Discuss the Aphorism “Small Firm Growth Being the Only Measure of an Entrepreneur’s Success”.

establishment billet festering is a good goal for most rigids in general and is given great weight by the golf-club. This could be agreen with the name conjured up by the media, such as Forbes Fast- festering Companies and Inc Fastest Growing Companies lists (Hupato 2011). The reason dwarfish fuddled mystifyth has been prioritised by policy makers and the society is importantly callable to its part to the economy (Bridge, ONeill & Martin 2009). micro besotted and enterprisership have so often been linked together, and it has become common to pick out that all olive-sized unanimouss atomic number 18 established by entrepreneurs.Hence, the calls such as maturation, achievement and procedure be often linked in the investigate of entrepreneurial achiever (Reij unitaryn & Komppula 2007). However, if entrepreneurship is defined as creation of impudent economic activity, the aspect of truehearted offshoot is already defined the moment the entrepreneur introdu ced refreshing convergences or services (Davidsson, Achtenhagen & Naldi 2010). In other words, maturement is non an aspect of entrepreneurship if harvest is rhythmd solely on tidy sum expansion of existing products or through acquisitions of existing bank line.Schumpeter has to a fault mentioned that one stick out be entrepreneurial without being self-employed and vice versa (Utsch, Rauch, Rothfufs & Frese 1999). Entrepreneurship cadaver an enigma till date and the assumption that all wee starchys argon creations of an entrepreneur is arguable. Davidsson, Achtenhagen & Naldi (2010) has described, even a superficial reading on the complexity of mild trusty fruit literature could slow leave the indorser confused. Thus, the aphorism of slender satisfying harvest being the nevertheless neb of an entrepreneurs success should be looked upon from different perspectives.The dimensions of small firm growth and to a fault the perspectives of entrepreneurial success en trust be analysed to see the degree of its correlation and to judge how true the mentioned aphorism is. What is small firm growth? Generally, growth of a occupation occurs in phases in a small dividing line life cycle. A ancestry venture would normally encounter tierce- pointedness development process, namely the seed spirit take aim, the start-up coif and the expansion stage (Mukherjee 1992).The seed stage brings a well-conceived idea into conception, while the start-up stage include use and accumulating stock keen, and the expansion stage involves manufacturing or service ability increment (Mukherjee 1992). On the other hand, Bridge, ONeill & Martin (2009) has suggested five stages of small firm growth, namely existence, survival, success, take-off and maturity. Helms & Renfrow (1994) has supported the image of the five stages of various developmental growth stages when they conducted a look for in United States.Bridge, ONeill & Martin (2009) defined the five stages as the following the existence stage is similar to the seed stage explained previously, while the survival stage involves customer familiarisation with the firms product or service. The success stage is when there ar options for further growth, thus the take-off stage where the geter opted to grow the trading larger. The commercial enterprise will r for each one the maturity stage when it displays the characteristics of a large company.However, the mentioned researchers have conclude that it is difficult to clearly define the business development stages clearly during throughout the business cycle (Bridge, ONeill & Martin 2009). scorn the challenging task to categorise growth, researchers would still generally use the small business growth as indicator of success since it is common dialect to suggest that success requires growth, to stand still is to die (Geneste & Weber 2011). there atomic number 18 enormous literatures on theories of growth and ar most ordinarily associa ted with generation of railway lines.In the early years, entrepreneurship has been the main focus due to its pregnant engagement opportunities that was created. This reason remained strong today thus gaining the attention from policy-makers in each country. In fact, the number of employees a firm has become an grievous gene for classifying a small firm (Helms & Renfrow 1994). research shows that young senior high-growth firms (also comm just now cognise as gazelles) generate a large shargon of all invigorated net jobs (Roper 2012).Robbins, Pantuosco, Parker & Fuller (2000) has also confirmed in their research that a state with large quantity of small business has lower evaluate of un physical exercise equated to other states that has little quantity of small businesses. The reason affair judge are valuable in measuring stick growth is because each firm will grow until they reach the optimal size that corresponds to minimum fair constitute (Hart 2000). Thus, each firm will treat to employ during its growth stage until it reaches the efficient scale or natural decay.However, other research has turn out that it is difficult to handbill small firm performance by employee growth. This is due to moderating variables such as outsourcing activities, productivity changes and replacement of employees with capital investments (Fitzsimmons, Steffens & Douglas 2005). When business grow in this the rapid changing modem world, umteen work and service functions has been contracted out (Bridge, ONeill & Martin 2009). In other words, a business can grow without having any annex in employment rate.Several academicians argued that sales precede other yardsticks for business growth, as pointed out that it is the increase in sales that necessitates the increase in the number of employees hired (Davidsson, Achtenhagen & Naldi 2010). sales revenue performance is used as small firms growth because it mirrors the consumers demand for the product or services prov ided by the firm (Fitzsimmons, Steffens & Douglas 2005). In this world of constant returns, the consumers demand for the product or services determines the limit on the firms growth.Sales figures easily reflect both short-term and long-term changes in the firm, hence measuring the growth and performance. However, there are 2 reasons that deviate sales as business growth yardstick. Firstly, the typical d avouchward sloping demand crimp is non applicable in practice. Just as a ordinary entrepreneur starts more than one business, a firm can also have product differentiation (Hart 2000). Hence, it is difficult to determine the demand and cost curves in imperfect competition market condition.Secondly, sales are not an accountable measure during first a couple of(prenominal) stages of the business cycle. During the seed and the start-up stage, employment and assets may grow more extensively before any significant sale has been done (Fitzsimmons, Steffens & Douglas 2005). In this cont ext, assets are in the form plain fixed assets and intangible assets such as of entrepreneurs noesis asset, the reputation of the firm (Bridge, ONeill & Martin 2009) and quantity of registered patents. Hence, business growth could not be measured by sales alone.Looking from another dimension, a firms advantageousness could be suggested as an important measure of growth for the simple reason that a firm is unable to sustain without profits. The divergence between maximised sales and maximised profit is that the marginal revenue is zero when sales are maximised but the marginal revenue is positive when profits are maximised (Hart 2000). A firms growth on profitability can be deal outed in term of the net profit margins, return on assets (Fitzsimmons, Steffens & Douglas 2005) or return on equity (Durguner & Katchova 2009).High profit margins, return on assets and return on equity provide more confidence for shareholders and effectiveness investors to invest in the firm, enhancing business growth. However, growth rates are super volatile over duration of time and research has shown that there is no evidence of a relationship between growth and profitability (Fitzsimmons, Steffens & Douglas 2005). In accordance, many articles have reached a conclusion that monetary measures alone are not sufficient as business growth and performance measure for small firms (Reijonen & Komppula 2007).This is due to the fact that, just as entrepreneurship, small business sector is hardly homogeneous, and not all of these businesses are operating in the same direction. Some research has even shown that not all small firms are even capable or willing to grow (Papadanki & Chami 2002). What is entrepreneurial success? The capability and willingness to grow of small firms are directly influenced by the business proprietors intention to grow and their self- comprehension of success.In other words, the growth of small business is not a self-evident phenomenon, but it is actually us e upn by the business proprietors demands and intentions (Morrison, Breen & Ali 2003). Most business decisions are make by owners, and their own face-to-face judgement will impact on the business growth orientation (Geneste & Weber 2011). Consequently, it can be considered that the fiber of the entrepreneur should be emphasized as the dominant factor of growth (Reijonen & Komppula 2007). An entrepreneurs motivation for business growth has to be complemented by his or her willingness to grow and assume risks.The risks involved are such as willingness to delegate control functions to others and the uncertainty to produce more output. The researchers found that due to the risks, small business owners are reluctant to grow and perceives profit-maximisation as only one of the motives for business growth (Papadanki & Chami 2002). This argument draws down to the psychological theories of motivation. The McClellands opening of urgencys defined need for achievement as the drive to excel , to achieve in relation to a set of standards, and to strive to conform to (Robbins, Judge, Millet & Boyle 2011).Hence, characteristics of the business owners are linked to the business growth aspirations. In other words, each entrepreneur has their own perception of success depending on their own standard for need for achievement. To chthonicstand the business growth aspirations deeper, the owners clusters of traits and behaviours which affect the way they engage in their business activities are examined. The characteristic of the firm owner can be divided into three broad categories, namely life-style, nurture-zone and growth (Bridge, ONeill & Martin 2009).The life-style owners are defined to be those who establish the business to provide them a level of income and have no intention for business growth. Geneste & Weber (2011) has identified owners that are not keen to expand their business due to deliberate life-style choice, such as the small business atmosphere that engende rs comradeship and job satisfaction. The comfort-zone owners establish the business and focus on the benefits it can provide for the comfort he or she wants in life and the business growth will be stagnant once the desired comfort level has been achieved.The growth owners are the almost ideal business person who maximises the earning potential and continue to grow the business further for the future. Clearly again, the inbuilt motivation of the owner should be examined further in order to understand what entrepreneurial success is. There are many studies that have been conducted to explore an entrepreneurs intrinsic motivation for his or her business. One act of research conducted was to compare the start-up motivations and growth intentions between African-Americans (titled as foul by the researchers) and Americans (titled as snow-clad by the researchers).Edelmen, Brush, Manolova & Greene (2010) has conducted a research to investigate new venture among black and white nascent e ntrepreneurs. In their research, they have discovered three important findings related to business growth. Firstly, nascent entrepreneurs do not associate business establishment outcomes with business growth intention. Secondly, entrepreneurs are motivate to start ventures to make full a need for self-realisation. Lastly, it is found that whites are more strongly motivated by the desire for financial success while blacks had higher levels of personal self-confidence.Hypothetically, the findings of this research suggested that blacks inherited the life-style motivations while the whites are comfort-zone motivated. This research has proved that expected financial outcomes are not as important as noneconomic concern in determining the entrepreneurs attitude towards growth. The entrepreneurial success is not related to the growth of the firm but for intrinsic satisfaction instead hence small firm growth should not be the only measure for the entrepreneurs success.In another piece of re search, (Utsch, Rauch, Rothfufs & Frese 1999) has investigated the rapid emergence of entrepreneurs and small firms in atomic number 99 Germany. During the research, the role of constitution traits has been clarified and the researchers found an encouraging convergence result in two areas, namely the need for achievement and need for autonomy. In other words, entrepreneurs with high need for autonomy will be more motivated to part small-scale business ventures and will develop the business further only if they have high need for achievement as well.In parallel to that, lee side & Tai (2010) has conducted a research to investigate the motivators and success of small business in Kazakhstan. Empirical evidence has suggested the entrepreneurs are motivated to achieve financial independence and also to obtain friendly recognition. This is due to the fact that entrepreneurial endeavours are considered as honourable and also an upgrade on social- experimental condition activities. Thi s theory is shows that entrepreneurs in Kazakhstan are more aligned towards the comfort-zone characteristics.The mentioned researchers have also concluded that the success of nigh small firm growth is contributed by the creativity and commitment of all the entrepreneurs. From these two pieces of research, it is further confirmed that entrepreneurs have their own perceptions of success but each individual has different intrinsic motivation to achieve his or her goal, albeit from different geographic locations. Another aspect to consider on perception of entrepreneurial success should be the gender of the owner. look into shows that there are differences across entrepreneurs gender on perceptions of success.Male and female persons entrepreneurs differ in the way they measure their extrinsic and intrinsic dimensions. preliminary study has verified that male entrepreneurs tend to emphasize on decimal measures and economic values while female entrepreneurs emphasize on soft measure s and social values (Justo, Cruz, de Castro & Coduras 2006). Hypothetically, male entrepreneurs describe success in term of achieving goals while female entrepreneurs define success in terms of doing something fulfilling. The research has also iscovered that the motivation for business success is moderated by the parental status of the entrepreneur. Female entrepreneurs are more motivated venturing into self-employment if they have dependent children under their care and perceived success when they are able to fulfil the need of independence. This hypothesis has been confirmed by Ahmad (2011) when he conducted a research on female entrepreneurs in Kingdom of Saudi-Arabian Arabia. In this piece of research, female entrepreneurship has proved to be influenced by the female entrepreneur wanting to fade more quality family time.For these female entrepreneurs, the perception of success was when the desire for autonomy, independence, self-fulfilment and riches has been achieved. In shor t, the gender status of the entrepreneur significantly impact on the perceptions of entrepreneurial success where female entrepreneurs depict more on social values as success. Conclusion In conclusion, the dimensions of small firm growth and the perspectives of entrepreneurial success have been discussed to judge how true the aphorism of entrepreneurial success can only be judged by small firm growth.The different stages of business cycle have been identified and the growth of the business occurs in almost all the phases in the five stages of small firm growth in their own way. appendage is included in many aspects, such as growth of the idea, or the growing numbers of customers, or generating more returns from the business. Generally, the measurement of growth is mainly based on quantifiable values such as employment rate, business sales and profitability among other yardsticks. However, research shows that small firm growth could not be measured on financial and economical terms only.The rate of employment becomes insignificant as the business can grow without hiring any new employees, while sales do not account for the first orthodontic braces stages of the business cycle and there might be owners who deviate from the main product or service line. Research has also shown that there are no relationship between profitability and growth. Therefore, the entrepreneurs perception of success should be moderated to measure small firm success. Three types of small firm owners characteristics has been identified, namely the life-style, comfort-zone and growth.From the few pieces of research that has been examined, most of the entrepreneurs are found to be life-style and comfort-zone and seldom the ideal growth motivated characteristics. The gender of the entrepreneur will also affect the measuring manner of small firm growth success. each attribute shows the willingness and capability of each owner to further grow their business. Hence, the entrepreneurs intrinsic motivation plays a vital role in judging and predicting the small firm success.In this context, the intrinsic motivations are such as the need for achievement, autonomy and self-realisation are more important than business growth intentions. In a nutshell, it can be concluded that small firm growth can be a way to measure entrepreneurial success, but it should be based on the standard or level that the entrepreneur has placed emphasis on instead of strictly on monetary values only. 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