Entrepreneurship and small business sustainability

Abstract

South Africa is experiencing immense structural changes in its household income patterns and retail environment. Inhabitants of township areas have experienced substantial economic upliftment. Many township consumers have progressed to middle-income status, resulting in a signifi cant increase in consumer spending. As a result, large national chains and franchisors are increasingly exploring these untapped markets. Township areas were, until the end of the last century, dominated by small (often informal) businesses which became subject to heightened levels of competition due to these mentioned developments. Findings from longitudinal surveys among a panel of 300 small businesses in Soweto between 2007 and 2009 were modelled through a categorical regression model with business survival as dependent variable. The level of signifi cance of 18 independent variables suggest that entrepreneurial acumen and business management skills be classifi ed as the strongest predictors of small business survival. The ability to adjust one’s business model to adapt to changed economic circumstances is an important characteristic of entrepreneurial conduct that ultimately dictates survival in increasingly competitive economic environments.