Business growth is a good goal for most firms in general and is given great weight by the society. This could be seen with the list conjured up by the media, such as ‘Forbes Fast-Growing Companies’ and ‘Inc Fastest Growing Companies’ lists (Hupato 2011). The reason small firm growth has been prioritised by policy makers and the society is mainly due to its contribution to the economy (Bridge, O’Neill & Martin 2009). Small firm and entrepreneurship have so often been linked together, and it has become common to acknowledge that all small firms are established by entrepreneurs. Hence, the terms such as growth, success and performance are often linked in the research of entrepreneurial success (Reijonen & Komppula 2007). However, if entrepreneurship is defined as creation of new economic activity, the aspect of firm growth is already defined the moment the entrepreneur introduced new products or services (Davidsson, Achtenhagen & Naldi 2010). In other words, growth is not an aspect of entrepreneurship if growth is measured solely on volume expansion of existing products or through acquisitions of existing business. Schumpeter has also mentioned that one can be entrepreneurial without being self-employed and vice versa (Utsch, Rauch, Rothfufs & Frese 1999). Entrepreneurship remains an enigma till date and the assumption that all small firms are creations of an entrepreneur is arguable. Davidsson, Achtenhagen & Naldi (2010) has described, even a superficial reading on the complexity of small firm growth literature could easily leave the reader confused. Thus, the aphorism of small firm growth being the only measure of an entrepreneur’s success should be looked upon from different perspectives. The dimensions of small firm growth and also the perspectives of entrepreneurial success will be analysed to see the degree of its correlation and to judge how true the mentioned aphorism is. What is small firm growth?
Generally, growth of a business occurs in phases in a small business life cycle. A business venture would normally encounter three-stage development process, namely the ‘seed’ stage, the ‘start-up’ stage and the ‘expansion’ stage (Mukherjee 1992). The ‘seed’ stage brings a well-conceived idea into existence, while the ‘start-up’ stage included employment and accumulating business capital, and the ‘expansion’ stage involves manufacturing or service capacity increment (Mukherjee 1992). On the other hand, Bridge, O’Neill & Martin (2009) has suggested five stages of small firm growth, namely ‘existence’, ‘survival’, ‘success’, ‘take-off’ and ‘maturity’. Helms & Renfrow (1994) has supported the concept of the five stages of various developmental growth stages when they conducted a research in United States. Bridge, O’Neill & Martin (2009) defined the five stages as the following: the ‘existence’ stage is similar to the ‘seed’ stage explained previously, while the ‘survival’ stage involves customer familiarisation with the firm’s product or service. The ‘success’ stage is when there are options for further growth, thus the ‘take-off’ stage where the owner opted to grow the business larger. The business will reach the ‘maturity’ stage when it displays the characteristics of a large company. However, the mentioned researchers have concluded that it is difficult to clearly define the business development stages clearly during throughout the business cycle (Bridge, O’Neill & Martin 2009). Despite the challenging task to categorise growth, researchers would still generally use the small business growth as indicator of success since it is common parlance to suggest that success requires growth, to stand still is to die (Geneste & Weber 2011). There are enormous literatures on theories of growth and are most commonly associated with generation of jobs. In the early years, entrepreneurship has been the main focus due to its significant employment opportunities that was created. This...
References: Hupalo, PI, TiE Islamabad, 2012, ‘Measuring success in small business and entrepreneurship’, TiE Islamabad, 12 October 2012,< https://islamabad.tie.org/article/24/measuring-success-small-business-and-entrepreneurship>.
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