Perception of success and its effect on small firm performance

Abstract

PurposeThe purpose of this paper is to provide an insight into small firm entrepreneurs' perceptions of success and how these perceptions affect the performance of a firm. The emphasis is on non‐financial measures of success and their interaction with the financial indicators of a firm's performance.Design/methodology/approachThe paper presents a comparative analysis of two separate studies conducted in the same geographical area in Finland. The studies were concerned with micro‐businesses in the industries of craft and rural tourism.FindingsThe study finds that non‐financial meters of success that are affected by the entrepreneur's motivations and goals influence the financial performance of the small firm. Making a living is important, but going beyond that is not often seen of great concern. Consequently, the entrepreneurs are likely to measure their performance by other criteria and find success, e.g. in job satisfaction and satisfied customers.Research limitations/implicationsIn the data collection process, the used questions and themes were not identical. The main themes of performance, growth and success are, however, comparable.Practical implicationsThe paper provides useful information about small firm entrepreneurs' perceptions and attitudes of success and growth and how these affect the management of the firm.Originality/valueThis paper brings empirical evidence to the studies of factors affecting small firm performance. In addition, it offers useful insight into the non‐financial measures of success.

Towards a new framework for SMEs success: a literature review

“…Wijewardena and Cooray (1996) report that high-quality products are perceived by owners/managers as the second most important success factor in their business. Further supporting this finding, Reijonen and Komppula (2007) also argue that entrepreneurs measure their success primarily based on the quality of the product. McCormack (1989) further supports that one of the most important factors to a successful business is a commitment to quality which and identifies it as the only absolute competitive edge.…”

“…Scholars consistently argue that in order to be successful, organisations must ascertain the customer's needs and wants and then produce quality products and services to satisfy them while creating and maintaining long-term relationships (Berthon et al, 1999;Koy et al, 2007;Reijonen and Komppula, 2007). Good customer relationships and customer service are also found to be very important factors contributing to SME success (Ghosh and Kwan, 1996).…”

Entrepreneurial behaviour, firm size and financial performance: the case of rural tourism family firms

“…In this vein, more qualitative research was focused on exploring the entrepreneurial mind-set of rural tourism firms (e.g. Peters & Kallmuenzer, 2015;Reijonen & Komppula, 2007).…”

From Facilitated to Independent Tourism Learning Networks: Connecting the Dots

“…This review is therefore constructed reflecting an individual unit of analysis, wherein business ownership can be viewed as a learning experiment in and of itself (Choueke and Armstrong, 1998), resulting in a predisposition to learning when coupled with the enactment of the learning process (Kolb, 1984). Furthermore, these firms tend to have simple structures and management processes (Morrison and Teixeira, 2004), and the owner, who is often the sole decision maker (Reijonen and Komppula, 2007), applies a rapid response to issues that impact the business (AragonSanchez and Sanches-Marn, 2005). This environment presents opportunities for greater flexibility and the rapid application of learning and development in the business (Kelliher and Reinl, 2009;Van der Wiele and Brown, 1998), providing the entrepreneur with a relatively unique competitive tool when interacting with the open market.…”