A critical analysis of the influence of start-up factors in small businesses and entrepreneurial ventures in SA

Abstract

Purpose: This paper focuses on a critical analysis of the influence of start-up factors in small businesses and entrepreneurial ventures in Gauteng, a province in South Africa.

Problem investigated: Owing to the low economic growth, high unemployment, and an unsatisfactory level of poverty in South Africa, entrepreneurship becomes a critical solution for the starting and developing of small businesses. Although the South African Government are constantly improving in eliminating barriers to potential start-ups, South Africa's TEA is not up to standard if it wants to sustain economic growth rates that will create wealth for everybody. Various factors influence and play a role in the establishment and operation of small businesses and entrepreneurial ventures.

Design/methodology/approach: An ex-post facto, formal research design was used as respondents were requested to indicate on a four-point scale how important they deemed 37 items in a structured personal interview. A sample of 312 elements was included in the research. The data was analysed through a factor analysis and analysis of variance.

Findings: Four factors were identified that influence the start-up of small businesses and entrepreneurial ventures. They are: personal management and involvement; role models; effective time management; and support from partners and advisors. It is very clear that there is a definite difference in the needs and factors influencing: women and male entrepreneurs; the age of entrepreneurs and the stage of the business in its life cycle.Value of research: By analysing the factors that influence start-up, it can make potential entrepreneurs aware of theimportance of considering these factors in the start-up and growth of their businesses.

Conclusion: The findings of this research are in line with similar international research (Mazzarol et al., 1999 and Deakins & Freel, 2003) on various aspects influencing the start-up of businesses. Although a lot of support, education and training are given in South Africa, policy makers and educational institutions should take note of the various differences in needs and make provision in their support and training for these differences. It is also recommended that existing small business owners and entrepreneurs must create their own support structure specifically when they move from the start-up stage to the new firm stage, as this is a stage where support and advice is much needed.