Growth intention and its impact on business growth amongst SMEs in South Africa

Abstract

Growth is generally perceived as a good goal for businesses because it is an important measure of business success and key driver to the creation of wealth, employment, and economic development in every country around the world. Nevertheless, studies depict that many SME owner are not interested in growth or deliberately refrain from pursuing growth and it is also unclear as to what happens to entrepreneur’s growth intentions subsequent to the launch of a venture. This study had as objectives to find out which factors determine the growth intention amongst existing business owners and the impact growth intention has on the actual growth of their SMEs. This study identified some factors (locus of control and self-efficacy, prior family business exposure, level of education, entrepreneurship education, need for achievement, tolerance of ambiguity and uncertainty and procedural requirements for business registration) to significantly affect the growth intentions of entrepreneurs in South Africa. This study also established that growth intentions were significantly related to actual firm growth in terms of sales growth and asset growth. Thus policy measures should put in place support programs that will promote a culture of growth oriented thinking amongst SME owners as a means of fostering growth in the SME sector.