Entrepreneurship gaps framework: an exploration into expectations vis-a-vis realities of entrepreneurship

Abstract

In South Africa, empirical evidence discloses a situation that is crippling to early-stage entrepreneurs since three in every four emerging businesses are collapsing. A substantial body of research has documented the lack of resources to be the instigator of this high attrition rate. While this narrative would appear to provide both the reason for and the solution to the high business failure rate, the current study argues that this perspective is limiting and inadequate to deal with this problem of high entrepreneurship venture attrition. Such limited perspective focusses narrowly on the business component, excluding the entrepreneurial component. In addition, this perspective does not attempt to explore or address the possible gap between entrepreneurs’ expectations and the realities they face in managing businesses. This study and a limited number of other studies have shown many emerging entrepreneurs to experience a discrepancy between what they expect when running a business, and the often harsh realities they experience when owning and managing a ‘real’ business. For researchers as well as for early-stage entrepreneurs, this presents a discrepancy between theory and experiential reality – one of the significant trials of operating a business is when the entrepreneur should deal with this discrepancy. This study refers to this discrepancy as the Entrepreneurship Gap (EG). The EG is higher when business management and sustainability realities differ greatly from entrepreneurial expectations. Thus, one can postulate when the EG level is high, the entrepreneur is inadequately prepared for establishing, managing and sustaining a business. At the point where this EG becomes apparent, the level of the entrepreneur’s ability or inability to deal with business becomes fundamental as well as crucial to identify and or predict his/her success. The purpose of this research was to develop a framework model that can be used to diagnose business preparedness among early-stage entrepreneurs and therefore assist them to adjust to a career in entrepreneurship. Evidence supporting the framework model and its applications is discussed within the ambit of early-stage businesses. To attain this purpose, an exploratory sequential research design was employed. A two-phase data collection procedure was conducted in the Limpopo Province. Phase one involved in-depth interviews that were to explore the various business factors that entrepreneurs struggle within the early stages of establishing and managing a business. ATLAS.ti version 8 was employed for qualitative data analysis. In phase two, a structured self-administered questionnaire was used. SPSS v24 was used as tools for quantitative analysis. The sample sizes for each phase were five and 215, respectively. The participants were purposively selected after satisfying the selection criteria. This was completed using an explorative data analysis grounded in discrete choice models, and R version 3.6.0 was used in the analysis of the developed models. The various specific business factors affecting entrepreneurs in the early stage of business and which emerged from the data were presented. The study further developed an EG measurement scale and an Entrepreneurship Gaps Framework (EGF) model. Findings from the EGF model revealed the potential ability of the model to act as a comprehensive diagnostic mechanism that assists early-stage entrepreneurship survival. From the findings, this study argues and advocates the use of the EGF model as a decision-making tool by – but not limited to – policymakers, lenders, and capacity-development institutions, to determine the level of financial and non-financial support that should be provided to entrepreneurs to improve their chances of success. Thus, entrepreneurs are likely to benefit from the EG measurement scale if they make use of it as a self-diagnostic tool to measure and monitor their business preparedness and lived experience of managing and sustaining a business.