Business Strategy
Small Businesses Survival and Success: An Exploration of Socioeconomic Motivators and Restraints

Article Details
Pub. Date : Dec' 2020
Product Name : The IUP Journal of Business Strategy
Product Type : Article
Product Code : IJBS11220
Author Name : Manoj K Sharma and Poonam Sharma
Availability : YES
Subject/Domain : Strategic Journals
Download Format : PDF Format
No. of Pages : 18

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Abstract

The purpose of the study is to understand the segment of businesses which are neither part of the informal sector nor covered under government definitions of SMEs. This segment falls somewhere in between these two. This study examines their socioeconomic motivators which encouraged them to choose and continue in small business activities. Factors restraining further growth have also been explored due to which they fail to rise and come under SMEs definition. Nineteen Likert-style statements were used to determine the start-ups' socioeconomic motivations. This study revealed that socioeconomic factors like the need to provide financial support to family, government policies and perceived alternative employment opportunity significantly affect the decision to undertake small business and later performance of the business. Also, respondents reported many factors which they perceive to have led to the stagnant growth of their businesses. The findings of the present work can be used as a reference to work out policies to encourage self-employment. Small business owners too can benefit by being aware of the problems or barriers which normally come and halt the expansion plans. Also, the study contributes to small business literature in the form of motivators and restraints which affects the seedbed of entrepreneurship directly.


Description

The significance of small businesses and entrepreneurs is immense for almost all economies. The importance of this sector has been discussed in many studies (Cromie, 2000; and Reddy, 2007). The vitality of this sector calls for investigation into the factors and restraints which may provide a boost or discourage this sector (Wennekers and Thurik, 1999; Mehralizadeh and Sajady, 2005; and Wiklund and Shepherd, 2005). These small businesses are considered as a seedbed of entrepreneurial activities. The small businesses can be the vehicle for both Schumpeterian entrepreneurs which produce the products and processes that change the whole industry and who just own and run a business for earning livelihood (Wennekers and Thurik, 1999).

It is normally argued that self-employment is an outcome of certain push and pull factors (Kirkwood, 2009). These push and pull determinants of business start-ups along with short-term and long-term success of small businesses have been an extensive area of research (Mehralizadeh and Sajady, 2005). But, it is also a fact that very few businesses rise in comparison to the number of businesses existing in the so-called seedbed of entrepreneurship. These


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