Financial bootstrapping in small businesses

Winborg, Joakim; Landström, Hans

doi:10.1016/s0883-9026(99)00055-5

Cited by 411 publications

(99 citation statements)

References 5 publications

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“…In sum, we could corroborate the insights from Storey (1994) and Winborg and Landström (2001) that place emphasis on the fact that obtaining equity and debt financing are key difficulties for SME. Furthermore, 'poor market conditions' (cases 2, 3, 5, 6, and 8) as well as 'strong competitiveness' (cases 1, 4, 5, and 7) were the determinants mostly cited by the correspondents.…”

Section: External Factorssupporting

confidence: 75%

“…Financial capital is convertible into other types of resources and, for that reason, the most general kind and the basis of other resources (Dollinger 1999). Obtaining equity and debt financing seem to be two of the major difficulties SME face and impose severe restrictions on their development (Storey 1994;Winborg and Landström 2001;Brown et al 2005).…”

Section: Theoretical Frameworkmentioning

confidence: 99%

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Failure factors in small and medium-sized enterprises: qualitative study from an attributional perspective

2009

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The objective of this study is to identify factors for poor performance and failure faced by small and medium-sized enterprises (SME) and to investigate a potential bias between real causes and attribution for stranding. In order to achieve this objective, we have adopted entrepreneurial personal story explorations in eight Portuguese SME. Our research reveals that the most important factors are limited access to finance, poor market conditions, inadequate staff, and lack of institutional support, as well as co-operation and networking. Hereby, at a first glance, external factors were more often cited, but qualitative analysis revealed that internal factors are imminent and not satisfactorily recognized. Even though some owner-managers showed a certain awareness regarding their internal weaknesses, many problems such as lacking strategy and vision, low educational levels, and inadequate social capital are not sufficiently recognized. Therewith, we found a strong attribution error when SME owner-managers judge the causes of their ventures' unsuccessful performance and failure. Finally, we draw conclusions and suggestions for policymakers, small business owners, consultants, and researchers.

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Section: External Factorssupporting

confidence: 75%

Section: Theoretical Frameworkmentioning

confidence: 99%

Failure factors in small and medium-sized enterprises: qualitative study from an attributional perspective

2009

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“…One common bootstrapping approach espoused by women entrepreneurs is to use customers to finance operations (Brush et al ; De Silva and Nishantha ). Customer financing enables the business to receive a cash advance from customers who pre‐order the product or service offering of the company (De Silva and Nishantha ; Winborg and Landstrom ). As such, the business develops its product/service offering as economically as possible and turns to the customers for immediate revenues (Bhidé ; Brush et al ; De Silva and Nishantha ).…”

Section: Literature and Hypothesis Developmentmentioning

confidence: 99%

Customer Orientation and Performance of Women‐Owned Businesses: A Configurational Approach

Neneh

2019

Journal of Small Business Management

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The present research aims to improve the current understanding of the relationship between customer orientation and performance of women-owned businesses. This study proposed that risk-taking and financial capital are vital moderating factors of this relationship. Additionally, the study postulates that new insights can be unearthed by combining these factors with customer orientation in a three-way interaction model. Using a sample of 264 women entrepreneurs, the results showed that (a) customer orientation is positively associated with the performance of women-owned businesses, (b) the association is significantly moderated by both risk-taking and financial capital, and (c) a more detailed understanding of the association is provided by the three-way interaction of customer orientation, risk-taking, and financial capital.

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“…Companies that face financial crises, e.g., are more inclined to develop formal types of collaborative activities to gain better access to critical resources (Pfeffer & Salancik, 1978). However, empowered boards can be a costly alternative for resource-constrained small companies and, if not an absolute necessity, there may be more appealing alternatives for how to handle the company's need for resources (Winborg & Landström, 2001). Indeed, the resource dependency perspective argues that managers in general try to acquire resources without creating difficult dependencies (Pfeffer & Salancik, 1978), and small companies with financial difficulties who have not already empowered the board of directors may therefore avoid a solution that they may be stuck with for a long time ahead.…”

Section: Resource Dependency Theory and Board Empowerment In Small Comentioning

confidence: 99%

Correlates of Board Empowerment in Small Companies

Gabrielsson

2007

Entrepreneurship Theory and Practice

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This study seeks to advance the understanding of board empowerment in small companies. Predictions based on agency and resource dependency theories were used to examine how contingency factors correlate with board empowerment, in this study conceptualized as a larger number of board members, a higher representation of outside directors, and separate CEO and board chair positions. Statistical analyses on a sample of 135 small companies gave ample support for the agency-theoretic prediction that board empowerment in small companies is a response to satisfy the demands from owners not directly involved in managing the company. Other factors influencing board empowerment were younger CEOs, high degree of exports, and past poor company performance. The influence of these contingency factors, however, was not as strong and extensive as the presence of outside owners. The article ends with a discussion of the findings and their implications for understanding boards and governance in small companies.

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Financial bootstrapping in small businesses

Cited by 411 publications

References 5 publications

Failure factors in small and medium-sized enterprises: qualitative study from an attributional perspective

Failure factors in small and medium-sized enterprises: qualitative study from an attributional perspective

Customer Orientation and Performance of Women‐Owned Businesses: A Configurational Approach

Correlates of Board Empowerment in Small Companies

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