The Startup Trap: Are we teaching young Ghanaians to start businesses but not to build them?
Entrepreneurship has gained popularity in recent times in Ghana, especially among the youths. Entrepreneurship workshops, business competitions, start-up boot camps and mentorship programmes have proliferated throughout the country. Youth are encouraged to come up with business ideas, to approach investors and make bold steps to become entrepreneurs. These efforts are commendable as they have enabled many young Ghanaians to find opportunities which they would have ignored. But there is one question we have not asked ourselves enough in the midst of these programmes: are we training young people to start businesses, or are we enabling them to build businesses that will survive over time, thrive and generate value? Entrepreneurship is a feat and to maintain a business needs another level of preparation, discipline and understanding.
Ghana’s employment situation is a factor that is not far-fetched in the rise of entrepreneurship. The Ghana Statistical Service estimates that the youth population (15-35 years old) constitutes about 36.9 per cent of the population. According to the labour force statistics for the first three quarters of 2025, the average youth unemployment rate was 21.9 per cent, while the national average was 12.8 per cent. Almost two million young people were not in employment, education or training by the third quarter of that year. These facts help to understand why entrepreneurship has entered the discussion on youth unemployment and economic growth. However, promoting youth self-employment can have a positive effect on short-term employment issues, but does not necessarily lead to successful business creation. It is important to understand that the formation of an entrepreneur and the development of a sustainable enterprise are two related but different goals.
This distinction is especially significant in the context of the structure of the Ghanaian business environment. The 2024 Integrated Business Establishment Survey (IBES) reveals that about 1.9 million business establishments exist in Ghana, of which about nine out of 10 are microenterprises. The survey also revealed that 92.3 per cent of establishments are informal. While informality does not necessarily mean failure, these figures do pose significant questions about enterprise development, productivity and growth. In fact, many small businesses are vital to the livelihoods of families and make a valuable contribution to local economies. But what is of concern is that many businesses are still very founder-dependent, lack systems and are not able to break out of the conditions they were founded under. Under these conditions, new business formation can boost economic activity but not improve the productive capacity of the economy.
Some of the difficulty might be in terms of the way that entrepreneurship is taught and supported. Many entrepreneurship programmes focus on business ideas, business registration, branding, pitching and access to funding for start-ups. These are all key components of business formation, but just a few of the many that are necessary for a thriving business. Someone can know how to pitch a great business concept without knowing how to keep inventory, manage customers and suppliers, or read a financial statement. Likewise, a company can get a lot of social media hype and yet not make enough money to cover the expenses. It is sometimes thought that after a young person has been trained as an entrepreneur and has had some start-up capital, the hard work is done. Experience suggests otherwise. In many instances, the true problems arise after the business is established, when the entrepreneur is required to make decisions on a regular basis in the face of uncertainty.
Let’s take a look at a young entrepreneur in Kumasi who makes and sells packaged food products. Assume that the selling price of each product is GH¢500 and ingredients, packaging and delivery cost GH¢85. The entrepreneur might consider the remaining GH¢415 as profit, but without taking into account electricity, rent, equipment maintenance and other running costs. Without better financial management, as sales grow, the business may find itself in greater financial trouble even though it is doing well commercially. This is a good example of one of the truths of business: growth is not just about sales. Entrepreneurs need to know their costs, cash flow, customer behaviour and the financial implications of expansion. A good business concept can turn out to be a non-starter if these skills are not present. It is not just about the amount of sales a business makes, but about how effective a business is in creating sustainable economic value.
However, it would be wrong to blame young entrepreneurs for this. The performance of a business is influenced by the internal and external factors that affect it. The World Bank’s Ghana Enterprise Survey, conducted from 2023 to 2024, surveyed 713 formal firms and identified issues of access to finance, taxation and the overall business environment. Its 2025 economic assessment also highlighted infrastructure, skills development and conditions for private investment as key areas for improvement. These factors are significant because even a well-managed enterprise can have difficulty when financing is costly, operating costs are uncertain or markets are limited. Entrepreneurship development should thus not be limited to a change in the mindset of the youth. It also needs to include better institutional and economic conditions that will guarantee the success of their businesses.
It is also necessary to rethink the concept of entrepreneurship education. It is one thing to teach someone how to recognise a business opportunity, but it is another thing to teach them how to be profitable from it. Young entrepreneurs must have knowledge of marketing, financial management, innovation, customer relations, leadership and strategic decision-making. They need to know what to do if customers’ tastes shift, if a rival offers a superior product, or if unexpected costs come into the picture. These capabilities cannot be created by a single workshop or a few workshops. They require practical experience, continuous mentorship and opportunities to learn from actual business challenges. In this regard, entrepreneurship support should not stop with the awarding of certificates or the start-up of businesses. This is where consistent coaching is most important.
This leads to another crucial point about the measurement of the success of entrepreneurship programmes. It’s quite easy to say that hundreds of young people have been trained, dozens of businesses have been registered, and several promising ideas have been funded. These are valuable accomplishments, but they don’t necessarily indicate what comes next. A more significant measure would be the number of businesses that are still in operation after one or two years, whether they have built up a loyal customer base, made a profit, created jobs or grown into new markets. It would also look into whether the participating entrepreneurs have improved in their resource management and decision-making. These indicators would give a clearer idea of the extent to which entrepreneurship interventions are indeed improving the enterprise landscape in Ghana.
But not all small businesses need to be big businesses to be successful. A small business that is able to satisfy customers’ needs, generate a steady income and provide decent jobs can make a significant contribution to the economy and society as a whole. The objective should not be to encourage growth for the sake of growth, but to ensure that entrepreneurs are able to develop businesses that are productive, resilient and able to achieve their desired aims. This involves a change of focus from the number of enterprises set up to the quality of enterprises developed. It also requires more inter-agency coordination and cooperation among government, financial institutions, universities, entrepreneurship hubs and private sector organisations to offer practical assistance to businesses beyond their start-up phase.
Maybe a more important point is that entrepreneurship is not synonymous with starting something. The reasons for starting may be enthusiasm, necessity or ambition, but the capacity to persist requires knowledge, discipline, adaptability and good judgement. Ghana has been making a lot of effort to motivate the youth to consider entrepreneurship as a means of economic independence. The challenge now is to turn this enthusiasm into enterprises that are able to compete, adapt to market changes and make a significant contribution to national development. Remember, the best part of a seed isn’t planting it; it’s being patient and caring so it grows. Ghana’s economy cannot be transformed by entrepreneurship unless we are as passionate about developing businesses as we are about encouraging people to start businesses.
BY DR BERNARD AGYEI ARYEE
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