The Intermingling of Business and Family Finances in Family-Owned Businesses

Abstract

This study uses data from a national survey of 673 business‐owning households to assess factors associated with intermingling business and family finances. Logit analysis indicates that the use of family resources in the business is more likely in sole proprietorships; when the business owes money to financial institutions; and when the business owner is older, more experienced, and without children in the household. Family use of business resources is more likely if the business is incorporated, is located in a rural area or small town, and borrows money.

Survival, Growth Strategies and Performance of Women Owned Micro and Small Businesses in Tanzania

“…Ha: Ownership of multiple enterprises has a positive effect on enterprises performance 2.1.2 Intermingling (non-separation) of business and household resources Studies on micro and small businesses report that comparable to men, women are more likely to not separate their business resources from household resources with a view to improving both the welfare of their businesses and households (Haynes et al, 1999). In this respect, resources will flow to either side depending on where they have the least opportunity cost or maximum use value (Haynes et al, 1999).…”

“…In this respect, resources will flow to either side depending on where they have the least opportunity cost or maximum use value (Haynes et al, 1999).…”

“…In exploring the reasons for intermingling of business and household resources, Haynes, et al (1999) find that intermingling of business and household resources is likely to be practised when the business owner is a sole proprietor and a borrower from financial institutions. In that regard, given that the majority of women are not propertied, they are likely not to separate their business resources from household resources to give them an advantage to use household resources as collateral.…”

“…In that regard, given that the majority of women are not propertied, they are likely not to separate their business resources from household resources to give them an advantage to use household resources as collateral. In particular, intermingling of business resources and household resources is practised as a survival and growth strategy; but also as a way of minimizing business operational costs (Haynes et al, 1999). Based on the discussion it is hypothesised that:…”

Organisational resilience following the Darfield earthquake of 2010

“…Organisation size has been implicated as an important predictor of organisational vulnerability in a number of studies (Audretsch, 1991;Alesch and Holly, 1996;Dahlhamer and Tierney, 1996;Alesch et al, 2001;Persson, 2004;Zhang, Lindell, and Prater, 2009), with smaller organisations experiencing greater failure rates. Small-to-medium-size enterprises (SMEs) tend to have limited capital reserves on which to draw following a disaster, and therefore are more reliant on alternative measures to maintain operations if revenue streams are disrupted (Haynes et al, 1999;Alesch et al, 2001;Webb, Tierney, and Dahlhamer, 2002). The age of an organisation also is a potential liability post disaster; as with SMEs, younger organisations frequently have limited capital reserves (Audretsch, 1991;Persson, 2004), fewer assets, and smaller networks from which to access resources.…”