Rural entrepreneurs: what are the best indicators of their success?

Abstract

Purpose New small businesses are the cornerstone of many small rural communities. They provide needed products and services, new opportunities for employment, and general vitality. The economic impact these businesses have on their town and county are important indicators of an area’s success. The purpose of this paper is to examine newly started small businesses that are within three or four years of age or less, and examine factors that may have led to their success or failure. Here, sources of advice, means of financial support, and background experience of the firm’s founder have been found to be correlated with the business success. Design/methodology/approach The analysis using Probit regression yielded four models wherein female owners, family help with a business and Hispanic ownership had significant models predicting performance all of these were negative relationships. The factors correlated with business success as proposed are presented. Of course correlation does not imply causation, which means that the authors cannot be sure that a factor that is associated with business success will lead to business success. But, this is an important first step in determining whether there are significant differences between successful and unsuccessful businesses. Findings The findings showed that experience with previous business ownership had a distinct impact and the marketing efforts were also important for profitability. The other factors were not significant. A second phase to the analysis using Probit regression yielded four models wherein female owners, family help with a business and Hispanic ownership had significant models predicting performance all of these were negative relationships. This represents the difficulties that are encountered with these groups in garnering the support and financial means they need to succeed. It was also interesting that the use of a business plan did not help the businesses succeed. Research limitations/implications Using a Probit Regression and χ2 analysis of the data is the most appropriate and accurate analysis for a date set of this type. There is much more to be accomplished with rural entrepreneurship and the use of these techniques would be appropriate for this type of data. Practical implications Business plans are important for the business founder to predict potential costs and profits. In this study however, the authors did not find that having a business plan differentiated business’s performance. If it can be replicated, it will be important to find out what is unique about rural areas that lead to this finding. If business plans do not help, then what type of preplanning will help? If this finding is correct, business development agencies may wish to cut back resources devoted to writing a business plan, and devote them to other areas. Being a member of business network group also is not associated with business success. Social implications The growth of rural entrepreneurial businesses is well documented. These businesses provide many social impacts to the local community not only by providing products or services need but also by providing employment. This research is imperative to providing the best success plan for these businesses as the proliferate. Originality/value There has been very little research on rural entrepreneurship. This study takes a unique look at a rural community and the success or failure of their businesses over a one-year period when most small businesses succeed or fail. There is much more to be done on examining the tools they need to be successful.

Rural Development

“…In some rural and peripheral communities, employment relies primarily on natural resources, particularly agriculture, which have undergone structural adjustments and major markets, resulting in job losses and increased dependence on welfare transfers [22]. On the other hand, research on rural entrepreneurship, although limited [23], has shown that rural environments offer natural conditions and opportunities in which rural businesses can prosper [24].…”

Uma Análise dos Fatores Críticos de Sucesso dos Negócios de Impacto Socioambiental aplicados ao Agronegócio: Um estudo multicasos

“…Com base nos trabalhos de Sharir & Lerner (2006), Wronka (2013) e Eschker et al (2017), foi possível agregar os FCS conforme disposto no Quadro 2. Procurou-se também explicar na segunda coluna o racional por trás da junção dos fatores apresentados anteriormente.…”

El Efecto Del Desarrollo De Planes De Negocio en Las Actitudes E Intenciones Emprendedoras De Los Estudiantes

“…Sin embargo, aunque desarrollar un BP es el tema y método de enseñanza más popular en los cursos de emprendimiento ofrecidos por colegios y universidades, no hay una evidencia sólida de su importancia para el éxito del emprendedor (Furr, 2012;Honig, 2004;Solomon, 2007). Por el contrario, una creciente evidencia sugiere que, a pesar del gran énfasis por los académicos, este no se relaciona con el éxito, pudiendo ser una pérdida de tiempo (Furr, 2012;Eschker, Gold, & Lane, 2017). Lange et al (2007), no hay diferencias en el desempeño de las nuevas empresas que inician con o sin un BP, y a menos que un emprendedor necesite financiamiento de alguna institución no existe otra razón para escribirlos antes de emprender.…”