made by stakeholders by signing the
letter of intent of creating the alliance
Useful tips:
• Establish communication channels.
• Ensure the free flow of information.
• Revisit representation.
• Adjust structure and management of the Alliance.
• Monitor the formal and informal power-bases.
• Hold social events.
• Attempt to secure long-term financial commitments.
33

COMMUNICATIONS
What’s in this section?
• Communicating information to second chance entrepreneurs and Alliance stakeholders
• Communicating with the media
• Case study
• Resources and further information
Communicating is important to: provide information to second chance entrepreneurs to
encourage them and to convey Alliance advocacy messages through the media. This section
provides tips on the different approaches to be used to communicate information and messages
to these two groups.
Communicating information to second chance entrepreneurs
This section outlines issues for Alliance stakeholders and others, to consider when developing
educational information for second chance entrepreneurs. Finding good quality information
from the many sources available can be a challenge, and second chance entrepreneurs do not
always know where to start.
Communicating with the media
The media is an important resource for the Alliance to communicate with a wide audience of
entrepreneurs, the general public and decision-makers. Communicating with the media can
help the second chance entrepreneurs to:
• Promote a success story
• Press decision-makers into action to improve the environment for second
chance entrepreneurs
• Obtain the interest of high-profile supporters
• Raise awareness of a new discovery, announcement or project
As an organization, the Alliance needs to progressively build your media relations by staying in
regular contact with journalists and publications. Make sure the Alliance has something relevant
and important to say so journalists know that speaking to the Alliance is a valuable use of their
time. A variety of approaches can be used, such as working on exclusive stories with particular
journalists, or releasing information to a list of press contacts.
34

Consider with which media the Alliance needs to connect.The general public to raise awareness
can be targeted through general newspapers, magazines, websites, radio and television at local
and/or national levels, all of which are part of the mass media. Business magazines, journals and
websites are part of the specialized press and can help the Alliance reach entrepreneurs and the
“interested parties”.
Learn to think in terms of an editor’s needs
An editor is the person who decides what goes into the media and ensures that stories are
covered. This means that to promote a story, you must understand what the specific publication
needs. When thinking in terms of an editor’s needs, you should consider the following points,
relating to both print and online media:
• How far in advance are stories commissioned?
• Always think in terms of what is new, different, exciting and timely - why should the
story appear in the press now rather than next month or in six months’ time?
• Is the story of interest to the general pages of a newspaper or might it be more
suitable for the specialist pages? There are often different editors for each section.
Communicating with the right editor can make the difference whether your story
runs or not
• Have you got spokespeople who can be interviewed and tell a good story?
Make your message count
The following points should be considered to make sure you maximize the impact of your story:
• Ensure your message is very clear and put succinctly.
When you are communicating, make sure you repeat your message at different times
• If writing a press release, always use an informative short title and put the crucial,
most important, most attention-grabbing information first (often editors will only
skim the first paragraph when considering whether to use your story)
• In order to clarify your message, ask yourself the following questions:
- Why is this story important?
- What will happen if the public do not hear about the story (the wider significance)?
- Why is your organization the expert organization in the field?
- How will this finding or announcement affect people’s lives?
- Who in your organization can speak about the topic from an informed position?
- What would you like to achieve with broadcast or publication of this message?
- What is the headline you would like to see or hear?
- Are you avoiding jargon and ensuring that the story is easy to understand?
35

RESOURCES AND TIPS
To facilitate the process of establishment and run RESTART Entrepreneurship Alliance a set of
document templates are provided and can be used as helpful resources.
The templates include:
• Power Point presentation to be used during the meetings with stakeholders participating
in the partnership
• Concept partnership meetings and draft agenda
• Action plan template
• Practical examples of alliances
• Pledge card
36

ADDED VALUE OF THE ALLIANCE
A RESTART Entrepreneurship Alliance (REA) has many characteristics and requires tailored
solutions for the different Regions and combines the local expertise of each REA member with
excellence in entrepreneurial support.
Well-established and highly motivated Alliance will ensure local expertise and input due to:
• Reached agreement on common actions for supporting second chance
entrepreneurs operating in each Alliance to guarantee relevant policy implementation.
• Ease of contact and communication by development of a collaborative IT and
educational platform enabling all involved parties to share expertise, knowledge
and services and learn from other’s people experience
Through setting up of Strategic Alliances which bring together public and private VET providers,
HEIs, small business associations, chambers of commerce and other key stakeholders from
local, regional and national governments we:
Work to support high-growth entrepreneurship by being more acceptive of firm failure and
bankruptcy, and reducing the economic and social costs that go with them
Bring together all the aspects economic, legal and social of second chance entrepreneurs
Share resources among VET organisations to provide training with main focus on “Restart: the
Value of Starting Over”
Generate regional Action Plans committing each stakeholder to individual and collective activities
to create a more enabling environment for professional development of second time entrepreneurs.
37