The question of ‘what drives success in business’ is still an essentially open question in the literature on entrepreneurship and innovation. It is thought that many resources contribute to entrepreneurial success, including technical knowledge, entrepreneurial acumen, professional and business networks, and market conditions. In fact, it is not yet clear that there is a causal relationship between entrepreneurial acumen and company success. Many of the emerging models of business education, especially entrepreneurship and business management courses, are based on the belief that providing entrepreneurs with business knowledge and management tools can give them ‘added value’ by increasing the likelihood of business success and positive business outcomes (in terms of sales, profits or number of employees).

The literature on business education and training indicates heterogeneous and often modest effects on business performance. McKenzie and Woodruff (2023) emphasise that interventions in microenterprises, which predominate in developing countries, tend to show limited improvements in profits or sales, although there is a slight improvement in management practices and the aspirations of managers. Approaches such as self-starter training have been shown to be effective for entrepreneurs in subsistence contexts (Campos et al., 2017), while programmes such as the Kaizen model are more promising in slightly more advanced small industries (Higuchi et al., 2015). Not surprisingly, this evidence highlights the need for training programmes that are tailored to the specific characteristics of companies and their contexts.

The context of the study differs from much of this literature. The participating companies were on average larger than the microenterprises described in McKenzie and Woodruff (2023), given that they employ multiple workers and operate in a more formal manner. Furthermore, the study was conducted in Portugal, a high-income country where market conditions and barriers to business growth are very different from those in emerging markets.

By focusing on small and medium-sized enterprises (SMEs) and using a randomised control trial (RCT) methodology, the research aims to contribute to the literature by rigorously evaluating the effectiveness of a management training programme. The goal of which is to provide entrepreneurs with management tools and soft skills. In particular, an attempt will be made to identify the main barriers to the growth of SMEs in the Portuguese context, whether these are internal (related to logistical or financial organisation issues), external (related to marketing and internationalisation issues), or related to leadership (leadership skills, people management, and expectations and aspirations of the business leader).

Managers who participated in the training programme saw an increase on average in their personal net income and also in their company’s turnover and workforce in the year immediately following the programme.

A significant increase in the number of employees was observed in 2023, as reported by administrative data (obtained from SABI). This growth caused by the programme was statistically significant in SMEs that participated in the training programme in general and was particularly important in SMEs that were part of the Strategy, Marketing and Internationalisation group.

This increase can also be seen in the survey data, which, although noisier, indicate an increase in the number of employees in all training groups.

Although growth in turnover, added value and assets is still observed on average, the small sample size does not yet allow us to confirm with statistical certainty that the programme had a positive impact on these variables.

The survey data showed that the training programme led to an overall increase in the net personal income of the managers who participated. This effect was statistically significant for managers who took the Finance, Accounting and Operations Management, and Leadership and People Management courses, although it was not statistically significant for managers who took the Strategy, Marketing and Internationalisation training course.

On average, the training programme also led to statistically significant growth in the annual turnover of participating SMEs. This increase was particularly significant for SMEs in the Finance, Accounting and Operations Management group. It is too early to conclude that the programme had an impact on company turnover for the other groups.

Significant positive results were observed in the acquisition of skills by the training participants. 

A key point in consolidating the idea that training has a positive impact on SMEs is to understand whether there has actually been an acquisition of knowledge by managers as a result of their participation in the programme.

With this in mind, the surveys included a number of questions formulated by the trainers of each course that related to their contents in order to evaluate the acquisition of knowledge by the managers who participated in the programme. The aim was to understand whether those who attended a particular course had a higher level of knowledge on the topics covered.

All participants were specifically asked questions about the contents covered in each of the groups: Finance, Accounting and Operations Management; Leadership and People Management; and Strategy, Marketing and Internationalisation. The expectation was that managers who had participated in each of the training groups would be better able to answer questions related to the topic of their course. 

For example, they were asked about the effects of an increase in the company’s working capital requirements. As expected, the results showed that the managers who attended the course where this topic was covered, who were part of the Finance, Accounting and Operations Management group, provided significantly more correct answers than the other managers (both those who made up the other groups and those who did not participate in the training). 

Similarly, when they were asked about effective approaches to internal communication of significant or strategic changes, a topic covered in the Leadership and People Management group, the results showed that managers who had attended the training course were more likely to answer this question correctly (compared to those who had not). Managers in the Leadership and People Management group were also more likely to correctly answer the question about ‘what to do’ in a negotiation to maximise own profits.

Nonetheless, when examining the questions that the managers who attended the Strategy, Marketing and Internationalisation training course would theoretically be better qualified to answer in this area, it can be seen that there is still a lot of noise in these data. It cannot therefore be guaranteed that the acquisition of knowledge during the programme was as effective for this group as for the others. 
 

The positive effects of the training programme on management practices were concentrated in the Finance, Accounting and Operations Management group. The aspirations of managers improved on average as a result of the programme.

One of the goals of this study is to understand whether the various components of business administration courses help to improve management practices and the aspirations of managers. In fact, these two indicators are among the most studied in the literature on education, human capital and management capacity. The follow-up surveys therefore included questions adapted from the scientific literature in this area to identify differences in management practices (Bloom and Van Reenen, 2007, 2010 and McKenzie, 2017), as well as questions on the aspirations of managers.

There is still a lot of noise in the effects of the programme on the aspects related to management practices, so it is too early to draw detailed conclusions. For now, it is possible to say with some precision that the programme has had a statistically significant impact on increasing the frequency with which SMEs participating in the Finance, Accounting and Operations Management course conduct formal performance appraisals of employees. On average, some evidence was found of a significant impact of the programme overall.

There also appears to be a positive impact on average of the programme on employee promotions: suggestive evidence exists that SMEs that received training in the Finance, Accounting and Operations Management group are more likely to base employee promotions on performance and skills than SMEs that did not receive the training.

The same seems to be true for the actions taken when a problem is detected in the production process (for example, defects in the product or service provided, quality problems or out-of-order machines) by the managers of the Finance, Accounting and Management course. However, given the size of the sample, the same positive effect cannot be found when looking at the other training courses, in which the effects of this aspect are not statistically significant. 

In terms of the aspirations of managers, the results are generally relatively noisy and should be interpreted with some caution. 

In any case, managers who participated in the training programme have higher aspirations for their personal income: on average, the participants in the programme would like to have a net personal income per month in 5 years that is 10% higher than that desired by those who did not participate in the programme. Similarly, participation in the training programme appears to have increased the salary expectations of the managers who participated. This increase in expectations is more pronounced for managers who took the Finance, Accounting and Operations Management, and Leadership and People Management courses, while the increase in aspirations is greater for managers who took the Leadership and People Management course.

In terms of desired turnover (aspirations) within 5 years, only managers who participated in the Finance, Accounting and Operations Management course showed an increase on average in desired turnover as a result of the training. Nonetheless, the hypothesis that the training had no effect on this aspect still cannot be rejected. Similarly, there seems to have been an increase in expectations of the company’s turnover within 5 years, although this increase is not statistically significant. 

The aim of this study is to measure the impact of a business management training programme aimed at equipping SME owners/managers in Portugal with the hard and soft skills they need to grow their businesses. Its initial hypothesis is that a programme that can develop the skills of SME managers can make a difference and increase their growth and productivity.

The design of the study also seeks to understand which skills are most important for the development and growth of a business and its manager: Finance, Accounting and Operations Management; Leadership and People Management; and Strategy, Marketing and Internationalisation. Based on the existing literature, and in order to gain greater adherence and interest from the participants, three different courses were created that highlighted these skills.

Following the implementation of the courses, the participants were asked to respond to a number of questions about the course topics, management practices and aspirations. The results obtained from these regular surveys, together with administrative data on the performance of the companies concerned, indicate that SMEs whose managers participated in the management training programme have experienced an increase on average in their personal net income and also in the turnover and number of employees of the companies they run. These effects are more pronounced for SMEs whose managers received training in Finance, Accounting and Operations Management. The evidence shows that the changes observed in companies are due to the acquisition of knowledge by their managers, an improvement in management practices and an improvement in the aspirations of managers provided by the training programme. The results of the study suggest that empowering entrepreneurs can contribute to social mobility and inclusion.

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