The role of entrepreneurship in small business success in Pietermaritzburg, South Africa.
The objective of this research was to assess the role of entrepreneurship in the success of small businesses using the factors based on the Burch continuum to measure the levels of entrepreneurial activity. The term entrepreneurship is often used inappropriately in respect of all small businesses, and yet in actual fact this term only refers to businesses that have growth and development as sustainable and achievable objectives (Ligthelm, 2008:368). This study used growth in staff numbers as the measure of success. Growth in staff numbers was used because small business owners are generally not willing to give out their financial records or to disclose their firms’ financial standing. The law of diminishing returns states that the business faces rising costs as it undertakes to expand or grow. The cause of this being that some fixed factors of production limit profitable growth (Teece, 2000:49). This therefore implies that businesses would not unnecessarily increase their employee numbers unless they were growing and had an increased need for labour. Using emailed questionnaires to collect the data needed for the research, a simple random sample of 252 SMEs was generated from a pool of 678 companies registered with the Pietermaritzburg Chamber of Business. The data collected was both qualitative and quantitative. SPSS was used to analyse the data. The information showed that an increase in the level of entrepreneurial activity has a positive impact on the success of a small business. Nearly all the businesses that were successful actively practiced a number of variables that Burch used to measure entrepreneurial activity in his continuum and engaged in more strategic roles as compared to the unsuccessful businesses. A clear differentiation was found using the roles played by the entrepreneur. The successful businesses were run by entrepreneurs who employed more strategic roles in businesses. The researcher would suggest that further study be done on the relevance of older business theories in relation to business success considering the impact of advanced technology in the present day.