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Relationship Between Bootstrap Financing, Number of Employees, and Small Business Success

Small business entrepreneurs face high failure rates, yet the success of local, state, and national economies relies on the success of small business. With a lack of capital commonly cited as a reason for failure, entrepreneurs must find ways to predict business survival. Grounded in pecking order and enactment theory, the purpose of this correlational study was to examine the efficacy of bootstrap financing and numbers of employees in predicting business survival, measured by the business age. The research question was answered by using a predictive correlational quantitative research method with a cross-sectional survey design. The central question was whether the amount of bootstrapping financing, measured by a bootstrapping survey, and numbers of employees significantly predicts firm success, measured by firm age in years. Study participants (n = 111) were owners of small businesses in the state of New Hampshire who had been in business for a minimum of 5 years. The results of the multiple linear regression analysis indicated that bootstrap use and number of employees did not significantly predict business survival. Results indicate support for the pecking order theory of financing with minimal evidence of entrepreneurs enacting their environment. The majority of entrepreneurs surveyed used at least one method of bootstrap finance to support the business. Bootstrapping methods with the highest rate of use were offering the same conditions of all customers, negotiating the best payment terms with suppliers, and buying used equipment over new equipment. The implications for positive social change include the potential to provide New Hampshire small business entrepreneurs with information for making informed financial decisions and creating financial models.

Identiferoai:union.ndltd.org:waldenu.edu/oai:scholarworks.waldenu.edu:dissertations-1470
Date01 January 2015
CreatorsSchofield, Robin Marie
PublisherScholarWorks
Source SetsWalden University
LanguageEnglish
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceWalden Dissertations and Doctoral Studies

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