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Defining success in subsistence businesses

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  • Toledo-López, Arcelia
  • Díaz-Pichardo, René
  • Jiménez-Castañeda, Julio C.
  • Sánchez-Medina, Patricia S.
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    Abstract

    Subsistence entrepreneurs play an important role in developing economies by forming small businesses that represent a way of life, providing employment at the base of the pyramid and contributing to the alleviation of poverty. The definition of success for subsistence businesses has not yet been well established in SMEs literature, in which success is related to financial measures. However, not all businesses can be measured with the same indicators of success. Financially-oriented measures of success may not always be appropriate for assessing socially embedded businesses. This paper begins to address this gap by assessing how subsistence entrepreneurs themselves define and achieve business success. For this exploratory research, in-depth interviews were conducted with eighty-five subsistence entrepreneurs. Discriminant function analysis typified five subsistence business groups: family-limited businesses, motivationally limited businesses, past boom businesses, followers, and leaders. Several factors separate the business groups, including the education and complacency of the entrepreneur, sales revenue, long-term business plans, acceptance of technology, growth intentions and commercialization into international markets. In contrast, socio-cultural attributions such as family value, goals, and motivation to get into and stay in business represented commonalities between subsistence businesses in terms of their definitions of success.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Research.

    Volume (Year): 65 (2012)
    Issue (Month): 12 ()
    Pages: 1658-1664

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    Handle: RePEc:eee:jbrese:v:65:y:2012:i:12:p:1658-1664

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    Web page: http://www.elsevier.com/locate/jbusres

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    Keywords: Subsistence business typologies; Entrepreneurs; Business success; Artisanal businesses;

    References

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    1. Marco Gelderen & Roy Thurik & Niels Bosma, 2005. "Success and Risk Factors in the Pre-Startup Phase," Small Business Economics, Springer, vol. 24(4), pages 365-380, 05.
    2. Shivani, Shradha & Mukherjee, S.K. & Sharan, Raka, 2006. "Socio-cultural influences on Indian entrepreneurs: The need for appropriate structural interventions," Journal of Asian Economics, Elsevier, vol. 17(1), pages 5-13, February.
    3. London, Ted & Anupindi, Ravi & Sheth, Sateen, 2010. "Creating mutual value: Lessons learned from ventures serving base of the pyramid producers," Journal of Business Research, Elsevier, vol. 63(6), pages 582-594, June.
    4. Fairlie, Robert W. & Robb, Alicia, 2008. "Gender Differences in Business Performance: Evidence from the Characteristics of Business Owners Survey," IZA Discussion Papers 3718, Institute for the Study of Labor (IZA).
    5. Viswanathan, Madhu & Rosa, José Antonio, 2010. "Understanding subsistence marketplaces: Toward sustainable consumption and commerce for a better world," Journal of Business Research, Elsevier, vol. 63(6), pages 535-537, June.
    6. Ted London & Stuart L Hart, 2004. "Reinventing strategies for emerging markets: beyond the transnational model," Journal of International Business Studies, Palgrave Macmillan, vol. 35(5), pages 350-370, September.
    7. Toledo, Arcelia & Hernández, José de la Paz & Griffin, Denis, 2010. "Incentives and the growth of Oaxacan subsistence businesses," Journal of Business Research, Elsevier, vol. 63(6), pages 630-638, June.
    8. John Victor Mensah & Michael Tribe & John Weiss, 2007. "The small-scale manufacturing sector in Ghana: a source of dynamism or of subsistence income?," Journal of International Development, John Wiley & Sons, Ltd., vol. 19(2), pages 253-273.
    9. Angela Tregear, 2005. "Lifestyle, growth, or community involvement? The balance of goals of UK artisan food producers," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(1), pages 1-15, January.
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