Managing internal resource for sustainability: A case of Indian family business

Abstract

Family Business plays an important role in any economy to enhance employment in low income strata of population. They are included in house hold enterprises where the resources of business and owner is inseparable. A few family baseness had grown from informal level to formal due to consistent growth while a few had extinct. The extinction and survival of small family business ignite a curiosity to identify reasons for it. The inseparability in resources between business and owner limit the growth trajectory and scope for availing finance from formal system. This compels the small family business to depend on own resources or to rise fund on personal risk.The population in this research is grocery traders as it is one of the prominent in family business as it can be started as a part of residence, all family members can contribute, need of less expertise and lower investment. This paper analyse how small family business manage resources in time when they are in need. The research is conducted in Coimbatore District in Tamilnadu and the sample size is 392. It is a longitudinal survey as the data is collected over a period of one year. The shops were classified on two parameters, floor area and daily sales and measures for comparison are Net Trading Cycle, Gross Margin Return on Investment ( GMROI) and Net Profit Ratio (NPR). Family business use Resource Bootstrapping and Bricolage (RBB) strategies to overcome resource scarcity or to reduce the cash outflow which include the use of own fund, premises, vehicles and family members. The Paper explain how the RBB strategies add to the value addition through reducing operating expenses.