Psychological Capital, often shortened to PsyCap, refers to a blend of four psychological components: hope, optimism, self-efficacy and resilience (Luthans et al. 2007:161). Together, these elements shape how individuals deal with challenges, perform at work and stay mentally well. In both organisational psychology and entrepreneurship studies, PsyCap has been widely used to understand performance under pressure. It has been linked to lower stress, higher engagement and better outcomes in work and start-up settings (Alessandri et al. 2018:33; Nair, Prasad & Nair 2022:3293).

That said, the way resilience fits into the PsyCap model has drawn some criticism. There is a growing argument, also reflected in this study, that resilience might not belong to the same category as the other three. Instead of being an internal trait like hope, optimism and self-efficacy, resilience may be better viewed as an outcome that results from internal psychological strengths. Avey et al. (2011:127) and Newman et al. (2014:120) both point out how factors outside the individual, such as networks, social support and resources, also help build resilience.

The entrepreneurial mindset includes a mix of traits, habits and ways of thinking that help individuals spot opportunities and move ideas forward. Baron (2004:221) links it to characteristics like optimism, creativity, risk tolerance and the ability to solve problems (Vinsensius & Ryandra 2024:36). More recent work broadens the picture. It shows that flexibility, confidence and persistence also matter, especially in settings where things change quickly or resources are scarce (Hölzner & Halberstadt 2023; Larsen 2022:236; Liao et al. 2022:23).

This mindset is not fixed. It grows through experience, learning and exposure. Bernardus et al. (2023:106) and Zappe, Cutler and Gase (2023:3) show that education, especially when focused on real-world entrepreneurship, can help young people develop this mindset. A recent South African study further reinforces this by showing that entrepreneurial education significantly shapes youth entrepreneurial intentions, emphasising their role in developing a proactive entrepreneurial mindset (Mhlongo, Ntshangase & Ezeuduji 2025:a982). In Kenya, Mwihaki Githinji and Ngugi (2022:71) found that the way youth handle financing decisions says a lot about how they apply their mindset, especially in running and growing micro- and small enterprises. In The Gambia, this way of thinking is even more critical due to weak institutions, unpredictable finances and limited access to entrepreneurial tools.

The entrepreneurial mindset does not just prepare people to act; it also helps them cope. Those who score high on this mindset are usually more resilient and better equipped for long-term decisions. Mohapeloa (2017:645) noted how building this mindset helped entrepreneurs in South Africa strengthen both resilience and strategic thinking. Similarly, Asenge, Diaka and Soom (2018:124) found that when Nigerian entrepreneurs are more open to risk and innovation, their businesses perform better, strengthening the role of mindset in evolving business acumen. In The Gambia, Manneh et al. (2020) showed that students with strong entrepreneurial attitudes were more likely to start ventures, even with few resources. These studies all point to the same idea: mindset shapes both resilience and strategic aptitude. Consequently, the subsequent hypotheses are proposed:

Business acumen is the skillset that helps entrepreneurs make sound decisions, understand markets and align resources with goals (Smart & Conant 1994:28). It is less about personality and more about action, things such as financial know-how, practical thinking and reading trends (Grilli 2022:662; Jawo et al. 2025).

In the REMI framework, this skill set plays a special role. It turns mindset into action. It is not enough to be optimistic or opportunistic; entrepreneurs need to do something with that energy. Those who understand the numbers, study the market and adjust their plans quickly are often better at staying afloat in tough conditions. This is especially true in places where formal structures are weak, and uncertainty is constant. Meyer (2022:68) showed that women running small businesses in South Africa were more likely to succeed if they had a strong handle on planning and strategy.

Other studies confirm the same. Entrepreneurs with stronger business acumen tend to last longer, pivot faster and bounce back more easily (Hizam-Hanafiah, Yousaf & Usman 2017:556; Zelenka & Podaras 2021:67). In Sub-Saharan Africa, Adu-Gyamfi et al. (2022:167) found that business acumen helped entrepreneurs move between informal and formal sectors with more confidence, making them more resilient in unstable settings. Grounded on this basis and supporting evidence, the resulting hypothesis is projected:

Resilience means the ability to adapt to adversity, adjust when things go wrong and stay engaged despite setbacks. In entrepreneurship, especially in unstable or resource-constrained settings, it is often the difference between survival and failure. Chadwick and Raver (2018:233) describe it as both mental and emotional, the ability to keep functioning when things go sideways. Sharma and Rautela (2022:1369) and Muthee et al. (2023:4707) add that it also involves innovation, having a support system and navigating barriers that are sometimes bureaucratic or cultural.

This study advances a theoretical shift by treating resilience as a behavioural outcome, rather than a static psychological trait in the PsyCap framework. This shift fits with what Avey et al. (2011:127) and Newman et al. (2014:S120) argued that resilience grows from both cognitive orientation and strategic capabilities. That is how this study builds on the PsyCap model by focusing on resilience as a product of internal and external strengths employed together.

The REMI model connects entrepreneurial traits and PsyCap theory to explain how resilience is built. It posits that having the right entrepreneurial mindset is a starting point, but that the outcome of resilience depends on how that mindset is channelled through learned skills, meaning the entrepreneurial mindset will better affect resilience through acquired or developed skills.

This paper focuses on one piece of that model: the pathway that runs from entrepreneurial mindset, through business acumen, to resilience. That is where the study found statistical support, and that is the part used to explain how entrepreneurs build resilience in difficult settings. In this view, business acumen acts as a decoder, helping turn thought into action, especially under pressure.

Rørth (2020) describes business acumen as a mix of knowledge, skills and decision-making ability that allows an entrepreneur to turn intent into impact. Fatoki (2018), conducted a study on South African small and medium-sized enterprises (SMEs), emphasising the importance of entrepreneurial resilience and underscoring the need for entrepreneurs to develop competencies that will enable them to effectively manage adversity. Based on this consolidative assessment, the next hypothesis is predicted:

Drawing from the reviewed literature, the following hypotheses are proposed and tested in this study:

As shown in the conceptual framework developed for this study in Figure 1, Business Acumen mediates the nexus between entrepreneurial mindset and resilience. This framework reflects the adapted pathway of the broader REMI model and serves as the basis for the study’s hypotheses and empirical analysis.

This study adopted a quantitative research design using a cross-sectional approach. The rationale for using this design is to allow data collection from a large number of respondents at a single point in time to statistically test the hypothesised relationships among the variables. Given that the study seeks to test causal mechanisms (i.e. mediation), a survey method was deemed appropriate, which is in line with prior research in entrepreneurial cognition and strategic behaviour (Hair et al. 2017).

The study was conducted in The Gambia, a small West African country with a growing population of youth entrepreneurs. Respondents were drawn from key entrepreneurship support institutions, including the Gambia Chamber of Commerce and Industry (GCCI), Gambia Youth Chamber of Commerce (GYCC), Gambia Investment and Export Promotion Agency (GiEPA) and the Startup Incubator Gambia. These institutions offer entrepreneurship training, incubation and funding support, making them suitable platforms for reaching active youth entrepreneurs.

The target population comprised young entrepreneurs aged 18–35 years who own and manage micro- and small-scale businesses across various sectors in The Gambia. The accessible population comprised approximately 400 registered youth entrepreneurs aged 18–35 years, based on institutional lists obtained from GCCI, GYCC, GIEPA and Startup Incubator Gambia. A stratified random sampling technique was used to ensure representativeness across three regions, which are Banjul City, Kanifing Municipality and the West Coast Region. These areas were selected due to their commercial significance and the presence of high concentrations of active youth entrepreneurs across varied sectors. They also offer reliable access to institutional records, enabling the use of a finite population sampling frame. Stratification was based on region and institutional affiliation, followed by random selection from institutional lists. A total of 400 youth entrepreneurs in the sampling frame were contacted through institutional partner databases. Of these, 203 completed the questionnaire, resulting in a response rate of 50.75%. Sample adequacy was confirmed using Yamane’s (1967) formula, which recommended a minimum of 200 participants for a population of 400 at a 5% margin of error. Partial Least Squares Structural Equation Modelling (PLS-SEM) guidelines (Hair et al. 2021) also require at least ten responses per indicator; with 12 indicators, a minimum of 120 responses were necessary. The final sample of 203 therefore exceeds both criteria.

Primary data were collected using a structured, self-administered questionnaire developed to measure the core constructs: entrepreneurial mindset, business acumen and resilience. Each construct was operationalised using multi-item reflective scales, with five-point Likert responses ranging from 1 ‘Strongly Disagree’ to 5 ‘Strongly Agree’. The questionnaire was pre-tested with 30 entrepreneurs to ensure clarity and reliability. Cronbach’s alpha values from the pilot test exceeded 0.80 for all constructs, confirming internal consistency. Data were collected over a 4-month period, from November 2024 to March 2025, utilising an online survey managed through Google Forms with assistance from institutional gatekeepers to distribute the survey link to eligible respondents. Previous studies have endorsed Google Forms as a dependable tool for online surveys with good response rates (Mukherjee 2023). Entrepreneurial mindset was adapted from Baron (2004:221) and Liao et al. (2022:23), covering proactive orientation, opportunity recognition and risk tolerance. Business acumen was derived from Grilli (2022:662), focusing on strategic decision-making, financial literacy and commercial awareness. Resilience was adapted from Luthans, Vogelgesang and Lester (2006:25) and Chadwick and Raver (2018:233), capturing adaptability, persistence and recovery from adversity.

The study employed PLS-SEM using SmartPLS 4.0 to test the proposed hypotheses and mediation model. Partial Least Squares Structural Equation Modelling is appropriate for predictive models and complex mediation analysis, particularly with small to medium sample sizes. The data were screened for missing values and outliers before running the analysis. Bootstrapping with 5000 resamples was used to assess the significance of path coefficients and mediating effects. Constructs were evaluated for reliability and validity through Cronbach’s Alpha, Composite Reliability (CR), Average Variance Extracted (AVE) and Discriminant Validity (using the Fornell-Larcker criterion and Heterotrait-monotrait Ratio of Correlations [HTMT]).

Ethical clearance was obtained from the Institutional Review Board of Universitas Brawijaya (Approval No: 00054/UN10.F0221/B/PP/2024). Participation was voluntary, and digital informed consent was obtained before beginning the survey. Respondents were assured of confidentiality, and no identifying information was collected. The data were anonymised and used solely for academic purposes.

The reliability, convergent validity and discriminant validity of the constructs were evaluated using established PLS-SEM criteria. All latent variables were modelled reflectively.

All constructs demonstrated strong internal consistency reliability as shown in Table 1. Cronbach’s Alpha values exceeded the minimum threshold of 0.70: entrepreneurial mindset (0.786), business acumen (0.840) and resilience (0.795). Composite Reliability values were also satisfactory, ranging from 0.861 to 0.893. The AVE for each construct was above 0.60, confirming convergent validity as shown in Table 1.

Table 2 shows that the outer loadings of all indicators surpass the 0.70 benchmark, indicating that individual items reliably represent their latent constructs. For example, business acumen items loaded between 0.801 and 0.845, entrepreneurial mindset between 0.758 and 0.821 and resilience between 0.743 and 0.843.

Discriminant validity was measured utilising the Fornell-Larcker criterion, which compares the square root of the AVE for each construct with its correlations with other constructs. For each construct, the square root of the AVE is greater than its correlation with any other construct. For instance, the square root of the AVE for Business Acumen is 0.822, which is higher than its correlation with entrepreneurial mindset (0.694) and resilience (0.767). Similarly, resilience has a square root of AVE of 0.788, which is higher than its correlation with business acumen (0.767), whilst entrepreneurial mindset has a square root of AVE of 0.780, which is slightly below its correlation with resilience (0.821). However, this small difference is considered acceptable in the context of strong theoretical support and the overall reliability and validity of the model. These results confirm that the constructs are sufficiently distinct from one another.

The structural model was assessed by inspecting the path coefficients, coefficients of determination (R²) and predictive relevance (Q²). These metrics reflect the SEM tested in this study to contextualise the mediation model analysed in this study.

Figure 2 presents the tested structural model, illustrating the path coefficients and explanatory power of the proposed relationships. Results of the SEM-PLS analysis showing t-values from bootstrapping (5000 subsamples). All paths are statistically significant at p < 0.001.

The R² values in Table 3 indicate the variance explained in the endogenous constructs: Business Acumen (R² = 0.481) and Resilience (R² = 0.749). The R² value of 0.749 reflects that the path from entrepreneurial mindset to resilience via business acumen elucidates a substantial portion of the variance in resilience alone. This supports the relevance of business acumen in resilience building among youth entrepreneurs.

Using blindfolding procedures, Q² values were computed: Business Acumen (Q² = 0.317) and Resilience (Q² = 0.457). All Q² scores are above 0, providing an indication that the experiential values are reconstructed, and therefore, the model demonstrates predictive relevance. (Ringle, Wende & Becker 2022). Therefore, these results confirm the model’s predictive accuracy and reinforce the theoretical strength of the business acumen path.

A sub-sample bootstrapping with 5000 was used to test the significance of direct and indirect effects. All relevant path coefficients in the business acumen model were statistically significant.

Three direct paths were evaluated, and as displayed in Table 4: Entrepreneurial Mindset → Business Acumen (β = 0.694, t = 14.967, p < 0.001), Business Acumen → Resilience (β = 0.380, t = 6.389, p < 0.001) and Entrepreneurial Mindset → Resilience (β = 0.557, t = 9.675, p < 0.001). The significance of all paths supports the theoretical position that the entrepreneurial mindset not only directly enhances resilience but also fosters the development of business acumen, a critical enabler of strategic adaptation and sustainability.

The key hypothesis of this study was that business acumen mediates the relationship between entrepreneurial mindset and resilience. The bootstrapped indirect effect, as shown in Table 5, is: EM → BA → R: β = 0.264, t = 5.618, p < 0.001. This confirms partial mediation, meaning that the entrepreneurial mindset affects resilience both directly and indirectly through business acumen.

The Variance Accounted For (VAF) for this mediation was calculated as: VAF = Indirect Effect / Total Effect; VAF = 0.264 / (0.264 + 0.557) = 32.2%. Since VAF is between 20% and 80%, this constitutes partial mediation, aligning with the theoretical framework of the REMI model, where psychological traits are translated into resilient outcomes through strategic capability.

The analysis confirms that business acumen has a statistically significant mediating role in the relationship between entrepreneurial mindset and resilience. All hypothesised paths were supported at the 0.001 level. The high explanatory power (R² = 0.749) and predictive relevance (Q² = 0.459) all indicate that the model is robust. The results strengthen the argument that cognitive entrepreneurial traits like mindset require strategic enablers such as business acumen to foster resilience, especially in fragile entrepreneurial environments such as The Gambia.

This study intended to investigate the mediating role of business acumen in the relationship between entrepreneurial mindset and resilience among young entrepreneurs in The Gambia. Drawing on the Psychological Capital (PsyCap) framework and a sub-path of the REMI model, the results offer strong empirical support for this focused mediation pathway.

All hypothesised relationships tested in this sub-model were statistically significant. The entrepreneurial mindset positively influenced both business acumen and resilience directly. More importantly, business acumen was found to significantly mediate the relationship between entrepreneurial mindset and resilience, with a VAF of 32.2%, confirming partial mediation. Whilst the entrepreneurial mindset exerts a direct influence on resilience, the mediation examination demonstrates that business acumen plays a matching role by partially transmitting this effect. The presence of both direct and indirect effects illustrates the layered nature of entrepreneurial resilience, particularly in challenging environments like The Gambia.

Though the broader REMI model included additional mediators, such as Passion and Persistence, only the Business Acumen pathway demonstrated statistical significance. As a result, this article narrows its focus to that specific path to maintain conceptual clarity and empirical precision.

These findings affirm the theoretical proposition that strategic capabilities, namely business acumen act as cognitive-behavioural enablers through which psychological traits such as proactivity, self-efficacy and opportunity orientation are translated into resilient entrepreneurial behaviour. Grilli (2022:662) concurs with the view by highlighting business-related competencies as key drivers of effective entrepreneurial action, whilst Janeska-Iliev, Debarliev and Cvetkoska (2023) indicate that resilience is often developed through the application of learned competencies rather than merely through inherent personality traits. Hence, these findings not only contribute to the literature on entrepreneurial resilience but also empirically validate one key pathway in the REMI model, highlighting business acumen as a central channel through which entrepreneurial mindset enhances resilience. Future research can expand this model by exploring the conditional or moderated roles of other REMI constructs, such as Passion and Persistence.

This study was conducted using data from 203 young entrepreneurs affiliated with four national entrepreneurship support organisations. The sample was representative across gender, age, education and experience. The use of stratified random sampling, combined with rigorous SEM-PLS analysis, ensures that the findings are not only statistically robust but also contextually grounded.

However, it should be noted that this study selectively reports and interprets the business acumen pathway, the only significant mediation path, as a deliberate focus for theoretical and practical relevance. This approach is both methodologically sound and strategically valuable for deep theoretical development.

Limitations include:

From a policy perspective, business acumen should be treated as a development lever. Governments and donor agencies often invest in digital skills, coding or financial literacy but neglect entrepreneurial strategy. This study suggests that targeted public investment in strategic entrepreneurship training, for instance, tax breaks for completing certified business acumen courses or grants tied to practical training outcomes, can foster more resilient micro- and small enterprises.

Future research should consider longitudinal studies to reveal the ways business acumen develops over time and its impact on resilience at various business stages, such as start-up, growth and scale. Further studies are required to identify how the effects of contextual aspects such as gender, digital skills competencies, industry and access to finance mitigate the association between business acumen and resilience. Future research may also focus on what circumstances underlie the significant role of passion, persistence or other contextual factors, such as environmental support or digital capability, on resilience. Lastly, future studies can be developed to confirm or refute the capability of the business acumen pathway to replicate in other sub-Saharan African countries, or its context-specificity, and what are the most effective types of business acumen-building educational interventions and their contribution to the long-term sustainability of entrepreneurship.