Walden University

College of Management and Technology

This is to certify that the doctoral study by

Betty Lum

has been found to be complete and satisfactory in all respects,

and that any and all revisions required by
the review committee have been made.

Review Committee
Dr. Denise Gandy, Committee Chairperson, Doctor of Business Administration Faculty

Dr. Kenneth Gossett, Committee Member, Doctor of Business Administration Faculty

Dr. Rocky Dwyer, University Reviewer, Doctor of Business Administration Faculty

Chief Academic Officer

Eric Riedel, Ph.D.

Walden University
2017
 Abstract

Business Strategies for Small Business Survival

by

Betty W. Lum

MBA, Kaplan University, 2014

BS, Kaplan University, 2012

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

November 2017
 Abstract

Small business owners play a leading role in the United States economy by creating jobs

and driving innovation. However, half of all new small business owners close their doors

before their 5th anniversary. Following the entrepreneurship theory, the purpose of this

multiple case study was to explore what strategies 5 small business owners in the food

and beverage industry in the San Francisco Bay area used to survive beyond 5 years of

operation. Data sources included semistructured interviews and company documents.

Data analysis included descriptive and process coding of the data and use of NVivo to

identify themes. Based on thematic analysis of the data, the emergent themes included:

human capital, business goals, and growth through innovation. Participants relied on

business knowledge to start and sustain their businesses; set incremental goals for growth

and aligned business decisions to achieve those goals; and maintained a competitive

advantage by implementing innovative and creative changes to their products and

services. The implications for positive social change include the potential to provide

small business owners and potential small business owners with strategies to sustain their

businesses beyond the 5-year mark, thus contributing to economic growth of their

businesses, their employees, and their local economy.

Business Strategies for Small Business Survival

by

Betty W. Lum

MBA, Kaplan University, 2014

BS, Kaplan University, 2012

Doctoral Study Submitted in Partial Fulfillment

of the Requirements for the Degree of

Doctor of Business Administration

Walden University

November 2017




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 Table of Contents

Section 1: Foundation of the Study......................................................................................1

Background of the Problem ...........................................................................................1

Problem Statement .........................................................................................................2

Purpose Statement ..........................................................................................................2

Nature of the Study ........................................................................................................3

Research Question .........................................................................................................4

Interview Questions .......................................................................................................4

Conceptual Framework ..................................................................................................5

Operational Definitions ..................................................................................................8

Assumptions, Limitations, and Delimitations................................................................9

Assumptions............................................................................................................ 9

Limitations ............................................................................................................ 10

Delimitations ......................................................................................................... 10

Significance of the Study .............................................................................................10

Contribution to Business Practice ......................................................................... 12

Implications for Social Change ............................................................................. 12

A Review of the Professional and Academic Literature ..............................................12

Entrepreneurship Theory ...................................................................................... 14

Small Business ...................................................................................................... 15

History of Small Business Survival and Demise .................................................. 17

i
 Small Business and Business Leadership ............................................................. 19

Small Business and Business Strategies ............................................................... 23

Small Business and Organizational Change ......................................................... 35

Small Business and Finance.................................................................................. 37

Small Business and Owner Characteristics........................................................... 41

Small Business and Ownership Type ................................................................... 44

Small Business and Innovation ............................................................................. 46

Transition .....................................................................................................................51

Section 2: The Project ........................................................................................................52

Purpose Statement ........................................................................................................52

Role of the Researcher .................................................................................................52

Participants ...................................................................................................................55

Research Method and Design ......................................................................................57

Research Method .................................................................................................. 57

Research Design.................................................................................................... 59

Population and Sampling .............................................................................................62

Ethical Research...........................................................................................................65

Data Collection Instruments ........................................................................................67

Data Collection Technique ..........................................................................................71

Data Organization Technique ......................................................................................74

Data Analysis ...............................................................................................................75

ii
 Reliability and Validity ................................................................................................79

Reliability.............................................................................................................. 79

Validity ................................................................................................................. 80

Transition and Summary ..............................................................................................83

Section 3: Application to Professional Practice and Implications for Change ..................85

Introduction ..................................................................................................................85

Presentation of the Findings.........................................................................................86

Emergent Theme 1: Human Capital ..................................................................... 88

Emergent Theme 2: Business Goals ..................................................................... 92

Emergent Theme 3: Growth through Innovation ................................................ 101

Summary of Themes ........................................................................................... 106

Application to Professional Practice ..........................................................................110

Implications for Social Change ..................................................................................110

Recommendations for Action ....................................................................................111

Recommendations for Further Research ....................................................................113

Reflections .................................................................................................................113

Conclusion .................................................................................................................114

References ........................................................................................................................116

Appendix A: Invitation to Participate in the Study..........................................................156

Appendix B: Consent Form .............................................................................................157

Appendix C: Interview Protocol ......................................................................................159

iii
Appendix D: NVivo 11: Frequencies of Themes and Sub-Themes ................................160

iv
 1

Section 1: Foundation of the Study

Small business owners play a leading role in the United States economy by

creating jobs and driving innovation. The Small Business Administration (SBA, 2016)

defined a small business owner as the proprietor of an organization with fewer than 500

employees. The problem is that over half of all new small business owners will close the

doors of their businesses before the businesses’ fifth year anniversary. I explored the

business strategies small business owners used that enabled them to operate a business

beyond the 5-year mark. I collected data regarding business strategies of successful small

business owners through semistructured, face-to-face interviews and company

documents. The findings from this study may contribute to positive social change by

helping new small business owners operate their businesses beyond the first 5 years,

allowing for the creation of new jobs, reduction in unemployment, and increase in tax

revenues.

Background of the Problem

The United States is currently recovering from the Great Recession of 2008-

2010. The recent economic downturn impacted both large and small businesses with

small businesses experiencing a disproportionate decline (Belas, Bartos, Habanik, &

Novak, 2014; Sahin, Kitao, Cororaton, & Laiu, 2011). Small businesses in the United

States experienced a net job loss of over 3.2 million from 2008 through 2010 (SBA,

2013). Exploring the reasons why the last economic downturn hit small businesses harder

than large businesses may help small business owners better prepare for the next

economic downturn.
 2

The problem I addressed in this qualitative case study is the lack of business

strategies that should be in place for small startup businesses to be able to survive beyond

5 years of operation. Half of all new small businesses will close their doors before their

fifth anniversary (SBA, 2016). The findings of this study may help to provide small

business owners with knowledge about business strategies that may help them operate

their businesses to survive beyond the first 5 years.

Problem Statement

Over 50% of new small businesses in the United States will not survive beyond 5

years (SBA, 2014). Small businesses account for 99.7% of U.S. employer firms, 48.5%

of private-sector employment, and 98% of the companies exporting goods (SBA, 2014).

The general business problem is there is a high failure rate of new small business owners

in their first 5 years of operation. The specific business problem is that some new small

business owners lack business strategies to sustain their businesses beyond the first 5

years of operation.

Purpose Statement

The purpose of this qualitative multiple case study is to explore business

strategies new small business owners used to sustain their business beyond the first 5

years of operation. The target population was five small business owners in the food and

beverage industry, who have operated their business for more than 5 years located in the

San Francisco Bay area. The data from this study may contribute to positive social

change by educating small business owners about strategies to sustain their business

beyond 5 years. Positive social change may result if new small business owners can
 3

become viable members of their local communities by creating jobs, reducing

unemployment, and increasing tax revenue.

Nature of the Study

The research method for this study was qualitative. Qualitative researchers seek

answers to a question about a phenomenon (Mack, Woodsong, MacQueen, Guest, &

Namey, 2005). The qualitative method involves a research question that answers what,

how, or why a phenomenon exists (McCusker & Gunaydin, 2015). The strength of the

qualitative method is that it enables the researcher to provide complex textual

descriptions regarding how people experience a given phenomenon (Mack et al., 2005).

Qualitative findings are presented to readers using language and words (Pearson, Jordan,

Lockwood, & Aromataris, 2015) I did not select the quantitative research method for this

study because I did not need to establish statistical conclusions about a population by

studying a representative sample of the population (Lowhorn, 2007). I could not use the

quantitative research method to collect the in-depth participant perspectives that I used to

provide the answers to the research question for this study. I did not select the mixed

methods research approach because I did not plan to collect, analyze, and interpret both

qualitative and quantitative data (Zohrabi, 2013). I did not plan to use quantitative data to

answer the research question for this study, which made mixed methods not appropriate

for this study.

I used a multiple case study design to address my study’s purpose. There were

four major research designs considered: (a) phenomenology, (b) grounded theory, (c)

ethnography, and (d) case study (Petty, Thomson, & Stew, 2012). I did not select a
 4

phenomenological study because I was not exploring the human lived experiences

attributed to a phenomenon (Ingham-Broomfield, 2015). The grounded theory design was

not appropriate because I was not seeking to develop a theory based on the data from

individuals who have lived the phenomenon (Petty et al., 2012). An ethnographic

research design was not appropriate because I was not exploring the shared patterns of

behavior, beliefs, and language within a cultural group (Petty et al., 2012). I used the case

study design to describe in depth, experiences of five small food and beverage business

owners. I explored the business strategies small food and beverage business owners used

to sustain their business beyond the first 5 years of operation. A multiple case study

design was the most appropriate design for this study.

Research Question

What business strategies do new small business owners use to sustain their

business beyond 5 years of operation?

Interview Questions

I asked the following open-ended questions during the one-on-one face-to-face

interviews:

1. What strategies did you use to help your business survive during the initial phases

of beginning your business?

2. What barriers did you encounter when implementing your small business’ success

strategies?

3. How did you address the implementation barriers?

 5

4. What type of business strategy training or education did you receive prior to

starting this business and how did it prepare you to own and operate a small

business?

5. What type of business strategy development experiences did you have prior to

starting this business and how did it prepare you to develop a business strategy for

this business?

6. What was the most challenging part of developing a business strategy to operate

this business for at least 5 years?

7. What skills are the most important to have when developing a business strategy to

operate a small business for at least 5 years?

8. How did you measure/assess the success of your strategies?

9. What strategies do you have in place to sustain your business?

10. What strategies do you have to grow your business?

11. What resources would you need to be able to develop a better business strategy

for your business?

12. What would you like to add on the topic of your business success?

Conceptual Framework

Entrepreneurship theory is the conceptual framework for this research study. In

1911, Joseph Alois Schumpeter wrote The Theory of Economic Development in which he

described economic development as an evolutionary process (Hagemann, 2015). He

viewed the economy as continuously changing (Boehm, 2015; Cantner & Dopfer, 2015).

Schumpeter focused his life’s work on the nature of the economy and how its evolution
 6

over time shaped society (Audretsch, 2015). Schumpeter believed that the source of

economic growth was creative destruction which was fueled by entrepreneurs

(Audretsch, 2015). Creative destruction was when the old ways of doing things were

replaced by new combinations that were economically more viable (Schumpeter, 2012).

Charismatic entrepreneurs would use creative destruction as a vital source of innovations

and bring about revolutionary changes (Audretsch, 2015; Nightingale, 2015; Waller &

Sag, 2015). Schumpeter (2012) described an entrepreneur as an agent of change who

caused the economic environment to evolve by introducing disruptive innovations. His

entrepreneur upset the conventional way of doing things by making business decisions

that promoted the firm’s economic development through new and innovative methods

(Schumpeter, 2012). Many economists referred to the innovative high-growth

entrepreneur as a Schumpeterian entrepreneur (Block, Fisch, & van Praag, 2017).

Since 1911 and Schumpeter’s original description of an entrepreneur, the

entrepreneur has changed. Most modern entrepreneurs are replicative, which means they

are involved in conventional activities and contribute little to industrial revolutions and

economic growth (Griffiths, Kickul, Bacq, & Terjesen, 2012). The majority of recent

entrepreneurship researchers have focused on the lone entrepreneur and his or her

entrepreneurial activities (Griffiths et al., 2012). Schumpeter’s entrepreneur has changed

but the key characteristics of the entrepreneur, the ability to change, learn, and innovate

remains attributed to Schumpeter’s entrepreneurship theory (Louca, 2014).

Schumpeterian entrepreneurial small business owners focused on searching for and

creating new economic opportunities (Block et al., 2017). Dhliwayo (2014) found that if
 7

a business consistently offers the customer something new or different from its

competitors, it will have a competitive advantage. The advantage, however, is temporary

which means that the company needs to continually search for innovations. Dobni,

Klassen, and Sands (2016) emphasized that protecting market position is not a viable

business strategy. The researchers found that depending on the status quo is risky and

almost always proves fatal for the organization. Osenieks and Babauska (2014) found

that the complexity of innovation has increased because of the increased amount of

knowledge that is available to organizations to help make their strategic choices. Bates

and Robb (2014) found that small business owners who used the innovative

entrepreneurial process to plan and organize their activities into business strategies may

be able to keep their business viable. The innovative entrepreneurial process is comprised

of the activities entrepreneurs undertake in pursuit of their innovative business ideas.

Taneja, Pryor, and Hayek (2016) created a model to help small business decision makers

understand strategic innovation and its key elements. In the model, the researchers listed

the key elements as: (a) passion for creating and innovating, (b) cooperation and

collaboration, (c) internal innovation capabilities, (d) organizational culture, and (e)

supportive employees, customers, and suppliers. Small business owners using new and

innovative techniques to operate their business successfully within a given market made

the entrepreneurship theory applicable to this study.

 8

Operational Definitions

The following definitions are for key terms and phrases used in this research

study. The goal is to ensure the readers of this study have a clear understanding of the

meaning of those words and terms.

Business Strategy: For this research study, business strategy is the outcome of the

decisions made by a small business owner to guide the business on environment,

structure, and processes that influence the business’s survival (Bozkurt & Kalkan, 2014).

Entrepreneur: An entrepreneur is a pioneer in the innovation of new products,

services, processes, markets, and industries (Vadnjal & Kociper, 2013).

Entrepreneurship: Entrepreneurship is a management process where

organizations seek opportunities to improve themselves in order to remain competitive in

the market (Dorin & Alexandru, 2014).

Small Business: A small business is an independent business with fewer than 500

employees (SBA, 2016).

Small Business Failure: For this research study, a small business failure is an

independent business that does not survive for at least 5 years (SBA, 2016).

Small Business Success: For this research study, a small business success is an

independent business that survives 5 years or longer (SBA, 2016).

Sustainability: For this research study, sustainability refers to the ability of a

small business to sustain its current profitability into future periods (Banker, Mashruwala,

& Tripathy, 2014).

 9

Assumptions, Limitations, and Delimitations

Not every researcher has the opportunity to design and conduct his or her research

study in a manner that he or she would consider ideal (O’Leary, 2014). There are always

trade-offs because there are limitations to the amount of time and money available to do

the study perfectly (O’Leary, 2014). I documented my assumptions, limitations, and

delimitations to assist the reader in understanding the inherent problems I encountered

while conducting this research study.

Assumptions

Assumptions are facts considered true or at least plausible, but not personally

verified (Marshall & Rossman, 2016). My first assumption was that a qualitative multiple

case study was the appropriate method and design to explore the facts required for this

study. My second assumption was that the data collection methods of interview questions

and company documents would provide enough data to answer the research question. My

third assumption was that the San Francisco Bay area would be a large enough

geographical area to provide me with a sufficient number of small business owners who

have operated their business for more than 5 years and would participate in this study. It

was also my assumption that the participants would provide truthful and honest answers

to the interview questions and that they would allow me to review the company

documents for their businesses. I made the assumption that the findings of studies

conducted on large businesses also apply to small businesses. Small businesses have

characteristics that differentiate them from large businesses. These differences may
 10

render the findings from the studies on large businesses irrelevant when it comes to small

businesses (Ng, Harrison, & Akroyd, 2013).

Limitations

Limitations are conditions or design characteristics that a researcher cannot

reasonably dismiss that could affect the study (O’Leary, 2014). The primary limitation

for this study was the sample size of the participants. The participants for this study are

small business owners, in the food and beverage industry, with businesses in the San

Francisco Bay area. A research study with a narrow scope may make the results not

generalizable (Ng et al., 2013). Since this study had a narrow scope, the research findings

and conclusions from this study conducted on the sample population may not be

extendable to the population at large. I had to limit this study because of time constraints

and limited access to participant information.

Delimitations

Delimitations refer to the study’s boundaries (O’Leary, 2014). A delimitation of

this study is the population which included small business owners who have operated

their new businesses for more than 5 years. A second delimitation is the industry, which

is the food and beverage industry. The third delimitation is the geographical location of

the San Francisco Bay area.

Significance of the Study

Governments worldwide acknowledge small businesses for their contribution to

economic stability and growth, employment, and new job creation (Marom & Lussier,

2014; SBA, 2014). The creation of new small businesses has helped to improve the
 11

economy and society in four very different parts of the world: North America, South

America, Central Eastern Europe, and the Middle East (Marom & Lussier, 2014). Small

business experts have not identified the specific business strategies that enable small

business owners to contribute to their local economy and community. I explored the

business strategies of San Francisco Bay area small business owners in the food and

beverage industry who have operated their business for more than 5 years. The data from

this study may contribute to positive social change by educating small business owners on

strategies to sustain their business beyond 5 years. Positive social change may result if the

new small business owner can become a viable member of the local community by

creating jobs, reducing unemployment, and increasing tax revenue.

Approximately half of all new small businesses in the U.S. survive 5 years or

more (SBA, 2014). The small business survival rate has changed little over time (SBA,

2014). The findings from this research study may help small business owners operate

their business beyond the first 5 years. Understanding the business strategies that can

influence small business survival could enable new small business owners to focus on the

strategies that will help them sustain their businesses. Effective decision making is

dependent upon the informed decision making ability of the owner and his or her

management team. Findings from this study may provide small business owners with a

better understanding of the activities that go into business strategies that can contribute to

the survival of a new small business. The results from this study might contribute to

positive social change by improving the survival rate of new small businesses, which may

help improve the U.S. economy through increased tax revenue and job creation.
 12

Contribution to Business Practice

A major concern for the new small business owner is the chance of success for the

business (Lussier & Corman, 2015). New small business owners want their businesses to

survive because the success of their businesses means personal success for them (Casas

& Hilb, 2016). The reality is that half of the new businesses started by small business

entrepreneurs will not survive their first 5 years of operation (SBA, 2016). The findings

from this study may provide small business owners with information about where they

must direct their energies in order for their businesses to survive the first 5 years.

Implications for Social Change

Gaining knowledge about the strategies required for small business success will

enable small business owners to direct their limited resources to those areas critical to the

survival of the business. Maximizing the value created through the efficient use of

business resources will increase the chances of survival for those businesses. The

knowledge from this study may be able to help small business owners with the business

strategies that will enable them to operate their businesses to survive beyond the first 5

years. Businesses that are still in operation after 5 years continue to contribute to the

stability and health of the economy (Lussier & Corman, 2015). The findings from this

study might contribute to positive social change by reducing the burden on taxpayers by

bringing in new jobs, reducing unemployment, and increasing sales tax revenues.

A Review of the Professional and Academic Literature

The purpose of this qualitative multiple case study was to explore what business

strategies new small business owners used to sustain their business beyond the first 5
 13

years of operation. This review of the professional and academic literature will provide

an overview of the general topic of small business strategies and the specific topic of

business strategies that positively impact small business performance. The literature

review has three main purposes: (a) to inform the audience of developments in the field,

(b) to establish researcher credibility, and (c) to set the current study within the context of

past research (O’Leary, 2014).

The sources for this study was mainly from the Walden University business and

management online databases. The databases utilized were: (a) Business Source

Complete, (b) ABI/INFORM Collection, (c) Emerald Insight, (d) SAGE Journals, and (e)

ScienceDirect. The government databases utilized were from the Bureau of Labor

Statistics and the U.S. Small Business Administration. Key search words used in the

databases included variations or combinations of: small business or SME, small business

owner, entrepreneurship, performance, innovation, survival, success, failure, business

strategy, finance, marketing, alliances, and network. The main source of information for

the literature review was peer-reviewed journal articles. The literature review included

284 references. The publication date for 241 (85%) of these references were within the

past 5 years. Peer-reviewed articles comprised 245 (86%) of the references. I also used

dissertations and books about business strategies that contribute to small business

survival as additional sources of information for the literature review. Government

publications with statistics about the small business sector were also a key source of

information.
 14

The approach I selected for this study included a section with background

information about entrepreneurship theory and small business survival and demise. There

are discussions in the literature regarding the major themes and subthemes of the study.

Major themes for research in this study included business strategy, business

characteristics, and owner-manager characteristics. Sub-themes included small business

and change, innovation, finances, and performance. Sub-themes under owner-manager

characteristics included gender, entrepreneurial orientation, leadership style, experience,

and education.

Entrepreneurship Theory

The entrepreneurship theory of Joseph Schumpeter is the conceptual framework

for this research study. Joseph Schumpeter was one of the most influential scholars of the

last century (Audretsch, 2015). His life’s work focused on the nature of economy and

how its evolution over time shaped society (Audretsch, 2015). Schumpeter believed that

the source of economic growth was creative destruction which was fueled by

entrepreneurs (Audretsch, 2015). Swedberg (2007) described Schumpeter’s theory as the

most promising of the entrepreneurship theories available.

Schumpeter described his entrepreneur as an agent of change inside an economy

(Dorin & Alexandru, 2014; Schumpeter, 2012). The actions of the entrepreneur were the

main mechanisms within an economy which caused the disturbances that made economic

development possible (Croitoru, 2012). Schumpeter described real economic growth and

development as the productivity increases achieved through innovation (Konstantakis,

Michaelides, & Papageorgiou, 2014). Schumpeter presented five types of entrepreneurial

 15

behavior and three main drivers for an entrepreneur (Dorin & Alexandru, 2014). The

entrepreneurial behaviors included: the introduction of a new good, the introduction of a

new method of production, the opening of a new market, the creation of a new

organization within an industry, or the monopolization of a new source of raw material

(Dorin & Alexandru, 2014; Konstantakis et al., 2014). The introduction of new and

different products, services, and processes challenged the status quo of the existing

marketplace and gave entrepreneurs a competitive advantage (Autio, Kenney, Mustar,

Siegel, & Wright, 2014). The drivers for an entrepreneur are: the desire for power and

independence, the mindset to triumph, and the happiness of creating (Dorin & Alexandru,

2014). These qualities in the small business entrepreneur encouraged them to seek out

novel ventures that took them off the normal business development path (Autio et al.,

2014). At the core of Schumpeter’s entrepreneurship theory is the process of innovation

(Bogliacino & Pianta, 2013). Schumpeter’s entrepreneur upset the conventional way of

doing things, and it was through the entrepreneur’s innovative actions that the small

business owner is able to achieve economic growth for his or her business (Baumol,

2015; Dorin & Alexandru, 2014; Schumpeter, 2012).

Small Business

The primary reason to start a business is for the revenue the small business owner

expects to receive from the operation of the business (Yusuf & Schindehutte, 2000).

Revenue is possible if the business can make a profit by bringing in more money than it

takes to operate the business. To accomplish this, the business owner must focus more on

the strengths of the business and focus less time on the rest (Lan, Bo, & Baozhen, 2014).
 16

Some factors that contribute to small business performance include business strategy,

business characteristics, and owner-manager characteristics (Blackburn, Hart, &

Wainwright, 2013).

The business owner’s decisions about where and what to focus on form the

business strategy of the company. The business strategy is how the company owners

align the business with its environment to create and maintain a competitive advantage by

maximizing its assets, resources, and competencies in a systemic way (Gumusluoglu &

Acur, 2016; Palmer, Wright, & Powers, 2001). Small business owners need to allocate

their limited resources to the activities that enhance their business strategies (Blackburn

et al., 2013; Lan et al., 2014). The activities that enhance small business strategies may be

financial, commercial, and even ethical (Garza, 2013).

Business characteristics include the number of employees, the company’s

financial position, and the age of the company (Blackburn et al., 2013; Uhlaner, van Stel,

Duplat, & Zhou, 2013). The company’s age often influences the organization’s processes

and product characteristics (Blackburn et al., 2013). Owner-manager characteristics

include age, gender, education, and business style (Blackburn et al., 2013). The common

age for owner-managers of business start-ups is middle age and post-retirement

(Blackburn et al., 2013). The gender composition of small business owners is 55% male

and 45% which are at least 50% women-owned (SBA, 2016). Only 1% of college and

university graduates are involved in the small business sector (Blackburn et al., 2013).
 17

History of Small Business Survival and Demise

New small business owners face challenges as they attempt to create and sustain

their business ventures. They lack key resources, have a limited market presence, and

depend on a niche customer base (Bengtsson & Johansson, 2014). Schumann, Scott,

Kalinowski, Kaliski, and Pragman (2014) illustrated the challenges faced by typical start-

up businesses through the use of a case study. Never earning a profit and not having the

money to pursue business opportunities that are presented to the small business owners

are some of the challenges facing start-ups (Schumann et al., 2014). Small business

owners have a difficult time keeping their businesses from failing because few of them

have access to enough financial and non-financial resources (Falkner & Hiebl, 2015).

Horne and Ivanov (2015) also studied the typical problems small business owners

encountered when they started their businesses. The methods small business owners use

to diagnose and address these problems can determine the business’ long term success

(Horne & Ivanov, 2015). Horne and Ivanov identified possible solutions to the three most

common problems: lack of formal protocols and structure, emphasis on short term profits,

and focusing only on the known.

There was no organization tracking small business failures before the 1950s. The

U.S. Congress founded the SBA on July 30, 1953 (SBA, n.d.). Small business failure

rates have been consistent from the time government administrators first tracked it to the

present (SBA, 2016). It was in 1981 that there was a suggestion that research on business

failure in the small business sector would prove useful (Gaskill, Van Auken, & Manning,

1993). Gaskill et al. (1993) found that there was a positive relationship between the
 18

amount of planning a small business owner engaged in and the business’s financial

performance. Gadenne (1998) focused on the association between a wide range of

success factors and small-firm performance for several industries and found that

receiving value for the money was important in the retail industry; emphasis on a

reward/discipline system was important in the service industry: and pricing products

lower than competitors was important in the manufacturing industry. Lussier, Sonfield,

Corman, and McKinney (2001) had different results from their study. They found no

differences between the strategies used by service and manufacturing firms (Lussier et

al., 2001). They found that the five most commonly used strategies were: working to

create a competitive advantage, maintaining innovation, lowering costs, maintaining

product/service levels, and creating a first-mover advantage (Lussier et al., 2001). Small

business researchers often use the Lussier 15 variable success versus failure prediction

model in their research (Halabi & Lussier, 2014). Capital, industry experience, planning,

education, and age are some of the variables used by both the would be and current

entrepreneurs and those who assist, train, and advise them to predict the possible fate of

the entrepreneurs in their business ventures (Fiore & Lussier, 2015). Halabi and Lussier

(2014) tried to increase the accuracy of their predictions by refining their earlier model.

Their updated model included the additional variable of firm performance (failed,

mediocre, and successful). They also added the use of the Internet as a variable and took

out highly correlated variables (Halabi & Lussier, 2014). Lussier and Corman (2015)

found that there is no reliable list of variables that can predict small business failure or

success.
 19

Decker, Haltiwanger, Jarmin, and Miranda (2014) explained the decline in small

business startup rates in the last 30 years and the impact it had on job creation and

economic dynamism. They used the method developed by Haltiwanger, Jarmin, and

Miranda (2013) who added age of the company information to existing data from the

Census Bureau’s Business Dynamics Statistics and Longitudinal Business Database.

Haltiwanger et al. (2013) found that if young firms survived, they grew more rapidly than

their mature counterparts. The problem was that young firms were more volatile and had

higher rates of job creation and destruction than their mature counterparts (Haltiwanger et

al., 2013). Decker et al. (2014) showed that startups contributed substantially to jobs

immediately but most startups failed. If they did survive, they did not grow (Decker et al.,

2014).

Small Business and Business Leadership

Dimov (2017) defined human capital as the knowledge and skills that an

individual brings to a task they set out to perform. For small business owners, the task is

starting and sustaining a business. Morrisette and Oberman (2013) stated that the most

important mission or goal of a leader is to keep the organization alive and to accomplish

this, they needed to adopt entrepreneurial practices and activities. Dimov further defined

human capital by using its indicators: education, work experience, entrepreneurial

experience, industry experience, and managerial experience. Dimov found evidence that

both education and work experience increased the chances of small business survival.

Baptista, Karaoz, and Mendonca (2014) examined the impact of founders’ backgrounds

on new firm survival and found that pre-entry capabilities and human capital of the
 20

founders played an important role in the early years of a startup. Prajogo and Oke (2016)

defined human capital as the level of creativity, knowledge, and idea development skills

that an individual brings to an organization. Human capital is an asset for achieving

competitive advantage through innovation (Prajogo & Oke, 2016). Small business

personnel would question the prevailing way of doing things and develop innovations

that are superior to the products and services in the existing marketplace through the

attainment of new knowledge (Prajogo & Oke, 2016). The innovative new products or

services would be more difficult for competitors to copy because of company specific

features that would give the firm a sustainable competitive advantage. Rauch and Rijsdijk

(2013) posited that general human capital, such as education level, was positively related

to the success of growth strategies for small businesses because it was important for

making progress during innovative projects.

Organizational leadership is a key factor in the success and survival of a small

business (Postma & Zwart, 2015). The ability of a leader to adapt to changing

environments by adjusting the structural context and strategic goals of the company is

critical to the success and survival of the business (Postma & Zwart, 2015). Postma and

Zwart (2015) identified various factors for leadership strategic action that ultimately

improved business performance. Koryak et al. (2015) determined that small business

owners/managers had two key tasks: to identify opportunities and to allocate resources to

take advantage of those opportunities. Lussier and Corman (2015) also found that

business success came from small business owners examining and understanding key

factors and then managing the specific situation at hand. Shinkle, Kriauciunas, and
 21

Hundley (2013) found that a firm must be in alignment with its environment, or it would

not be able to prosper. Glaub, Frese, Fischer, and Hoppe (2014) studied personal

initiative in small business managers or owners and the impact it had on small business

success. The researchers found that small business owners/managers with personal

initiative exhibited self-starting behavior, were proactive and future-oriented, and could

overcome barriers (Glaub et al., 2014). Covin and Lumpkin (2011) studied small business

leadership from the viewpoint of entrepreneurial orientation (EO). They described EO as

a firm-level inclination to engage in behaviors that lead to a change in the firm or

marketplace. These behaviors included risk-taking, innovativeness, proactiveness,

autonomy, and competitive aggressiveness (Covin & Lumpkin, 2011; Price & Stoica,

2015). Falkner and Hiebl (2015) conducted a systematic literature review of available

evidence on small business owners and found that the owners’ characteristics had a major

impact on the selection of a business strategy. Dunne, Aaron, McDowell, Urban, and

Geho (2016) conducted a study of 76 small business owners to try and identify the leader

characteristics that were associated with small business innovation strategies. The study

provided evidence that inspirational leaders are able to stimulate and increase the level of

innovation within their companies (Dunne et al., 2016).

Jansen, Curseu, Vermeulen, Geurts, and Gibcus (2011) researched leadership as it

related to information processing and strategic decision making in small businesses. The

strategic decision making responsibility in small businesses usually resides with one

person (Jansen et al., 2011). The characteristics of the decision maker, his/her

interpretation of the situation, and any social ties the decision maker has can influence the
 22

decision outcome (Jansen et al., 2011). External and internal social ties provide input to

the decision maker for processing information effectively and efficiently to arrive at an

effective decision (Jansen et al., 2011).

Pryor, Toombs, Anderson, and White (2010) looked at the models and standards

that small business owners were using to make their businesses successful and profitable

over the long term. Their findings were that the 5P’s Model (Purposes, Principles,

Processes, People, and Performance) was especially effective for small businesses. The

model integrated elements from popular management models, was easy to understand,

and could be integrated into the strategic management of small businesses (Pryor et al.,

2010).

In today’s dynamic business environment, it is difficult to explain why some

companies survive rapid changes in the environment while others must close their doors.

One possible explanation may be the business knowledge of the owners/managers of the

companies. Acs, Audretsch, and Lehmann (2013) found that background information was

important since business knowledge is one of the sources of innovative entrepreneurship.

Koellinger (2008) found that innovative entrepreneurship was more likely to occur if the

small business owner had academic education. Block et al. (2017) found that an

entrepreneur’s socio-demographic characteristic, such as experience, was an important

factor in the innovativeness of the small business owner. Pucci, Nosi, and Zanni (2017)

researched the impact managerial capabilities had on firm performance in new ventures.

The researchers found that small business owners with learning capabilities were better

able to detect and cope with market challenges.

 23

Small Business and Business Strategies

Small business survival is lowest at the beginning phase of the business (Lechner

& Gudmundsson, 2014). Lechner and Gudmundsson (2014) felt that it was critical for

small business owners to develop effective business strategies at the start of the business

if the business was to continue. Business strategies involve decision makers proceeding,

by aggressive and defensive actions, to try to gain a position for the firm to realize a

major return on investment (Porter, 1980). Ibrahim (2015) emphasized the importance of

a small business owner selecting the appropriate business strategy. The business strategy

sets a pattern of objectives, purposes, and goals for the business (Ibrahim, 2015). Owners

and managers designed different approaches to try to achieve their goals. Sumer and

Bayraktar (2012) analyzed 21 typologies and eight taxonomies in journals and strategic

textbooks to identify four generic business strategies: (a) differentiation, (b) cost, (c)

focus, and (d) hybrid strategy. Ibrahim studied 220 small firms to try to identify the

strategy types that were most frequently associated with profitable small businesses. The

researcher identified four strategy types that were pursued by profitable small firms:

niche, defender, prospector, and differentiation (Ibrahim, 2015).

Mirabeau and Maguire (2014) analyzed business strategies from the viewpoint

that strategies emerged as the result of autonomous strategic behavior. A business

strategy emerged as small business owners solved problems during the operation of the

business and allocated resources to meet business needs (Mirabeau & Maguire, 2014).

McDowell, Harris, and Geho (2016) examined how younger and older organizations

approached strategic orientation. Younger business owners generally had fewer resources
 24

and organizational structure which allowed them to have a more adaptive strategic

capability. McDowell et al. found that younger firms should have an external strategic

focus if they wanted higher performance. Karel, Adam, and Radomir (2013) researched

and documented the beneficial effects of strategic planning on the overall performance of

micro, small, and medium-sized enterprises. The researchers conducted a study of 677

organizations operating in the SME sector and found that the companies that prepared

detailed strategic documents had better results than those without written business plans.

Eddleston, Kellermanns, Floyd, Crittenden, and Crittenden (2013) found that small

business owners who developed and updated their business plans experienced fewer

failures than those who had a weak business plan. The researchers found that strategic

management had a positive impact on growth in first-generation businesses. Karel et al.

and Eddleston et al. found that small business owners using strategic planning must be

able to revise and formulate business goals in order to guide their business through

uncertain and variable conditions

Competitive strategies. Bigliardi (2013) stated that innovation has become a

prime source through which companies can gain a competitive advantage in the

marketplace. The author confirmed through empirical findings that an increase in the

innovation level of a company results in an increase in the company’s financial

performance (Bigliardi, 2013). Bigliardi showed through her research that innovations

developed to better address customer needs resulted in the greatest increase on financial

performance. The return on investment in innovations meant higher sales and firm

growth (Bigliardi, 2013). She also showed that these innovations enabled small
 25

businesses to differentiate themselves from their competitors (Bigliardi, 2013). De Jong

and Vermeulen (2006) described innovation as one of the most important competitive

weapons for small businesses.

Schumpeter speculated that small businesses would be the source of most

innovations. Small business owners must engage in competitive strategy analysis to

explore how their businesses operate in order to increase the business’s performance

(Lechner & Gudmundsson, 2014). Competitive strategy is important because it gives

direction to entrepreneurial behavior (Lechner & Gudmundsson, 2014). Implementing a

competitive business strategy based on differentiation or cost leadership may enable a

business to enjoy superior performance (Porter, 1980). Lechner and Gudmundsson (2014)

stated that it is important for a business owner to decide on one type of competitive

strategy to avoid being stuck in the middle (Lechner & Gudmundsson, 2014). The small

business owner must make the decision based on the business’ resources and the strategic

goals of the business (Lechner & Gudmundsson, 2014). The selection of a competitive

strategy that can give a business a sustainable competitive advantage will enable the

business to maintain superior financial performance well into its future (Banker et al.,

2014). Strategic business owners have focused on strategies designed around value-based

innovation to gain a sustainable competitive advantage (Gehani, 2013).

One of the few occasions to adopt a multiple-strategy approach is when the small

business owner is actively trying to sustain growth within declining markets (Bamiatzi &

Kirchmaier, 2014). The business owner would simultaneously pursue an innovative

differentiation and product or service customization strategy (Bamiatzi & Kirchmaier,

 26

2014). The other occasion when a multiple or mixed-strategy approach is beneficial is in

a transition economy with low market orientation (Shinkle et al., 2013).

Differentiation strategies. A differentiation strategy is based on products or

services that are perceived to be different from those of competitors (Banker et al., 2014).

Small business owners can offer products with superior design and excellent customer

support by investing in extensive research, product design, and marketing (Banker et al.,

2014). Lechner and Gudmundsson (2014) found that differentiation strategies were

positively related to small business performance. Banker et al. (2014) found that

businesses that pursued a differentiation strategy had a more sustainable financial

performance than those pursuing a cost leadership strategy because the business is harder

to imitate. There is, however, greater risk associated with differentiation strategies

because of the costly activities required to attain that differentiation (Banker et al., 2014).

Parnell (2015) researched crisis management and strategic orientation in small and

medium-sized enterprises. He found that businesses that emphasized product

distinctiveness as their competitive strategy had to deal with issues such as product

sabotage. The most widespread method of measuring firms’ performances is accounting

based which can be impacted by discretionary choices (Banker et al., 2014). Financial

personnel using only accounting based measures and current audit technology may

produce financial reports that show the business choices are risky and can lead to

unstable performance (Banker et al., 2014; Bentley, Omer, & Sharp, 2013).

Cost leadership strategies. A cost leadership strategy is based on operational

efficiencies (Banker et al., 2014). Small business owners can achieve operational
 27

efficiencies through economies of scale, process improvements using new technology,

paying attention to asset use and employee productivity, and minimizing discretionary

overhead (Banker et al., 2014). Small business owners who pursue a low-cost leadership

strategy must turn their companies into lean organizations (Gehani, 2013). To become a

lean organization, business owners need to operate their businesses as usual while

reducing costs to improve profits. Some popular cost reduction measures include

reducing waste and outsourcing offshore (Gehani, 2013). Lechner and Gudmundsson

(2014) found that cost leadership strategies were positively related to small business

performance. Parnell, Long, and Lester (2015) found that small business owners used this

strategy because it was considered conservative and safe. It does leave businesses

vulnerable to new competitors, and if too many small business owners pursue the same

market strategy, it will lead to the early demise of a large number of the businesses

(Parnell et al., 2015).

Growth strategies. The growth of small businesses has become so important in

the development process of an economy that governments are intervening through

incentives and grants to encourage the search for better ways to help small businesses

achieve growth (Nnamseh & Akpan, 2015). Past research has revealed the importance of

strategy in small business development and growth (McDowell et al., 2016). New venture

growth is a complex process. Many factors impact small business growth. The growth

process is not static but changes according to inputs from the environment, organization,

and entrepreneur (Audretsch, Coad, & Segarra, 2014; Dutta & Thornhill, 2014).

McDowell et al. (2016) examined the effect of strategic choices on small business
 28

performance. Their findings were that the small businesses that were willing to adjust

their strategies to match the prevailing market conditions were the most successful.

Nnamseh and Akpan (2015) conducted a study to examine the risk-benefits of strategic

management approaches in revitalizing the growth strategies of small businesses. The

researchers found that strategic management approaches such as the balanced scorecard,

Strengths Weaknesses Opportunities Threats (SWOT) analysis, Porter’s Five Factor

Forces, and Political Economic Social Technological (PEST) analysis all have risk-

benefits of positively influencing the growth strategies of small businesses. The business

areas influenced were product development, market development, market penetration,

and diversification (Nnamseh & Akpan, 2015). Dolfsma and Van Der Velde (2014)

conducted research that used new product announcements to measure the innovativeness

of small businesses. The researchers showed that it was small firms, not large or new

firms, that consistently and positively contributed to industry innovativeness (Dolfsma &

Van Der Velde, 2014). Achtenhagen, Brunninge, and Melin (2017) investigated the two

different growth modes for businesses: organic growth and growth by acquisitions. They

found that the business had to be at least medium sized to grow through acquisitions.

The small business owner must ensure that the growth strategy is linked to the

business’s resources, capabilities, and the external environment (Bamiatzi & Kirchmaier,

2014). Price and Stoica (2015) conducted a study to identify the resources utilized by

small business owners to try to determine which resources were critical to firm

performance. The researchers administered a survey to 229 SMEs in the United States.

Price and Stoica conducted statistical tests on five resource categories: human,
 29

organizational, social, knowledge-based resources, and entrepreneurial orientation (EO).

The researchers found that EO and knowledge-based resources were the most important

to the SMEs (Price & Stoica, 2015). Turner and Endres (2017) found that small business

owners who were able to bring their employees into alignment with the goals for the

business helped to prepare the organization for growth. The business owners used goal

alignment to maintain an appropriate level of control during organizational change. Even

though small businesses have considerable resource constraints, they are efficient at using

those resources for innovation (Rosenbusch, Brinckmann, & Bausch, 2011). Williams

(2014) investigated startups that failed to determine whether they failed due to lack of

resources. He found that resources alone did not determine success or failure.

Blackburn et al. (2013) saw new small businesses as being more flexible than

larger firms. The smaller scale of operations in small businesses means that owners

typically work in close proximity to their staff (Ng et al., 2013). Improved internal

decision making about profit-oriented decisions can help small business owners

overcome the high failures rates in small businesses (Ng et al., 2013). In small

businesses, the decision making powers are closer to the market. Small business owners

can discover new opportunities and take advantage of them to produce bursts of growth

(Blackburn et al., 2013). There can be growth even in volatile market conditions if small

business owners develop business-specific strategies (Bamiatzi & Kirchmaier, 2014).

Hamburg and O’Brien (2014) examined the use of e-learning and social

approaches to learning to help small businesses survive and grow by finding and gaining

access to new markets. The researchers conducted literature searches on the theoretical
 30

basis that e-learning is the perfect tool to enable lifelong learning. They found that

Communities of Practice enabled small business owners to gain expertise and advice

from knowledgeable mentors to help them operate their businesses so that the businesses

would survive and grow (Hamburg & O’Brien, 2014).

Micro firms are companies with fewer than 10 employees (Jaouen & Lasch,

2015). Jaouen and Lasch (2015) found that there are micro-firm owner-managers who

have no desire for growth. Their research focused on exploring the extent to which the

view of micro-firm owner-mangers regarding growth issues affected the entrepreneurial

behavior. Based on their answers, the researchers categorized the participants into four

owner-manager views: success, subsistence, hedonism, and paternalism. The findings

were that only two types (success and paternalism) wanted to grow their businesses. The

other two types (hedonism and subsistence) did not want to grow their businesses (Jaouen

& Lasch, 2015). Weber, Geneste, and Connell (2015) researched small business growth

from the standpoint of strategic goals and owner preparedness. The researchers found that

there were small business owners who were reluctant to expand their business because of

lifestyle choices (Weber et al., 2015).

Small business owners have varied backgrounds and abilities, start their

businesses for different reasons, structure their businesses to reflect their personal

choices, and operate in a wide range of sectors and locations (Wijewardena,

Nanayakkara, & De Zoysa, 2008). These factors that affect small business growth make it

difficult to model a growth strategy that would work for most small businesses (Storey,

2011). Lee, Hallak, and Sardeshmukh (2016) studied the drivers of performance in the
 31

food industry. They found that innovation in restaurants occurred in five areas: (a)

products, (b) services, (c) processes, (d) management, and (e) marketing. They described

that innovative actions in these areas resulted in positive restaurant performance (Lee et

al., 2016). For a small business to survive, the owner must choose a growth strategy that

is flexible enough to cope with the constantly changing external environment (Blackburn

et al., 2013; Lichtenthaler, 2016).

Strategic Alliances. Small business owners are good candidates for strategic

alliances because their businesses are small, there is poor resource availability, and they

have limited negotiating power (Garcia-Perez, Yanes-Estevez, & Oreja-Rodriguez,

2014). Individually, small business owners are unable to take advantage of opportunities

which require large production quantities or economies of scale. The only way small

business owners can address the issues related to their size is through networking

(Antonelli, Bruno, Taurino, & Villa, 2015; Villa & Bruno, 2013). Paradkar, Knight, and

Hansen (2015) found that alliances with partners were an important asset for the startups

in their study. A strategic alliance is a cooperative arrangement between small business

owners to work together to improve their competitive positions and performances (Zhao,

2014). The term for this type of cooperation is horizontal networking. The small business

owners are at a similar level in the value chain and collectively pool their resources to

compete for large scale orders (Villa & Bruno, 2013). Entrepreneurial and innovative

small business owners use strategic alliances to effectively compete in today’s markets by

improving their internal operations, mitigating risk, and entering new market segments

(Zhao, 2014). When forming strategic alliances, small business owners must still take a
 32

competitive approach to leverage their limited resources for maximum improvement in

business performance (Dunne et al., 2016). Small business owners, whether consciously

or unconsciously, calculate the tradeoffs of business alliances by estimating the resources

required versus the likely gains (O’Donnell, 2014).

Coopetition is when small business owners work simultaneously to compete and

cooperate with their rivals (Akdogan, Dogan, & Cingoz, 2015; Zhao, 2014). The

owners/managers of small businesses use the coopetition strategy when they realize that

complementing each other’s business activities would create more value than can be

accomplished through their individual business strategies (Czakon, Mucha-Kus, &

Soltysik, 2016). Coopetition is different than the negative strategy of collusion in terms

of objectives, time, and scope (Czakon et al., 2016). The major objective of coopetition is

to create efficiencies which results in common benefits for all of the participants in the

market (Czakon et al., 2016).

Even though strategic alliances are key to gaining competitive advantages, most

of the alliances fail halfway through the agreed upon time frame (Zhao, 2014). For

coopetition to be successful, the small business owners involved need to avoid the rivalry

that pits their businesses against each other. The owners/managers of small businesses

must understand that coopetition is human relation based and that an agreeable

personality is the key to making coopetition work (Geraudel & Salvetat, 2014).

Thomason, Simendinger, and Kiernan (2013) described that successful coopetition

required trust, commitment, and mutual benefit to work. Small business owners may

even use coopetition to create or sustain opportunities by collaborating with large,

 33

powerful competitors (Bengtsson & Johansson, 2014). The owners/managers of small

firms may develop a working relationship with the managers of large firms, within the

same market, since they use similar or complementary resources (Bengtsson &

Johansson, 2014). The common goal is not to compete against each other but to compete

together against the world.

Researchers presented business strategies that had a positive impact on small

business performance. For example, Lechner and Gudmundsson (2014) not only

presented the business strategies that had a positive impact but they also recommended

the strategies to avoid. They suggested that small business owners stay away from

strategies that involved risk-taking and competitive aggressiveness because those

strategies had a negative impact on both competitive strategies and performance (Lechner

& Gudmundsson, 2014).

Environmental Factors. Researchers have conducted studies on a firm’s ability to

operate and grow within different types of business environments. If the owner of a small

business expects the business to perform better, the owner should try to match the

business to the requirements of the environment in which the business operates (Shinkle

et al., 2013; Shirokova, Bogatyreva, & Beliaeva, 2016). A favorable or benign business

environment is one with low hostility and high market growth (Shirokova et al., 2016).

An unfavorable or hostile business environment is one in which there are conditions that

may threaten the survival of the business (Shirokova et al., 2016). Wang, Hermens,

Huang, and Chelliah (2015) listed the external factors as: (a) competition, (b)

technological turbulence, and (c) demand uncertainty. Small business owners usually lack
 34

control over the conditions in their external environment (Shirokova et al., 2016).

Bamiatzi and Kirchmaier (2014) explored the strategies used by small firms to

actively sustain growth within declining markets. They analyzed firms that achieved high

growth for 4 consecutive years while operating in declining industries. The researchers

found that the decision makers at those firms adopted a multiple-strategy approach in

which they simultaneously pursued innovative differentiation and product or service

customization strategies. The decision makers intentionally searched for high-margin

products, avoided aggressive price competition, and maintained tight control of costs

(Bamiatzi & Kirchmaier, 2014).

Zulu-Chisanga, Boso, Adeola, and Oghazi (2016) studied new product success in

a turbulent environment. Their sample was 325 small and medium exporting firms in the

United Kingdom (UK). The researchers showed that environmental turbulence weakened

the relationship between new product success and financial performance (Zulu-Chisanga

et al., 2016). The necessity to devote greater resources to new product activities

depressed financial performance (Zulu-Chisanga et al., 2016).

Cohen, Naoum, and Vlismas (2014) investigated the relationship of intellectual

capital (IC) in the strategies of small businesses during a financial crisis. The researchers

sent structured questionnaires to 162 Greek SMEs. The researchers found that intellectual

capital is an asset of the company and should be strategically managed the same way that

other company assets are managed. They found that making the best use of the

company’s assets helped small businesses survive and grow (Cohen et al., 2014).
 35

Small Business and Organizational Change

The demands for organizations to change come from their environment, increased

competition, and the recent global financial crisis (Kogetsidis, 2012). Pataki and Padar

(2013) studied how multiple, continuous changes have become normal in the business

environment. They found that in the early 1970s, only 5% of corporate America

experienced continuous, overlapping change. Since the 1990s, 75% of them are

experiencing continuous overlapping change (Pataki & Padar, 2013). Change is a

constant condition in organizations because every business needs to identify where it

needs to be, in the future, to remain competitive. Once the small business owner

identifies the future, the organization must plan and make the changes that will get the

organization to where it needs to be (Kogetsidis, 2012). For small businesses to survive

as the business environment changes, business owners must find ways to improve the

company and how it operates (Dorin & Alexandru, 2014). These improvement measures

usually rely on discovering and implementing new opportunities so that the business can

alter itself to remain competitive and survive (Dorin & Alexandru, 2014). With the

advancements in information technology and the effectiveness of social networks, small

business owners now have greater access to non-redundant contacts which means a

greater range of opportunities (Dorin & Alexandru, 2014).

The environment would be the community in which the businesses are located.

Bates and Robb (2014) wrote about the viability of doing business in U.S. urban minority

communities. The researchers found these minority neighborhoods to be less desirable

markets which contributed to low profitability and small business closures (Bates &
 36

Robb, 2014). Parsa, Van Der Rest, Smith, Parsa, and Bujisic (2015) set out to determine

why restaurants failed in Boulder, Colorado. Their study supported the long-held industry

belief regarding avoiding locations where restaurants have already failed. Local policy

also has a major impact on small business growth. McFarland and McConnell (2013)

studied local policy implications during the recent recession. The researchers found that

local governments positively impacted small business growth by creating a supportive

culture between the local public and private sectors (McFarland & McConnell, 2013).

Business owners make organizational changes when they face increased

competition. Developing a competitive strategy means attempting to prepare a business

for increased competition. Armstrong (2013) studied the competitive strategy preferences

among small U.S. businesses. He studied 754 small firms and found that small business

owners can concentrate on both survival and growth (Armstrong, 2013). Small business

owners would be able to pursue both goals if they understand the relationship between

strategy preferences and the impact those strategies have on organizational performance

(Armstrong, 2013).

Business owners also make organizational changes when they encounter the need

to bring new technology into their businesses. Small businesses look to new technology

to level the playing field. Bigliardi (2013) researched the effect of innovation on the

financial performance of small businesses in the food machinery industry. The use of

technology to develop innovation did not impact the financial performance of the 98

SMEs studied (Bigliardi, 2013). Abebe (2014) conducted research to try to answer two

questions dealing with small businesses. The first question dealt with the relationship
 37

between e-commerce adoption and small business performance. The second question

dealt with whether entrepreneurial orientation (EO) affected the relationship between e-

commerce adoption and small business performance (Abebe, 2014). Abebe sent

structured questionnaires to the owner-managers of 55 SMEs and found that e-commerce

adoption played an important role in increasing small business performance. The

researcher also showed that managers with a high level of EO were more likely to

implement e-commerce technology (Abebe, 2014).

Small Business and Finance

Finance is a key component of every business. Small business owners, despite

limited financial resources, must find new and creative ways to pay for the startup and

operation tasks associated with every business (Turner & Endres, 2017). Gomezelj and

Kusce (2013) analyzed the determinants of business start-ups and their impact on

entrepreneurial performance. The researchers used a multiple linear regression model to

identify the strength, direction, and impact of different factors of the start-ups’

performance. Their findings were that the most commonly used indicators for firm

performance were financial (Gomezelj & Kusce, 2013).

To start the business, the entrepreneur often self-finances the initial phase. Other

financial sources for starting a business include bricolage, which is using whatever

financial resources that happen to be available, and crowdfunding (Fraser, Bhaumik, &

Wright, 2015). Small business owners generally lacked appropriate financing according

to Xiang and Worthington (2015). For their research, Xiang and Worthington used a

survey of 2,732 SMEs to explore the firm-level determinants of finance-seeking

 38

behaviors and outcomes for SMEs. The researchers discovered that the influential factors

for small business owners seeking finance were profitability and growth (Xiang &

Worthington, 2015). For the small business owner to grow the business, there is often a

need to borrow money from an outside source. McDowell et al. (2016) posited that new

small business owners had little access to financial resources. The lack of available

financial resources limited the strategic options available to new small business owners

(Blackburn et al., 2013). Even established small business owners need access to the

financing they need to bring innovative products and services to market (Lee, Sameen, &

Cowling, 2015).

Comeig, Del Brio, and Fernandez-Blanco (2014) researched the financing of

small business projects. Following the financial crisis of 2008-2010, there had been a

decline in both debt and equity financing to small businesses which resulted in a negative

impact on firm performance (Fraser et al., 2015). One possible reason for a decline in

debt funding to small businesses may have been the high cost of screening smaller and

younger businesses (Fraser et al., 2015). The small business owners needed to either have

a record of accomplishment or were willing to demonstrate their commitment to the

business by providing collateral (Fraser et al., 2015). Small business owners seeking

equity financing also needed to prove their track records (Fraser et al., 2015).

Researchers studied how financial institutions made their decisions about

entrepreneurial competence. For example, Moro, Fink, and Kautonen (2014) and Durkin,

McGowan, and Babb (2013) studied how banks assessed entrepreneurial competence.

One dimension of entrepreneurial competence was the economic performance of the new
 39

small firm (Shaffer, Hasan, & Zhou, 2014). Decision makers at financial institutions and

investors can use the financial statements of small firms to make their decisions about

entrepreneurial competence (Carraher &Van Auken, 2013). Aldrich (2014), in a paper

presented at the annual meeting of the Academy of Management, discussed what he

called the democratization of entrepreneurship. He detailed how internet-based sharing,

marketing, and distribution platforms gave nascent entrepreneurs access to resources that

were previously unavailable to them through the new funding instrument called

crowdfunding (Aldrich, 2014). Chemmanur and Fulghieri (2014) studied the role of

financial intermediaries in nurturing entrepreneurial firms and the mechanisms through

which they do so. Their findings provided a better understanding in two broad areas.

First, the role of venture capitalists, angel investors, and other intermediaries in financing

new firms and fostering the growth of those firms. Second, the effects of financing by

various intermediaries and the legal environment in which these firms operated

(Chemmanur & Fulghieri, 2014).

Researchers designed models that they used to try to predict small business

failure. For example, Bhandari and Iyer (2013) built a new model to predict business

failure using cash flow statement based measures. The data for 50 firms were from

Compustat’s list of inactive firms. The researchers matched these firms against 50 active

firms from the same Standard Industrial Classification (SIC) code. They used a

multivariate technique to construct the failure prediction model. The model was

successful in classifying 83.3% of the original grouped cases (Bhandari & Iyer, 2013).
 40

Finance internal to the operation of the business is an important component of

small businesses. Ng et al. (2013) researched revenue management accounting in small

businesses. The researchers found that revenue management accounting practices

designed for use in large businesses did not align with the information needs of small

business managers (Ng et al., 2013). Bruce, Deskins, and Gurley-Calvez (2014)

examined depreciation rules and its impact on small businesses. They specifically

explored the treatment of capital purchases as current expenditures under the Section 179

expensing rules. Their findings were that accelerated depreciation allowances were not

necessarily good for all small businesses (Bruce et al., 2014). Camacho-Minano,

Segovia-Vargas, and Pascual-Ezama (2015) developed a model to determine insolvent

firms. They studied 1,387 bankrupt Spanish firms to identify the characteristics the

companies had in common. They came up with a list of five variables for companies to

monitor. These included: sector, size, number of shareholders, return on assets (ROA),

and cash ratio (Camacho-Minano et al., 2015). Camacho-Minano et al. concluded that

small business owners could monitor the five variables to predict the chances for the

survival of their businesses. A financially strong company would have high values for the

ROA and cash ratio (Camacho-Minano et al., 2015). Innovation resulting in the creation

and management of customer offerings through new products and services will enable the

small business owners to maximize revenue generation (Ng et al., 2013). The main focus

of small business owners is the generation of revenue to pay for day-to-day operations

which ensures that the business survives (Ng et al., 2013).

 41

Small Business and Owner Characteristics

Nascent entrepreneurs are people who are engaged in creating new ventures.

Stuetzer, Obschonka, and Schmitt-Rodermund (2013) examined the effects and origins of

balanced skills among nascent entrepreneurs. The researchers found that a balanced skill

set was the essence of entrepreneurial human capital and that venture creation success

was the primary function of that skill set (Stuetzer et al., 2013). Bayarcelik, Tasel, and

Apak (2014) wanted to determine the most important innovation factors for small

businesses. The researchers found that management skills were the most important factor

for decision makers (Bayarcelik et al., 2014). Vadnjal and Kociper (2013) completed a

study on the competencies needed by entrepreneurs to successfully run a growing

business. They interviewed 23 entrepreneurs and asked them to rank a list of ten

management skills from a literature survey. The entrepreneurs ranked the skill of

understanding customer needs first, followed by persevering, creative thinking, story-

telling and building trust (Vadnjal & Kociper, 2013). New small business owners are

often skilled in product/service knowledge and tend to focus on customer relationships to

grow their customer base (McDowell et al., 2016). Their businesses are small enough

where the new business owners can easily adapt their company’s strategic focus to gain

additional market share (McDowell et al., 2016).

Small business owners must allocate resources to cope with the constantly

changing business environment (Mariadoss, Johnson, & Martin, 2014). One skill that

small business owners should have is effective decision making. Mariadoss et al. (2014)

studied the impact of a firm’s strategic intent on managerial actions and how those
 42

actions affected firm performance. The researchers posited that strategically aggressive

firms sought viable alternatives to research and development investments. Small business

owners used those alternatives to generate cost savings and develop better solutions

which maximized company performance (Mariadoss et al., 2014). Etzioni (2014) studied

the humble decision making theory which is a set of guidelines for general decision

making based on empirical evidence or logic. The rules stated that all decisions are

experimental and the less one knows, the greater one’s reserves ought to be. The less that

is known, the more the decision makers should hedge and that decision making should

have built-in delays (Etzioni, 2014). Etzioni’s goal was to encourage the adoption of the

humble decision making theory which may prevent decision makers from erring,

encourage wise decisions, and enhance overall contentment by helping those making and

affected by decisions to moderate their expectations (Etzioni, 2014). Gomezelj and Kusce

(2013) emphasized the importance of perceived performance and how it determined if

entrepreneurs felt satisfied with their success.

Successful entrepreneurs are able to modify their decision making process to

match the situation. Murmann and Sardana (2012) viewed how successful entrepreneurs

varied their decision making styles, sometime relying on heuristics and sometimes

relying on systematic analysis. The researchers analyzed the decisions of successful

entrepreneurs on two dimensions: level of expertise with the particular context/situation

and the level of ambiguity in the business context. They found that successful

entrepreneurs were not prone to deliberate high risk taking behaviors but selected the

type of decision process that was best suited to reduce the level of risk inherent in
 43

pursuing a particular decision (Murmann & Sardana, 2012).

Owning one’s own business has always been part of the American dream for men.

In the 1980s and 1990s, more women were claiming that dream for themselves. The

problem was that women tended to have less accessibility to financial, human, and social

resources than men (Mijid & Bernasek, 2013; Morris, Miyasaki, Watters, & Coombes,

2006; Powell & Eddleston, 2013; Warnecke, 2017). Accessibility to fewer resources

meant that female-owned businesses tended to be smaller in size with fewer employees,

sales, and assets than male-owned businesses (Lowrey, 2011). From the perspective of

lenders, female business owners are less desirable because they concentrate their

businesses in the service and retail sectors which are among the least profitable industries

(Lowrey, 2011). Mijid (2015) determined that loan officers do hold a stereotypical

misperception that women business owners are less capable of repaying a loan than male

business owners. The fear of rejection when applying for loans has forced women small

business owners to forgo potential growth opportunities which may impact their success

and survival (Mijid, 2015).

Loscocco and Bird (2012) wanted to know why women lagged behind men in

small business success. They studied the issue from a social construction perspective by

analyzing the various options men and women must balance as small business owners

and as family members. Loscocco and Bird showed that as long as women have the

primary responsibility for home and family, they will not be able to compete with men.

Different social expectation cause women to make constrained choices about the kinds of

businesses to start and the amount of time they can devote to their businesses (Loscocco
 44

& Bird, 2012).

Harms, Luck, Kraus, and Walsh (2014) considered the reasons why older

employees, around age 50, left paid employment to become self-employed. This became

a key concern for their current employers because when they left, they took with them

valuable knowledge out of the company (Harms et al., 2014). Harms et al. explained that

a key motivational factor of gray entrepreneurs was the desire to balance ambition with

flexibility. The researchers also suggested that the gray entrepreneurs were highly

ambitious and tech-savvy (Harms et al., 2014).

Powell and Eddleston (2013) investigated family support and whether female and

male entrepreneurs experienced different outcomes in entrepreneurial success because of

it. They examined how experiences in the family domain of small business owners

benefited their experiences in the business domain. Powell and Eddleston found that

female entrepreneurs experienced positive links between family domain and business

domain while male entrepreneurs did not. The family domain of female small business

owners influenced new venture creation, which influenced venture creation processes,

which in turn influenced venture level outcomes such as survival and firm performance.

Those factors did not have a positive link to the entrepreneurial success of the men

(Powell & Eddleston, 2013).

Small Business and Ownership Type

The type of ownership selected for a company impacts the company’s

performance (Blackburn et al., 2013). Structural conditions within which the small

business owner operated the business strongly determine its performance (Blackburn et
 45

al., 2013). Age, size, and sector are the structural constraints that can impact performance

(Blackburn et al., 2013). The method of measurement is also important and results are

different according to the measure of performance used (Blackburn et al., 2013). Barbera

and Moores (2013) researched whether family firms were more or less productive than

non-family firms. The researchers found that family labor contributed significantly more

to output than for comparable non-family firms (Barbera & Moores, 2013).

Family owned. Another factor that can affect the success or failure of a business

is whether it is family-owned. Laforet (2013) researched the innovation characteristics of

young and old family-owned businesses. The researcher focused on the innovation

factors of organization type, age, and size (Laforet, 2013). The author determined that

young family business owners were highly innovative initially with family employees

involved in new product launches. Older family business owners had non-family

involvement in new product launches (Laforet, 2013). These small business owners

avoided failure due to family pride and long-term orientation which gave them

persistence in the wake of others’ failures (Amankwah-Amoah, 2014; Eddleston,

Kellermanns, & Zellweger, 2012). Eddleston et al. (2012) established that family

members, acting as stewards, chose to make decisions that focused on the long-term well-

being of the business instead of pursuing short term gains. This long-term orientation

allowed family businesses to pursue opportunities that their short-term-oriented

competitors would not pursue (Eddleston et al., 2012). Amankwah-Amoah (2014) found

that the factors of past events (i.e. past successes), present circumstances (i.e. nature of

the failure) and future outlook (i.e. foreseeable opportunities) all contributed to strategic
 46

persistence.

Gonzalez-Cruz and Cruz-Ros (2016) analyzed the impact of family involvement

in a business and discovered that a business needed a family CEO to achieve high

performance. The CEO needed to receive advice, support, and be responsible to a non-

family Board of Directors (Gonzalez-Cruz & Cruz-Ros, 2016). Family involvement was

beneficial only up to a certain point (Gonzalez-Cruz & Cruz-Ros, 2016). Stewart and Hitt

(2012) promoted the fact that there are advantages in family firms behaving more like

nonfamily firms. Family involvement has a positive effect for public firms and an

insignificant or negative effect for private firms according to Stewart and Hitt. The

performance of privately held family firms did not compare favorably with privately held

nonfamily firms (Stewart & Hitt, 2012).

Small Business and Innovation

Researchers have studied the impact of innovation on small business success.

Members of the business community use the word innovation to describe something new

that is a valued addition to the world (Euchner, 2013). Yildiz, Basturk, and Boz (2014)

analyzed the effect of innovativeness on business performance. They conducted their

quantitative research with 576 people in the service and industrial sectors. The

researchers showed through their correlation analysis that there is a high correlation

between innovativeness and business performance (Yildiz et al., 2014). Yildiz et al.

showed that innovativeness had a significantly positive effect on business performance.

Omri, Frikha, and Bouraoui (2015) conducted a study to test their hypotheses that

innovation plays a mediating role between a business’ resources and entrepreneurial

 47

success. They tested the relationship between human, social, and financial capital and

small business success (Omri et al., 2015). Omri et al. collected data about human, social,

and financial resources from 228 micro-enterprises and their innovation and success

levels. Their quantitative analysis confirmed that innovation played an important role in

mediating the impact of the three types of resources on small business success (Omri et

al., 2015). The researchers found that small business owners who wanted to improve their

chances of success needed to invest in innovation activities (Omri el al., 2015).

Mas-Tur, Pinazo, Tur-Porcar, and Sanchez-Masferrer (2015) posited that just

being involved in innovation activities is not a guarantee of success. Small business

owners need other variables such as educational attainment to perform the activities

required in business creation (Mas-Tur et al., 2015). Galindo and Mendez-Picazo (2013)

conducted research that included the variables of social climate and the role of

institutions as important variables for small businesses to improve performance and

obtain higher profits. Financial institutions provide the financial resources required for

small business owners to develop their innovation activities while society must be

supportive of the small business owners’ efforts to carry out those activities (Galindo &

Mendez-Picazo, 2013).

Zulu-Chisanga et al. (2016) argued that a firm’s financial performance is the

result of the firm’s innovative efforts. Innovative new product success leads to superior

financial success (Zulu-Chisanga et al., 2016). Small businesses that develop and

successfully market new products have higher sales and profits because they serve

multiple and diverse customer segments resulting in a greater market share (Zulu-
 48

Chisanga et al., 2016).

Innovative efforts usually require the introduction of new methods or technical

capabilities into the organization (Euchner, 2013). Hervas-Oliver, Sempere-Ripoll, and

Boronat-Moll (2014) studied process innovation strategy and its effect on firm

performance. The researchers measured the effectiveness of product innovation with

sales indicators and they measured the effectiveness of process innovation by cost

reduction or the improvement of flexibility in production (Hervas-Oliver et al., 2014).

Hervas-Oliver et al. established that improved production-oriented innovative

performance was due to the acquisition of knowledge from external sources within the

industry. The researchers determined that R&D investments did not improve or influence

production-oriented innovative performance production (Hervas-Oliver et al., 2014).

Webb, Ireland, and Ketchen (2014) described entrepreneurs as those who chose

the rules upon which they operated their small businesses. These small business owners

complied with the rules that created value and did not comply with the rules that did not

create value (Webb et al., 2014). The small business owners avoided unwise risk by

considering the positive and negative impact of each decision (Galindo & Mendez-

Picazo, 2013). They determined the rules to follow and the risk to take through

knowledge management (Fraser-Arnott, 2014; Galindo & Mendez-Picazo, 2013). Fraser-

Arnott (2014) documented the benefits that knowledge management brings to

organizations. The benefits included increased efficiencies through the reduction in

duplication of effort, reduced research and development costs, improved strategic

planning, and greater opportunities for innovation (Fraser-Arnott, 2014). Mazzei, Flynn,
 49

and Haynie (2016) explored what it would take to prevent a firm’s early success from

being its only success. They focused on the positive influences of ability, commitment,

and feedback to develop a system of high performance work practices that would lead to

innovative behavior (Mazzei et al., 2016). Mazzei et al. determined that SMEs need to

recognize the value of employees and that the employees are the primary source of

innovation in a small business. De Jong and Vermeulen (2006) gave credit to innovation

for a firm’s ability to create core value. The core business is the business activity that is

most important to a small business because it is the major source of profit (Lan et al.,

2014).

Adjusting to the changing environment requires new ways of doing things.

Coming up with new ways of doing things requires innovative thinking. Bigliardi (2013)

defined innovation as the production, diffusion, and translation of existing and new

knowledge to produce new or modified products or services. Innovative thinking does not

always mean a new product or service. According to Schumpeter (2012), it may be new

combinations of existing processes (Dolfsma & Van Der Velde, 2014; Sahut & Peris-

Ortiz, 2014). Industries dominated by small firms are more innovative than industries

where large firms dominated (Dolfsma & Van Der Velde, 2014). The researchers also

showed that established small businesses were the source of industry innovativeness.

Dolfsma and Van Der Velde showed that new firms entering an industry actually had a

negative impact on industry innovativeness.

Bozkurt and Kalkan (2014) tested the strategies, innovation types, and factors

influencing innovation for small businesses. It was discovered that internal and external
 50

factors were very important for small businesses. Small business owners applied process

and marketing innovations more frequently than product and organizational innovations

(Bozkurt & Kalkan, 2014). Lechner and Gudmundsson (2014) thought that

innovativeness was most highly related to differentiation strategy.

Strategic entrepreneurship involves the creation of competitive advantage through

the identification of new opportunities (Lechner & Gudmundsson, 2014). Small business

owners have limited resources and often do not have personnel on hand to focus on

innovation. The lack of dedicated resources responsible for recognizing opportunities

makes it extremely important for small business owners to be able to recognize

opportunities. Hulbert, Gilmore, and Carson (2015) researched whether opportunity

recognition is a managerial or entrepreneurial function. The researchers found that

opportunity recognition was a result of experiential knowledge (Hulbert et al., 2015).

Both managers and entrepreneurs need to have knowledge of the market and be alert to

opportunities (Hulbert et al., 2015). In addition to experiential knowledge, both managers

and entrepreneurs need to have the ability to be creative and respond to the situations so

that their companies may benefit from the opportunities (Hulbert et al., 2015). Ngo and

O’Cass (2013) studied innovation and business success when customer participation was

involved in the innovation process. The researchers showed that customer knowledge and

motivation might be factors that influence customer relationship and company

performance (Ngo & O’Cass, 2013). They recommended that small business owners

develop innovation capabilities with customer participation (Ngo & O’Cass, 2013).
 51

Transition

Section 1 contained the foundation of this research study, the background,

purpose, significance, and nature of the study. Section 1 included the research question

and interview questions in addition to the conceptual framework, assumptions,

limitations, and delimitations of this research study. Section 1 concluded with a literature

review of previous studies covering the topic of business strategies for small business

survival and the sub-topics of business characteristics and owner characteristics.

Section 2 contains the details of the project, the purpose, the role of the

researcher, the participants, the research method and design, the population and sampling,

and a discussion about ethical research. I provide details about data collection, the

instrument, technique, data organization, and data analysis. To conclude Section 2, there

is a discussion on reliability and validity.

 52

Section 2: The Project

In Section 2, I provide an explanation of the research purpose and research

process. The section contains information about the research methodology and the

reasons for selecting a qualitative, multiple case study. There is a discussion about the

population, sample, and participants that supplied the data. I discuss the data collection

process along with the instrument and technique that I used and how I organized and

analyzed the data. Section 2 concludes with a discussion about the reliability and validity

of the data.

Purpose Statement

The purpose of this qualitative multiple case study is to explore business

strategies new small business owners used to sustain their business beyond the first 5

years of operation. The target population was five San Francisco Bay area small business

owners in the food and beverage industry who have a strategy to operate their business

for at least 5 years. The data from this study may contribute to positive social change by

educating small business owners on strategies to sustain their business beyond 5 years.

Positive social change may result if the new small business owner can become a viable

member of the local community by creating jobs, reducing unemployment, and

increasing tax revenue.

Role of the Researcher

I was the data collection instrument and central figure for this qualitative research

study. Data collection is a key part of the research study. Patton (2015) mentioned that

the role of the central figure in a qualitative research study is to collect data through in-
 53

depth open-ended interviews and written communications. My selection of the two data

collection methods was dependent on the best methods to obtain the data that would

provide answers to the research question regarding what business strategies new small

business owners use to sustain their business beyond 5 years of operation. My role was to

do the best job possible with the resources that were available to me. One of my key

responsibilities was to link the interview questions to the research question. Robson and

McCartan (2016) stated that the researcher must ensure that the language of the questions

is understandable and unambiguous to the respondents. Xu and Storr (2012) suggested

that researchers identify, code, categorize, label, and interpret all responses from

participants. I was responsible for performing these tasks. My role was to have a

systematic and professional approach to the data collection tasks.

The relationship I have with this topic is that I have owned and operated small

businesses since 1976. Most of the businesses were successful, but there were two that

failed. To date, I have continued to wonder if there were some things that I could have

done better that would have kept those businesses from failing. I do not have any

relationship with the participants in the study other than the fact that they also operate

small businesses in the San Francisco Bay area.

Ethics involves the principles of what is right and what is wrong. The researcher

should carry out research ethically. In all phases of the research study, the researcher

should adhere to the standards and codes of conduct set for quality research (Robson &

McCartan, 2016). The Belmont Report is one of the leading works concerned with ethics

and health care research. The purpose of the Belmont Report is to protect the subjects and
 54

participants in clinical trials and research studies (Sims, 2010). My role as the researcher

is to protect the rights of the human subjects participating in my research study.

I conducted one-on-one interviews. Wolgemuth et al. (2014) conducted studies on

the impact of interviews on participants and found that participants described their

interviews as emotionally intense, distressful, and sometimes painful. The Belmont

Report outlines the three ethical principles to guide human research. The three principles

are: beneficence, justice, and respect for persons. Beneficence requires all researchers to

take measures to identify and reduce potential risks and to inform all subjects about those

potential risks. Justice requires that I describe the risks and benefits equally and to

disseminate any research findings, both good and bad. Respect for persons requires all

researchers to obtain informed consent from the participants before conducting research.

The Belmont principles protect vulnerable populations such as racial and ethnic

minorities, women, and children (Quinn, Kass, & Thomas, 2013). I reviewed the three

ethical principles in the Belmont Report and complied with the principles throughout my

research study. Having a specific set of rules to comply with aids ethical decision making

because there are less opportunities to make moral rationalizations (Mulder, Jordan, &

Rink, 2015). Quinn et al. (2013) found that for researchers to work ethically and

effectively in communities in which they differ by race, ethnicity, social class, and

culture, training is required. Researchers with training in the interpersonal skills and

humility can work effectively with diverse groups. Being well intentioned may not be

sufficient in conducting human subject research (Quinn et al., 2013). I have and presently
 55

still am a small business owner in the food and beverage industry. I did not need formal

training to interact with the participants in my research study.

Selection bias is when the factors that influence the selection of participants can

affect the study’s outcome (Sica, 2006). Information bias is when the selection of the

method of collecting data may result in misclassification of study cases (Sica, 2006).

Interviewer, reviewer, and measurement bias all fall under this category. Researcher and

participant bias is present in all social research (Fields & Kafai, 2009). Outcome bias is

when researchers consider questionable procedures to be acceptable if the outcome is

favorable to the researcher or participant (Sezer, Zhang, Gino, & Bazerman, 2016). Sica

(2006) studied why different biases occurred in research. To mitigate intentional bias and

avoid viewing data through a personal lens, I made sure I understood how and why

different biases occurred. I referred to the article as a constant reminder of what I needed

to avoid as I wrote up my research.

Participants

Many researchers using the qualitative method rely on interviews with individuals

with pre-defined characteristics (Patton, 2015). The researcher would select the

characteristics of the individuals that could provide information that would help answer

the interview question (Hagaman & Wutich, 2017; Kristensen & Ravn, 2015). The

eligibility criteria for the selection of the participants for this study were small business

owners in the food and beverage industry who have operated their businesses

continuously for at least 5 years. The geographic area for the small business was the San

Francisco Bay area. The rationale for the selection criteria was that over half of new
 56

small businesses will not be in operation after 5 years (SBA, 2016). The small business

owners that are still operating after 5 years might have strategies that enabled their

business to survive. Documenting the mode of operation of successful business owners

may reveal the business strategies that affected the performance of their small businesses.

It was important for me to carefully and critically think through my choice of a

participant selection process. Kristensen and Ravn (2015) found that the selected

interviewees could affect the knowledge that a researcher produces through a research

study. The participants selected would only be able to provide data from their personal

viewpoint (Reybold, Lammert, & Stribling, 2012). Limiting the geographic area of the

participants to the San Francisco Bay area would enable an adequate sample size.

I sent an open letter to the members of my business network in the San Francisco

Bay area. I initiated contact with those who showed an interest in participating in my

research study. When I interacted with the potential participants, I avoided using any

social cues that may cause the participants to categorize or make inferences about me or

the purpose of the study (Neu, 2015). It was important to create a foundation of genuine

trust so that participants could feel comfortable about sharing their answers (Kornbluh,

2015). I used complete honesty to establish a working relationship with the participants. I

did not engage in any type of deception during the research process. Deception is the

explicit and intentional provision of false or misleading information about the facts or

people involved (Barrera & Simpson, 2012). The participants trusted my actions because

I was always honest with them and respectful of who they were. The participants may

differ from me in terms of race, ethnicity, social class, and culture. I treated each
 57

participant with respect and humility. Treating each participant with respect and humility

is important since it was impossible to accurately determine if any type of deception

would produce undesirable downstream consequences (Barrera & Simpson, 2012). I did

not want my educational goals to produce undesirable consequences for any of the

participants in my study. The participants were small business owners who were active in

the management or operation of their business. It was important to have owners who

were also managers as the participants since they possess the background and knowledge

to provide insight into the business strategies needed to operate the small business.

Research Method and Design

I selected a qualitative research method and a multiple case study research design

for this research study. The selections were based on my knowledge of research methods

and designs. The selections were also based on the research question and my desire to

explore the business strategies that new small business owners need to sustain their

business beyond 5 years of operation.

Research Method

In academic research, there are three types of research methods: qualitative,

quantitative, and mixed methods. If the purpose of my research is to examine the

relationship between variables, I would select the quantitative method to measure the

variables and analyze the data using statistical procedures. If the purpose of my research

is to explore and understand the meaning individuals or groups ascribe to a phenomenon

of interest, I would select the qualitative method which focuses on quality rather than

quantity (Yilmaz, 2013). Qualitative research is the systematic collection, organization,

 58

analysis, and interpretation of people’s words from conversations, written texts, or visual

forms about a social phenomenon as experienced by individuals in their natural setting

(Grossoehme, 2014). My focus is on human experiences, and I plan to present my

findings in narrative form. The nature of this research study was exploratory which made

a qualitative research methodology the appropriate choice (Durkin et al., 2013).

For years, qualitative and quantitative methods were the traditional methods used

by researchers (Robson & McCartan, 2016). Mixed-methods are a combination of

qualitative and quantitative methods used to extend a researcher’s understanding of the

research problem. If I were to select mixed methods, I would use the qualitative method

to understand the problem by understanding people’s experiences with the issue. I would

make assumptions based on the qualitative findings and validate my assumptions through

quantitative research.

My selection of the type of study was based on two issues: the problem driving

the study and the data available to the researcher (Ellis & Levy, 2009). Researchers use

qualitative research when their aim is to develop an understanding of a phenomenon

through the participants’ lived experiences of the phenomenon (Kornbluh, 2015; Robson

& McCartan, 2016). The objective of this research study was to understand the

perception of business owners who start and operate a small business during its first 5

years. The data available to me were the business owners’ perceptions of starting and

operating a small business. I followed a predefined set of procedures to answer the core

question of the study. The strength in my use of qualitative research for this study was
 59

that it enabled me to record and collect complex textual descriptions from the participants

about their small business experiences.

The quantitative method is based on numerical data and statistical calculations. I

would not have been able to extract the in-depth participant perspectives that could lead

me to an answer about the strategies that new small business owners used to start,

operate, and sustain a small business for more than 5 years. My situation as a novice

researcher did not make the selection of mixed methods a logical choice. I may not have

the skills and training required to complete a mixed methods research study. One reason

would be the timing issue. A researcher can complete the quantitative component of a

mixed methods study more quickly than the qualitative component of a mix methods

study (Robson & McCartan, 2016).

Research Design

Research design is the plan that logically links the research questions with the

data collected and analyzed in a research study (Yin, 2014). I explored the four major

qualitative research designs: (a) phenomenology, (b) grounded theory, (c) ethnography,

and (d) case study (Petty et al., 2012) to determine the design that was the most suitable

for my research study. The focus of a phenomenological design is to gain an

understanding of how humans view themselves and the world around them (Robson &

McCartan, 2016). It is the best approach to use if a researcher wants to get a better

understanding of what an experience means to a particular group of people (Grossoehme,

2014). Researchers collect their data through lengthy interviews, usually 1 to 2 hours in

length (Leedy & Ormrod, 2016). The typical sample size is 5 to 25 individuals who have
 60

had direct experience with the phenomenon in the study (Leedy & Ormrod, 2016).

Ingham-Broomfield (2015) recommended phenomenological as the design to use if a

researcher was planning to examine the human lived experiences attributed to a

phenomenon. I did not select the phenomenological design because I was not planning to

examine the human lived experiences attributed to a phenomenon.

The focus of a grounded theory design is to generate a theory to explain what is

central in the data (Robson & McCartan, 2016). The researcher collects data while

simultaneously analyzing it. During the analysis process, the researcher may notice

nuances in the data and in response generates new questions about the nuances for further

research. The analysis and generation of new research questions is an iterative process

and the emerging theory guides the data collection (Grossoehme, 2014). The iterative

process continues until there is no new information for the researcher to learn

(Grossoehme, 2014). I did not select a grounded theory design because I was not seeking

to develop a theory based on the data from individuals who have lived the phenomenon

in the study (Petty et al., 2012).

The focus of an ethnographic research design is to gain a detailed description,

analysis, and interpretation of the culture-sharing group (Robson & McCartan, 2016).

This involves going into the field and staying there for a long period, usually two or more

years (Robson & McCartan, 2016). I did not select an ethnographic design because I was

not exploring the shared patterns of behavior, beliefs, and language within a cultural

group from the inside (Petty et al., 2012) with the goal of presenting or explaining it to

people who are not part of the culture (Grossoehme, 2014).

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Research design is the process of turning research questions into projects (Robson

& McCartan, 2016). There are two fundamental types of research questions: What is

going on? and Why is it going on? (Robson & McCartan, 2016). This research study

answered the what question through descriptive research. I used descriptive research to

describe the phenomenon and its characteristics (Nassaji, 2015).

A multiple case study design was the most appropriate design for this research

study. Yin (2014) stated that the selection of a research design is based on three

conditions: (a) the type of research question, (b) the amount of control the researcher has

over the behavioral event, and (c) whether the focus is on contemporary or historical

events. I selected the case study design for the following three reasons. First, my research

question dealt with how small business owners used business strategies to sustain their

businesses beyond the first 5 years of operation. Second, I did not need to have control

over the behavior event. I was able to collect data by interviewing persons involved in the

events. Third, I was examining contemporary events. My three reasons met the

conditions given by Yin for selecting a case study. Mariotto, Zanni, and DeMoraes

(2014) defined a case study as a detailed description of a business situation. A single case

study is vulnerable because of the need to provide strong arguments about why the

researcher selected the case (Yin, 2014). Multiple case studies increase the possibility of

direct replication which makes the conclusions resulting from independent cases more

powerful than those from a single case (Yin, 2014). I used the multiple case study design

to describe the in-depth experiences of five small food & beverage business owners. I
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explored the business strategies small food & beverage business owners need to sustain

their business beyond the first 5 years of operation.

Population and Sampling

The research population is the large collection of individuals that is the focus of a

scientific query (Robson & McCartan, 2016). The population for this research study was

small business owners. Population refers to all of the cases and a sample is a selection

from that population (Robson & McCartan, 2016). I was not able to interact with every

member of the research population because it would have been too expensive and time

consuming. I used a sample which is a subset of the research population. This allowed me

to conduct this study so that I was able to use the results to derive conclusions that could

apply to the entire population. I conducted this research with the expectation that my

findings would benefit the population of small business owners globally.

There are two types of sampling plans: probability samples and non-probability

samples. Probability samples are when the selection of each participant is not known.

These include simple random sampling, systematic sampling, stratified random sampling,

cluster sampling, and multi-stage sampling (Robson & McCartan, 2016). Non-probability

samples are when the selection of the participants is known. These include quota

sampling, dimensional sampling, convenience sampling, purposive sampling, and

snowball sampling (Robson & McCartan, 2016). I used purposive sampling, which meant

that I selected the participants for this research study with a purpose in mind. The purpose

was to identify and select participants that could provide information-rich cases of using

business strategies to successfully operate their small businesses. I made the selection of
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the participants based on my expectations that they can inform and lead me to an

understanding of the research problem for this study (Palinkas et al., 2015). Qualitative

methodologists cannot agree on the exact sample size needed for qualitative studies

(Marshall, Cardon, Poddar, & Fontenot, 2013). Boddy (2016) suggested looking at the

context of the research to determine the appropriate sample size for the study. Even one

case may be enough if the researcher takes a constructivist or in-depth qualitative

approach (Boddy, 2016). Guest, Bunce, and Johnson (2006) suggested that a sample size

of twelve would be enough if the researcher’s goal is to understand the experience and

common perceptions of a phenomenon among a group of homogeneous individuals.

Taylor, Bogdan, and DeVault (2016) suggested that qualitative researchers continue to

define their samples as their studies progress. The qualitative methodologists do agree

that it depends on the number required to achieve data saturation (Marshall et al., 2013).

Researchers using the case study method rely on interviews with individuals with

pre-defined characteristics (Patton, 2015). The characteristics would be those that have

been defined by the researchers as belonging to the individuals that could provide

information that would help answer the interview questions (Kristensen & Ravn, 2015).

The sample I decided on was five small food & beverage business owners in the San

Francisco Bay area. Using five business owners increased the possibility of direct

replication and made my conclusions more acceptable because they were the results from

multiple independent cases. Selection of a representative group for data collection was

important for valid and reliable results in a research study (Ford, 2016). With each

interview, I identified new themes and I investigated any new questions that arose from
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the data. At the point when I identified fewer themes and I had fewer new questions that I

needed to investigate, I knew that I was close to reaching data saturation. Data saturation

is the point in data collection when nothing new is coming up (Hagaman & Wutich,

2017; Richards, 2015). A researcher reaches data saturation when interviewing additional

participants will not yield additional insights towards answering the research question

(Taylor et al., 2016). I collected data until the topic of business strategies used by small

business owners to sustain their business beyond the first 5 years became clearer to me. I

expected to reach this point at the completion of the fifth interview. To ensure data

saturation, I contacted several additional participants to be potential interviewees. The

eligibility criteria for the selection of participants for the sample was small business

owners in the food & beverage industry who have operated their businesses continuously

for at least 5 years. Small business owners would have knowledge of the business

processes and strategies used in the operation of the business. In addition to knowledge

and experience of the phenomenon of interest, the participants needed to be available and

willing to participate and able to communicate their experiences and opinions in a clear

and reflective manner (Palinkas et al., 2015).

The interviews were face-to-face and one-on-one. This made the interview a form

of social interaction (Taylor et al., 2016). The interviewer should try to create an

atmosphere in which the interviewee would feel comfortable talking (Taylor et al., 2016).

I worked with each participant on the coordination of the interviews. This involved

agreeing on the time and place for the interviews. I conducted the interviews in the office

of the business or in a quiet public area near the participant’s place of business. The
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public places were quiet enough so that the background noise did not interfere with the

audio recordings. Even though they were public places, the seating design ensured that

there were no people sitting close enough that would hear the interviews. The locations

were situated close to the participants’ place of business so that time away from the

business would be minimal.

Ethical Research

People involved as participants in a research study may encounter harm, stress,

and anxiety (Robson & McCartan, 2016). Robson and McCartan (2016) recommended

that a researcher focus on ethical principles in his/her actions and way of doing things

throughout a research project. Ethical principles are general considerations that a

researcher must take into account when conducting research using people. The most

common ethical principles are concerned with minimizing harm, respecting autonomy,

preserving privacy, and acting equably (Hammersley, 2015). Greenwood (2016)

emphasized that ethical research considerations are an embedded element of the research

process. Therefore, I focused on conducting myself in an ethical manner in every phase

of my research project. Quinn et al. (2013) conducted a study to document the progress

made in building trust in human subject research since Congress passed the National

Research Act in 1974. The Act created the National Commission for the Protection of

Human Subjects of Biomedical and Behavioral Research. The Commission is best known

for its creation of The Belmont Report. The Belmont Report outlines the three ethical

principles to guide human research. I complied with the three Belmont Report principles

throughout my research study.

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The Institutional Review Board (IRB) at Walden University ensured that the

research I conducted complied with the university’s ethical standards as well as U.S.

federal regulations. I was concerned with only one statement in the recommended

consent form from IRB. That statement was the guarantee that being in the study would

not pose any risk to the participant. It was such a broad statement and I was not in control

of all circumstances that it caused me anxiety in my discussions with potential

participants. This reaction was similar to the reactions of researchers in the study

conducted by Peticca-Harris, deGama, and Elias (2016). Fletcher (2017) found himself

caught between the demands of an ethics approval process and the reality of a risk filled

research site. He found that all he could do was to allow the interviews to be an

opportunity where he listened to the words of the participants and watched the body

language for signs of discomfort. My interviews did not involve physical risk but I took

Fletcher’s advice and committed to listening to the words and watching the body

language for signs of discomfort. I received permission from IRB to conduct this study

with the approval number 06-02-17-0510140.

I obtained prior consent from the participants that I interacted with in the course

of collecting data. I distributed a consent form to each participant (Appendix B). A

researcher uses a consent form to explain what the study involves to the participants

(Robson & McCartan, 2016). I included the list of interview questions and informed the

participants that I would be using an audio recorder to record the interviews. I also

informed them that I would be reviewing company documents as part of the data

collection process. I provided details about how I planned to use the information they
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shared and the procedures I would take to protect that information from anyone outside of

the research team. I explained the nature of the research and its consequences. The

consent form (Appendix B) informed the participants that they must consciously agree to

participate and that they must do so freely. Participation in the study was voluntary and

there was no compensation. If they chose to withdraw from the study at any time, they

could do so without consequences. I would have handled any withdrawal from the study

by asking for written communication of the intent to withdraw from the study from the

participant.

To insure the confidentiality of the participants, I removed any information that

could identify the participants (Grossoehme, 2014). I identified each participant with a

unique identifying number. In addition to the participant number, I created a participant

identifier that consisted of a code created with specific and original identifiers for the

gender, age, type of business, years in business, and interview date. I labeled the micro-

SDHC card and stored it with the special participant identification codes. I placed the

micro-SDHC card of the interviews in a locked fireproof storage cabinet and will keep it

there for 5 years.

Data Collection Instruments

I was the data collection instrument for my research study. I collected data

through in-depth interviews and company documents in the form of balance sheets, profit

& loss statements, and cash flow statements. I prepared for the experience of data

collection through interviews by reviewing the research conducted by Peredaryenko and

Krauss (2013). Peredaryenko and Krauss explored the experience of novice qualitative
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researchers as they conducted their first interviews. Peredaryenko and Krauss found that

the novice researchers gravitated towards one of two states: researcher-centered or

informant-centered. The novice researchers that were researcher-centered assumed that

they knew the answer to the research question and was not open to discovering anything

new through the interviews. The novice researchers that were informant-centered viewed

each interviewee as an informant with a unique experience that could bring new insight to

the research. The informant-centered novices were more aware of their own biases and

focused on not contaminating the results with their own predispositions, assumptions, and

beliefs (Peredaryenko & Krauss, 2013).

As a human instrument in a scientific inquiry, my goal was to produce the most

accurate results possible. It was important for me to clearly and intelligently document

and understand my biases and how they could influence me when I collected and

analyzed data (Grossoehme, 2014). As a human instrument, I brought my own

predispositions, assumptions, and beliefs to the research setting (Peredaryenko & Krauss,

2013). Reflexivity is the awareness that a researcher has that his or her background,

values, and previous experiences with a phenomenon can impact the research process

(Berger, 2015; Cope, 2014). A challenge as a novice researcher is to not allow

predispositions, assumptions, and beliefs to interfere with understanding the phenomenon

the researcher is studying (Peredaryenko & Krauss, 2013). Dowse, van der Riet, and

Keatinge (2014) recommended using mindfulness and reflexivity to help a researcher be

present with awareness, acceptance, and attention. Buhrau and Sujan (2015)
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recommended self-regulation through the identification of desired goals and formulating

a clear implementation plan to attain them.

Interviews enable researchers to explore the experiences of the participants

through a series of questions and answers (Grossoehme, 2014). I asked each participant

12 open-ended questions during the one-on-one, face-to-face interview to explore the

business strategies that the new small business owner used to sustain his/her business

beyond the first 5 years of operation. The interviews were semistructured which meant

that I used an interview protocol with pre-determined questions and potential follow-up

questions. Semistructured interviews allow researchers to seek clarification when

participant answers are not clear (Doody, 2013). If a topic arises during the interview that

the pre-determined questions do not cover, but is relevant to the research, the

semistructured format of the interview will allow a researcher to deviate from the pre-

determined questions to pursue the new topic (Grossoehme, 2014). A researcher uses

semistructured interviews to gain the perspectives, expectations, and assumptions of the

participants while building rapport (Silverman, 2017; Vaughn & Turner, 2016). Good

open-ended questions are able to get the participants to respond with lengthy answers

(Leedy & Ormrod, 2016). Frankham et al. (2014) recommended that researchers spend

time trying to work out what a good question would look like. Gioia, Corley, and

Hamilton (2013) emphasized that semistructured interviews can solicit both retrospective

and real-time accounts from those that experienced the phenomemon. The quality of the

interview questions determines the quality of the data collected which in turn determine

the quality of the research study (see Grossoehme, 2014; Mayer, 2015).
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In addition to the responses from the interviews, I collected data about the small

business owners participating in the study through company documents. The documents I

reviewed were mainly financial statements but included business reports and press

releases when available. The business reports and press releases enabled me to determine

the type of business strategies that were in place during a specific period. I was able to

determine the effectiveness of the business strategies by looking at the financial

statements for the same period. Robson and McCartan (2016) cautioned researchers about

documents produced outside of the research context. Before mining company documents

for data, researchers must ascertain how and for what purpose the company created the

business reports and financial statements (O’Leary, 2014; Robson & McCartan, 2016).

Prior to the actual collection of data, I distributed a consent form (Appendix B) to

each participant. I provided details about how I planned to use the information they

shared with me and the procedures I would take to protect that information from anyone

outside of the research team. As part of the consent process, I gave details about the

interview. I notified each participant that the length of the interview would be 30 to 45

minutes, the amount of questions would be 12, the researcher and participant would agree

on the time of the interview, and the location would be at the place of business or the

most convenient place for the participant.

I used member checking to enhance the reliability and validity of the data I

collected through the interviews. Varpio, Ajjawi, Monrouxe, O’Brien, and Rees (2017)

described member checking as informant feedback, respondent validation, or

dependability checking. Researchers conduct member checking by either presenting data

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transcripts or data interpretations to all of the participants for comments (Varpio et al.,

2017). I transcribed verbatim the audio recordings of the interviews. I went over the

transcripts and omitted fillers and repetitions. Harvey (2015) found that transcripts that

did not have the fillers and repetitions helped to remove some of the negative impact of

the participants regarding the fluency and clarity of their speech. Each transcript listed the

interview questions and the participant’s answers to the questions. I sent the participants

an email explaining the process of member checking and attached the transcript of their

interview to review. Through member checking, participants (members) check their

answers and give feedback about its accuracy so that the transcripts would accurately

represent the participants’ perspectives or experiences (Birt, Scott, Cavers, Campbell, &

Walter, 2016; Grossoehme, 2014; Kornbluh, 2015; Thomas, 2017). Three of the five

participants responded by email and the remaining two participants replied verbally

during the follow-up phone call I made to them two weeks after I emailed their

transcripts to them. All five participants confirmed that my interpretations were an

accurate representation of what they had shared during the interviews.

Data Collection Technique

The most popular approaches to data collection for qualitative research include:

observation, participant observation, in-depth interviewing, and analyzing audio-visual

materials and documents (Marshall & Rossman, 2016). The data collection approach for

this research study were interviews and company documents. I interviewed five small

food & beverage business owners who have operated their businesses for more than 5

years. I carried on a conversation with a purpose during the interviews.

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An interview protocol is useful to maximize the time spent with the interviewee

by ensuring that the interaction is both effective and ethical (Doody & Doody, 2015). I

used the interview protocol (Appendix C) to guide the interview process. I had created a

formalized set of interview questions which I read aloud individually to each of the

participants. I used an audio recorder during the interview to record the questions and

responses. The recording device was small and compact so that it did not distract the

participants or make them feel uncomfortable. I use one audio recorder for the interviews

and carefully checked it out operationally and recharged the batteries before each

interview. I recorded each interview on the micro-SDHC memory card I used for the

interviews. I started the interview process with a few general topics under the assumption

that the participant’s perspective would unfold as the interview progressed. Castillo-

Montoya (2016) calls these initial questions the introductory questions. The introductory

questions included questions regarding background and education. I then moved to the

transition questions. These questions link the introductory questions to the key questions

of the interview (Castillo-Montoya, 2016). The key questions were those that asked about

operating the small business and specific business strategies. In order to conduct a good

interview, I must set aside what I think I know (Taylor et al., 2016) and ask the

participant to explain what they mean by their answers. Another method would be to

rephrase the participant’s answer and ask for confirmation (Taylor et al., 2016). I ended

the interviews with the closing questions. Closing questions provide an opportunity for

the participant to raise any issues not addressed (Castillo-Montoya, 2016). The interview

protocol kept me focused on the questions that would provide me with the data that I
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needed to answer the research question. An interview protocol is a procedural guide to

direct one through the interview process (Jacob & Furgerson, 2012). I collected a large

amount of information during the average interview session of 30 minutes. Morse (2015)

emphasized that researchers must understand and interpret the participants correctly. I

enhanced the reliability of the interview data through member checking. I presented each

of the participants with the transcript of his/her interview and solicited comments,

corrections, and any additional information they wanted to provide.

In addition to the recording of the interviews, I handwrote notes during the

interviews. Christie, Bemister, and Dobson (2015) conducted a study on the impact of

researcher note taking during an interview session. Their findings provided me with

additional understanding about how the participants would view me as I took notes

during the interviews. It is important to learn that note taking will not affect the

perception of the interviewee about competency and professionalism (Christie et al.,

2015). I took notes on the non-verbal reactions of the participants that I observed during

the interview. I also documented details about the setting and conditions for the

interviews in the notes. I kept track of the research notes by setting up files which I

identified with the same unique participant identification codes. I reviewed the interview

notes containing my participant observations after each interview and recorded them onto

electronic files. I protected the electronic files with security passwords.

In addition to the interviews with the small business owners, I collected data

about the small businesses through their company documents. Prior to the on-site review

of the company documents, I had distributed an information packet and consent form. It
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contained details about the documents that I wanted to review and how I planned to use

the information. I also provided details about how I would safeguard the documents

during the research and how I would handle the disposal of the documents once I had

extracted the data. The documents I reviewed included business reports and financial

statements. I also collected public accessible information about the small businesses. I

obtained information from newspaper articles and from websites such as Yelp and the

company websites.

Data Organization Technique

Data organization was important to my research study because it enabled me to

easily retrieve information whenever I needed it throughout the research process.

Effective data organization enabled me to retrieve the data for analysis and eventually for

presentation and reporting purposes. If the data was not well-organized, I may misplace

data that might have been important to the research study results. The research question

determines the data analyzed to describe the research phenomenon (Elo et al., 2014). The

purpose of data organization is to retrieve, from a mass of information, the information

that is relevant to the research question (Given & Olson, 2013). Even after the completion

of my research study, I may have to access the data and retrieve if for the reconstruction

of the research project, responding to an audit, or to use it in further research. It is

important to adhere to the research requirements of retaining the data in a locked

container for 5 years.

I made entries into a research journal, both before and after each interview. I used

the reflective journal to record my mood when starting the interview and my mood after
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the interview. It provided a medium to collect the ideas and insights I gained while

conducting the interviews. The act of writing in the reflective journal expanded my

thoughts onto paper. Lamb (2013) discovered that reflective journals provide evidence

from which researchers can draw conclusions about the research. Researchers use

reflective journals to address and even guard against bias in research (Peredaryenko &

Krauss, 2013). Reflective writing gives an awareness of the thought processes, for the

researcher to monitor and control, so that they do not impact the results of the research

study (Henter & Indreica, 2014).

I will keep data transcripts, interview notes, research journals, tables, graphs, and

worksheets in hard copy format for 5 years in a locked fireproof storage cabinet. I also

locked the audio micro-SDHC card and USB flash drives of the raw data used in the data

analysis in the fireproof storage cabinet. I am the only person who has access to the

storage cabinet.

Data Analysis

Data analysis is the search for patterns in the data, interpreting those patterns, and

deciding what the patterns mean (Bernard & Ryan, 2016). The researcher plays a central

role in analyzing and interpreting the data (Xu & Storr, 2012). It is the researcher’s

responsibility to process the data in a meaningful and useful manner (Robson &

McCartan, 2016). A data analysis strategy is the process of bringing order and structure

to a mass of collected data (Marshall & Rossman, 2016). The data analysis strategy I

used was the thematic coding approach.

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Through content analysis, I identified, coded, categorized, and labeled the data.

There are three main phases or stages involved in qualitative content analysis:

preparation, organization, and the reporting of results (Elo et al., 2014). The preparation

stage involves data collection (Elo et al., 2014). I organized the raw data into narrative

descriptions with major themes. Inexperienced qualitative researchers have a difficult

time recognizing patterns or themes in their data (Taylor et al., 2016). I examined the data

in as many ways as possible so that I would not miss any themes or patterns. The

organization or abstraction stage is when the researcher develops the themes or categories

(Elo et al., 2014). Henning (2011) created a tool for researchers to use to capture

information about the different categories or themes under research. As a researcher

enters information onto the grid, it will start to reveal new categories and themes when

information is repeated again and again in the source material (Henning, 2011). I

expected the factors of business strategy, business characteristics, and owner-manager

characteristics to be the major themes. The main themes that emerged were: (a) human

capital, (b) goals, and (c) growth through innovation.

A code in qualitative data analysis is a word or short phrase that captures the

essence of the data (Saldana, 2016). The purpose of a code is to bring together the data

about a major theme (Taylor et al., 2016). Taylor et al. (2016) suggested that researchers

code both the positive and negative incidents for a theme. Leedy and Ormrod (2016)

suggested that a researcher begin with a start list of categories or themes derived from the

research question. I developed a preliminary set of codes based on my experience as a

small business owner since 1976. The codes on the list were not mutually exclusive and I
 77

encountered multiple coding for some of the data. The number of codes on the list grew

as new categories or themes popped out from the data.

I coded and labeled all or parts of the data. Saldana (2016) emphasized that it was

not the quantity of the data that was important but the quality of the data. I made the

decision to code the data if it was salient to the research question. The codes enabled me

to arrange the data in a systematic order. I grouped together the codes with the same label

to form a theme. By dividing, grouping, reorganizing, and linking the data, the researcher

generates meaning and develops explanations from the data (Saldana, 2016).

Triangulation is a qualitative strategy researchers use to test the validity of data by

using multiple methods or data sources (Carter, Bryant-Lukosius, DiCenso, Blythe, &

Neville, 2014). There are four types of triangulation: (a) data triangulation, (b)

investigator triangulation, (c) theory triangulation, and (d) methodological triangulation

(Morse, 2015; Patton, 2015). Researchers use a variety of data sources for data

triangulation (Patton, 2015). This did not apply to my research study because I did not

collect data using more than one method of data collection. Investigator triangulation

uses several different researchers (Patton, 2015). This did not apply to my research study

because I was the only researcher for this study. Theory triangulation involves using

multiple perspectives to interpret the data (Patton, 2015). This did not apply to my

research study because I interpreted the data solely from the perspective of the

entrepreneurship theory. Methodological triangulation includes multiple methods of data

collection to study an event in order to gain a comprehensive view of the phenomenon

(Cope, 2014; Patton, 2015). This method of triangulation applied to my research study
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because my data collection strategy was to collect data about business strategies through

interviews with small business owners and to corroborate and augment the data collected

from the interviews by using company documents. The data collected through interviews

provided information about the business strategies used while the company documents

showed the financial condition of the companies when the small business owners used

certain strategies. Yin (2014) cautioned researchers about the use of company documents

describing them as not always accurate and not always free from bias. The use of two

different data sources may result in one of three outcomes: (a) convergent, (b)

complementary, or (c) divergent or contradictory (Heale & Forbes, 2013). Convergent is

when both methods lead to the same conclusions to increase validity through verification.

Complementary is when the differing results supplement the individual results thereby

highlighting different aspects of the phenomenon. Divergent or contradictory results from

the two methods can lead to new insights into the phenomenon under investigation

(Heale & Forbes, 2013). Patton (2015) mentioned that different sources of data may yield

essentially the same results but with slight differences due to the sensitivity different

methods have to real world nuances. Patton encouraged researchers to learn the

inconsistencies in findings from different sources of data. Therefore, I provided details

about the data sources I used in the study. I compared the results from each method and

described how I integrated the data to arrive at the study results.

Qualitative researchers use computer software to help them organize and interpret

their data (Leedy & Ormrod, 2016). I purchased a subscription to NVivo 11 Pro and used

the software to facilitate my data analysis. I transcribed the recorded interviews into
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Word and then imported them into NVivo. I used NVivo to sift through and sort the data

based on my interview questions. I also used NVivo to sift through and sort the data

based on themes and sub-themes. The software created models and graphs to visualize

the connections in the data. The data analysis process is time consuming (Evers, 2016). I

sped up the data analysis process by learning to use the capabilities within the NVivo

software.

Reliability and Validity

Reliability

The concept of reliability, in a qualitative research study, is that if other

researchers choose to follow the same research procedures, they would achieve results

similar to what was received by the initial researcher (Mariotto et al., 2014). I gathered

my data by strictly adhering to my interview protocol. I used the interview protocol to

guide the interview process. I had a list of basic questions like those about background

and education. I then moved to the more difficult questions about operating the small

business and specific business strategies. The interview protocol kept me focused on the

questions that provided me with the data that I could use in the research study. An

interview protocol is a procedural guide to direct the researcher through the interview

process (Jacob & Furgerson, 2012).

Data is trustworthy if it has established dependability. Dependability shows that

the results are consistent and replicable (Amankwaa, 2016). A research study is

dependable if another researcher can replicate the results using similar participants in

similar conditions (Koch, 2006). I showed that the data was consistent through member
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checking. I gave the participants (members) the opportunity to check the transcripts and

give feedback about their accuracy. All five participants confirmed that the information,

on the transcripts, were an accurate representation of what they had shared during the

interviews. Member checking ensures that the transcripts accurately represent the

participants’ perspectives or experiences (Grossoehme, 2014; Thomas, 2017).

Validity

Validity is how accurately the data represents the participant’s view of a

phenomenon (Marshall & Rossman, 2016). It is important to document how one

developed the results (Elo et al., 2014). Readers should be able to follow the researcher’s

analysis process to the results (Elo et al., 2014). I was the data collection instrument for

this research study. I used an audio recorder to capture the participant’s answers. I kept a

written journal entry for each participant. I used data triangulation to validate that I

recorded the information accurately. In data triangulation, the same data from different

sources is collected with the hope that the information will converge to validate the data

(Leedy & Ormrod, 2016).

Credibility. Credibility in the research world means that the researcher conducted

the research in a manner that would ensure the proper identification and description of the

subject and that the research is a valued contribution to the knowledge on the subject

(Marshall & Rossman, 2016; O’Leary, 2014). Cope (2014) recommended including audit

trails to support credibility when reporting a qualitative study. An audit trail could be

notes or materials the researcher used to arrive at assumptions or decisions (Cope, 2014).

Sorenson (2016) recommended that researchers conduct their research study with
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competence, goodwill, and trustworthiness. I attained credibility for my research because

I followed Sorenson’s advice. I demonstrated my competence by discussing my doctoral

coursework and other relevant education since I do not have previous research experience

(see Marshall & Rossman, 2016). A researcher can demonstrate discipline and rigor by

documenting the research process in detail (O’Leary, 2014). To demonstrate goodwill, a

researcher should discuss the effort made and the time spent to get a sense of the subject

(Kelley, 2016). To demonstrate trustworthiness, I ensured that the findings are from the

perspective of the participants through two methods: transcription verification and

member checking. I personally transcribed the audio recordings of the interviews. I

transcribed the interviews verbatim. I documented each question and answer given by the

participants. I gave the transcripts to the participants for member checking. I invited the

participants (members) to check my transcriptions and give me feedback. Inviting

participants to give feedback on the data interpretation enhances the trustworthiness of

results (Birt et al., 2016).

I used the best method available to triangulate the data. Triangulation is the use of

more than one data source to authenticate the data collected (O’Leary, 2014). Using more

than one data source enhances the credibility of the data when the data from the different

sources are consistent (Houghton, Casey, Shaw, & Murphy, 2013). Triangulation enables

a researcher to get a better fix on the object of the research study (Robson & McCartan,

2016).

Transferability. Transferability is when the findings of a research study is useful

to others in similar situations (Marshall & Rossman, 2016). Researchers do not have a
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clear understanding about the specific factors that determine whether the findings of a

research study are transferable (Burchett, Mayhew, Lavis, & Dobrow, 2013). Burchett et

al. (2013) identified six dimensions of applicability/transferability from their research:

congruence, ease of implementation, adaptation, setting, effectiveness and study design

and methods. I documented the details of my research with these dimensions in mind. By

providing a rationale for my research and providing details on the case studies, I hope to

provide enough information about my research so that others can make judgements about

my findings and whether those findings can provide some answers to their research

questions (Houghton et al., 2013). I strictly adhered to the interview and data collection

protocols I designed for this study. I also followed the guidelines for data saturation.

Confirmability. Confirmability means that another researcher or study can

confirm or support the results of my research study (Marshall & Rossman, 2016). Cope

(2014) recommended that a researcher describe how he/she formed the conclusions and

provide examples of how themes emerged from the data. I documented my logical

inferences and interpretations in detail so that my analysis would make sense to another

person. I carefully documented the research decisions I made during the research process.

As I made my decisions, I recorded it immediately in a research journal. I tried to provide

enough details about the decisions that I made and why so that another researcher would

be able to understand what and why I made the decisions just by reading my research

journal (Grossoehme, 2014). I also had the documents that had been member checked by

the participants.
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Data Saturation. Data saturation is when the researcher sees the same patterns

repetitively and senses that there is nothing new to gain from further data collection

(Marshall & Rossman, 2016). Fusch and Ness (2015) listed the general principles that

researchers agreed on regarding data saturation. Data saturation is when the researcher

senses that there is no new data, no new themes, no new coding, and that the research

study is replicable (Guest et al., 2006). There is no specific number of interviews that will

provide enough data for a research study to reach data saturation (Fusch & Ness, 2015;

Hennink, Kaiser, & Marconi, 2017; Malterud, Siersma, & Guassora, 2016). My plan was

to initiate my research study with five participants. Malterud et al. (2016) recommended

that researchers continuously evaluate their sample size during the research process. I

reached data saturation with the fourth interview, but I decided to ensure data saturation

by interviewing the fifth participant. Since there are no specific sample size

recommendation for qualitative research studies, the method most often used is

experiential or rule of thumb (Hennink et al., 2017; Palinkas et al., 2015). Experienced

researchers calculate the approximate numbers of participants needed for their research

studies based on the analysis of previous comparable studies (Malterud et al., 2016). It is

important for researchers to describe their sampling strategies in detail and to provide the

rationale for the selection of the strategies (Palinkas et al., 2015).

Transition and Summary

Section 2 contained the details of the project, its purpose, the role of the

researcher, the participants, the research method and design, the population and sampling,

and a discussion about ethical research. I provided details about data collection: the
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instrument, technique, data organization, and data analysis. I also discussed reliability

and validity.

Section 3 contains the findings of this research study. The presentation of the

findings includes a discussion of the themes and how they link to the conceptual

framework. I discuss the findings and its application to professional practice and its

implications for social change. There are recommendations for action and further study,

reflections of the researcher, and the researcher’s conclusion.

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Section 3: Application to Professional Practice and Implications for Change

Introduction

The purpose of this qualitative study was to explore business strategies new small

business owners used to sustain their business beyond the first 5 years of operation. Half

of new businesses started by small business entrepreneurs will not survive their first 5

years of operation (SBA, 2016). The business strategy is the means by which the

company will align itself with its environment to create and maintain a competitive

advantage (Palmer et al., 2001). Small business owners need to allocate their limited

resources to the activities that enhance their business strategies (Blackburn et al., 2013;

Lan et al., 2014). A challenge for small business owners is to identify the business

strategies that enable them to maximize their energies and resources for their businesses

to survive the first 5 years of operation.

In this section, I present the findings of my multiple case study involving five

small food and beverage business owners in the San Francisco Bay area. I obtained data

from the small business owners, in the form of semistructured interviews and company

documents. I used the qualitative strategy of methodological triangulation on the data.

Researchers use methodological triangulation to test the validity of data (Carter et al.,

2014). Methodological triangulation uses multiple methods of data collection to study an

event in order to gain a comprehensive view of the phenomenon (Cope, 2014; Patton,

2015). I compared the interview data with the company documentation to ensure data

validity. I entered the data into the qualitative analysis software NVivo 11 Pro which

revealed three main themes in the data. The three themes were: (a) human capital, (b)
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business goals, and (c) growth through innovation. I included quotes in the findings from

the actual interview transcripts where appropriate. Through this research study, I was able

to determine the strategies that the small business owners used to start, operate, and

sustain their businesses past the first 5 years of operation.

Presentation of the Findings

I interviewed five small business owners in the food and beverage industry. The

study participants had a minimum of 5 years of experience operating their businesses.

During the interviews, the participants responded to 12 interview questions. The open-

ended structure of the questions allowed the participants to share diverse information and

experiences. Participant interviews and company documents enabled me to complete a

methodological triangulation of the data for this research study. I reviewed company

documents which included financial statements, press releases, news articles,

testimonials, and documentations of industry recognition. The data I collected answered

the research question: What business strategies do new small business owners use to

sustain their business beyond 5 years of operation?

The participants in the research study came from five different segments of the

food and beverage industry. There was one participant each from the following market

segments: (a) craft beer manufacturing and distribution, (b) winery operations, (c) mobile

expresso bar, (d) catering to individuals with special diet requirements, and (e) special

events catering. To ensure confidentiality and the privacy of the study participants, I

replaced their names with the pseudonyms: P1, P2, P3, P4, and P5. P1 is the owner of a

craft beer manufacturing and distribution business. P2 is the owner of a winery that
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bottles wines blended from the grapes that are grown on the property. P3 is the owner of

a mobile expresso bar business specializing in company events. P4 owns a catering

business and hires herself out as a private chef to individuals with special dietary

requirements. P5 owns a catering company that provides full wedding planning and

coordination services for the activities after the actual wedding ceremony.

I collected data from one-on-one semistructured interviews with the participants.

The list of questions I prepared for the interviews directed the conversations toward the

research topic of business strategies. Research interview questions should start with

words like what, who, where, when or how to encourage descriptive answers (Kallio,

Pietila, Johnson, & Kangasniemi, 2016). I took notes on the non-verbal reactions of the

participants that I observed during the interview. I collected additional data from the

following financial statements: (a) balance sheets, (b) profit & loss statements, and (c)

cash flow statements. I coded the data from the company documents with the notation

CD along with the participant number. I identified the data from the company documents

for Participant 1 with CD1a, CD1b, and CD1c. I reached data saturation when I

interviewed the fourth small business owner. Data saturation is when the responses begin

to repeat and when no new information or coding themes occur (Fusch & Ness, 2015). I

conducted the fifth interview to ensure data saturation.

The process I completed for data analysis included: transcription, cyclical review

for themes and sub-themes, coding, and synthesis. I personally transcribed the five audio

recordings of the interviews. During the transcription process, which required numerous

sessions with each of the audio recordings, I documented themes and sub-themes. I
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entered the interview and company document data into NVivo 11 Pro, a qualitative data

analysis tool. The frequency results can be seen in Appendix D. Three main themes

emerged: (a) human capital, (b) business goals, and (c) growth through innovation. I

compared the themes and sub-themes against the conceptual framework and other peer-

reviewed studies from the literature review which included new studies since receiving

approval for this study.

Emergent Theme 1: Human Capital

Dimov (2017) defined human capital as the knowledge and skills that an

individual brings to a task they set out to perform. For the small business owners in this

study, that task was starting and sustaining a business. All five participants used their

educational knowledge, business background, and managerial experience to formulate

business strategies that enabled their small businesses to survive for at least 5 years.

Mayer-Haug, Read, Brinkmann, Dew, and Grichnik (2013) listed business experience,

business skills, and education as some of the variables that formed entrepreneurial talent.

The researchers found that entrepreneurial talent was associated with growth and sales,

but to a lesser extent with profit. The data aligned with Lara and Salas-Vallina’s (2017)

and Mayer-Haug et al.’s findings that educational background, business knowledge, and

managerial skills are valued assets of a firm and are needed in a high competitive market.

Martin, McNally, and Kay (2013) found that small business owners who have a high

level of skills, knowledge, and other competencies will achieve greater performance

outcomes for their businesses. Backman, Gabe, and Mellander (2016) discovered that

educational attainment increases a firm’s chance of survival.

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Educational Knowledge. I asked interview question 4 to determine the formal

education level of the participants. Koellinger (2008) found that innovative

entrepreneurship was more likely to occur if the small business owner had academic

education. Sonfield and Lussier (2014) found that the owner/manager’s formal education

level had an impact on the choice of entrepreneurial strategies for the business. All but

one of the five participants received some type of formal business strategy training or

education prior to starting their businesses. P1 had an MBA. P2 received marketing

training on her way to getting a realtor’s license. P3 attended a state college and took

marketing courses through a major university extension. P4 went through a year-long

entrepreneurship training program. Small business owners, with formal education and

training, use that knowledge to help them overcome the barriers they encounter when

starting a business and the problems they encounter while operating those businesses.

The data aligned with Dimov’s (2017) findings that both education and work experience

increased the chances of small business survival. The data also aligned with Baptista et

al.’s (2014) findings that pre-startup capabilities and human capital of the founders

played an important role in the early years of a startup.

Business Background. Another possible determinant of a company’s survival is

the ability of the small business owners to come up with solutions to the latest change in

the business environment. P1 mentioned, “Since we both worked in corporate life, we

had some business exposure, but none of us had beer experience. So, we had to learn all

that from scratch.” P2 shared:

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I have a partner. He worked for a winery for 20 years so he knew how to make the

wine. I have been in real estate for 38 years and have had to market myself for 38

years. So, we both bring something to the table and they are very different things.

P3 stated, “I was working full time and I did this on weekends. I was doing sales

& marketing and some retail sales.” P5 had years of hands-on-experience which he says

enables him to find solutions to problems because he has knowledge of past solutions to

similar situations. The data aligned with the findings of Pucci et al. (2017) who found

that small business owners with learning capabilities were better able to detect and cope

with market challenges. The researchers found that small business owners who are able to

cope with ongoing market challenges are able to show steady and stable financial

performances (Pucci et al., 2017).

Small business owners are able to learn from failed businesses from their past. P4

had an ice cream parlor/sandwich shop that quickly closed its doors when P4 ran out of

operating funds. P5 had two restaurants that received good reviews from food critics but

failed in less than 2 years because of the lack of managerial experience. Both small

business owners shared that they “learned what not to do this time around” (P4, P5). The

data aligned with Sarasvathy, Menon, and Kuechle’s (2013) findings that serial

entrepreneurship can provide a viable strategy for the entrepreneur to improve his or her

own expectations of success.

Managerial skills. All five participants made the strategic decisions for their

businesses. P1 would meet and discuss the situations with his partner and try to reach an

agreement on how to resolve the situation. P1 stated, “We agreed that if we discover a
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problem we were going to solve the problem. Get if off the plate. We don’t want the

number of issues on our plate to get bigger and bigger.” P2 shared, “I am the risk taker.

There were times when we kind of shot from our hips.” P3 shared, “I do a lot of risk

taking. But the whole thing about the risk taking was that it was very, very small risk and

very, very manageable. So, you would get the feedback. If it works – good.” P4 offered

the same sentiments by sharing, “After years in business, I learned not to be afraid to do

things. I think I’m a very fearless kind of person. I started doing different things and the

business just got better and better.” P5 understood, however, that for his business to

grow, he needed to do things differently. P5 shared, “As an owner, I have to be willing to

give up some areas in order to enable expansion and show trust in the people who are

helping to build the company.” The data aligned with the findings of Garcia-Perez et al.

(2014) who found that in SMEs, owners/managers made the strategic decisions based on

their perceptions of the situation in relation to the risk involved. The data was also in line

with Kolvereid and Isaksen’s (2017) findings that entrepreneurs had almost complete

control over firm achievements. Nascent small business owners needed the control

because starting a business from scratch was probably more challenging than taking over

an existing business (Kolvereid & Isaksen, 2017). Small business owners met that

challenge if they were knowledgeable about efficient financial strategies which could

improve firm performance (Bilal, Naveed, & Anwar, 2017). Jogaratnam (2017) studied

the restaurant industry and found that human capital, market orientation, and

entrepreneurial orientation were intangible resources small business owners used to

produce sustainable competitive advantage. The participants in this study used their
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resources, both tangible and intangible, to start, sustain, and grow their businesses for

over 5 years.

Emergent Theme 2: Business Goals

All five participants were passionate and fully committed to making their new

business a success. P1 stated, “The goal was to have a top shelf, best of class, gold medal

winning product. It had to be great.” P2 explained, “My partner is really good and

consistent at making the wine. We just make a really good product.” P3 shared, “You

really have to like people. You have to have a ‘stick-to-it-ness’. You really have to be

patient because it takes time.” P4 stated:

The strategy was just how to get my name out there and how to get the clients. I

decided to just have them taste my food. And it worked. I would go to different

events and I would give tastes of my food away in little paper cups. I also started

to do street fairs all over. I did every single street fair in San Francisco and I did

every single one in Berkeley and Oakland.

P5 shared, “You have to have heart and the belief that nobody can change your

direction as long as you feel 100% that what you are doing will be successful or where

you want it to be.” All five participants set specific goals for their businesses in the areas

of market segment, products, and services. They formulated specific strategies for

starting and sustaining the businesses for the short term. This data aligned with Bonte and

Piegeler (2013) and Yukongdi and Lopa’s (2017) findings that what drives

entrepreneurial intention among potential small business owners is similar between

women and men.

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Starting the business. P1 spent a lot of time planning and visualizing the

business prior to actually starting the business. P1 shared:

We talked about a lot of things before we ever opened the business. My partner

and I came to agreements on a number of issues before we ever spent a dollar or

opened the business. I wanted to make sure that we were in alignment of what we

wanted the goals of the company to be. We never talked about the product. We

wanted to get into a new industry or new segment of an industry rather than

getting into a crowded field.

P2 spent 5 years visualizing and determining the characteristics of the typical

customer they wanted to serve and built a large database of possible customers even

before bottling their first bottle of wine. P2 shared:

What we did was we started to collect people’s names of those who were

interested. People in the wine industry who had expressed an interest in our wine.

We had to age the wine for 18 months before we could bottle it. There is a long

process to making wine.

P3 spent 2 years working his business, on a part time basis, to determine whether

the business concept would work. P3 shared:

If you are in a position to design a business just for you, you can design the

competition out of it. You can do something unique so that you can eliminate the

major competition right from the start so that you do not have to worry about it

later.
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P4 spent 1 full year researching and composing the business plan for her new

business. The business plan was part of the worker’s compensation benefits she received

when she was hurt on the job. P4 had spent years in the food service business working for

large caterers or as the food service manager for large companies. P4’s plan was to use

her extensive experience in the food service business to own a small catering business. P5

spent 5 years working in restaurants to learn about the food industry and specifically the

catering segment. P5 shared that prior to starting the present business, he had started and

failed at operating several small restaurants. P5 shared:

By the time I was 21, I had opened up a French Bistro which got 3 stars in the

Chronicle. By the time I was 22, I had opened up another restaurant. The idea

when I came out of restaurants was that I wanted simply to bring the restaurant

experience to catering.

Sustaining the business. All of the participants in this research study had plans

for their new businesses. Some of the participants created business plans while others

kept their plans for their businesses in their heads. Per P2, “Making more wine each year

is our strategy.” As P3 puts it, “I never put a ton of energy into the strategy but it was

always in the back of my mind. It is constantly evolving depending on my inspiration, my

ideas, the resources that I have.” P5 stated, “The strategy is to keep doing what we are

doing which is at a high level in both service and product. I need to always bring in new

ideas, new recipes, and to work smarter not harder.” P1 and P4 were the only participants

with formal business plans. P1 had a MBA and a background in business management.

P1 was especially comfortable with the financial planning tasks for the new business. P1
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was the small business owner with the highest level of financial success (CD1; CD2). P4

had formal entrepreneurship training with a focus on developing business plans. P4

generated an excellent business plan and received key resources to start and operate her

new business. P4 had the small business with the largest profit margin (CD4a). The data

aligned with Karel et al.’s (2013) findings that the companies that prepared detailed

strategic documents had better results than those without written business plans. The data

was also in line with Eddleston et al.’s (2013) research findings that strategic

management had a positive impact on growth in first-generation businesses. Three of the

five participants in this study never developed a business plan, but they continue to grow

and do well after 5 years of operation (CD1a; CD1b; CD3a; CD3c; CD4a; CD5a).

All five participants did not want to get into a business dominated by international

conglomerates. P1 decided to choose the craft beer business. P2 chose the wine making

business. P3 chose the coffee catering business. P4 chose to be a private chef to the

elderly. P5 was the youngest participant and was the only small business owner that was

eager to take on the competition (P5). All of the participants relied on their individual

creative and innovative skills to deal with their competition and to sustain and grow their

businesses. As P1 stated:

The fundamental difference, I think for us and not a lot of other businesses, was

we always asked ourselves why would the distributer, or wholesaler, or retailer, or

consumer care about us? How do we get their attention with no money?

P2 stated, “We just did what we thought was going to work and we did what we

enjoyed.” P3 stated, “Being a micro-small business is the best way to become profitable.
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If it grows on its own, then it is organic growth.” The data aligned with Ates, Garengo,

Cocca, and Bitici’s (2013) findings that SMEs seem to be more focused on short term

planning than long term planning.

Muhonen, Hirvonen, and Laukkanen (2017) found that small business owners can

make their brand into a unique and effective source of competitive advantage if they

developed their brand identity. All five participants had a vision of the identity they

wanted for their businesses. P1 wanted to produce a gold medal winning product.

According to P1, “We would treat the product with reverence but everything else with

irreverence.” P1 wanted humor and fun to be the words used most often by customers to

describe the company and its products. P2, P3, P4, and P5 each wanted to be known as a

company that produced products that were consistently good. P2 did this through the

careful blending of the company’s wines. P2 mentioned, “One of the things going for us

is that our wines are so consistently good that we have a lot of the same people buy our

wines every year.” P3 did this through his selection and careful roasting of the coffee

beans so that they produced the best coffee drinks. P3 also selected the type of clientele

he wanted to serve. P3 stated, “If you are in a position to design a business just for you,

you can design the competition out of it. You can do something unique so that you can

eliminate the major competition right from the start.” P4 and P5 used the freshest

ingredients in the foods that they made by contracting directly with growers and

distributors. P4 mentioned, “People would return to eat my food. I made money. I got

write ups in the newspapers.” In my interview notes, I had recorded that she was

particularly proud of the great review she had received from Janet Fletcher, an award-
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winning food writer for the San Francisco Chronicle. During his interview, P5 stated,

“The strategy is to keep doing what we are doing which is at a high level in both service

and product.” I was able to confirm the level of product and service P5 was providing his

customers by checking the Yelp website. P5 received 5 stars out of 5 from 58 of the 62

customers that took time to post their reviews. All five of the participants were proud of

the reputation that they had built for themselves through their products and services. This

data aligned with Przepiorka’s (2016) findings that entrepreneurs put in more effort and

derived more satisfaction from attaining their goals than non-entrepreneurs. McDowell et

al. (2016) found that new small business owners were often skilled in product/service

knowledge and tended to focus on customer relationships to grow their customer base.

All of the participants mentioned that their reputation was a reliable source of new

customers. Every participant was confident that their brand identity gave them a

competitive advantage over their competition (P1, P2, P3, P4, & P5). This data aligned

with the findings of Muhonen et al., which stated that brand performance drives financial

performance in SMEs.

All but one of the participants set goals that were incremental. P1, P2, P3, and P4

saw controlled growth as their key to reaching the eventual goal of a highly successful

business. P5 had set the aggressive goal of building a business that would be successful

enough for him to retire for life after only 5 years. P1, P2, and P3 all started their

business small so that they could control and learn about the business without risking a

lot of money. P1 invested $20,000 for the initial batch of craft beer. The main focus of

the original investment was to get the word out about the beer. P1, P4, and P5 thought
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that it was important to introduce the product by giving out free samples. P1 wanted to

increase sales by 100% each year. P1 also wanted to grow the business into a national

company and be among the top 3 in the nation in its market segment. P1 surpassed that

goal by becoming the second largest major domestic specialty brewer in the United

States. P2 focused on building a customer base while she and her partner waited for the

grape vines they planted to grow to the point where they could use the harvest to produce

the first batch of wine for the business. The first release was in 2007 and the winery has

had successful releases each year since then. P2 wanted to grow the business to the level

where she could eventually sell it to provide a comfortable retirement. To reach that goal,

P2 added a sales and marketing manager in 2014 to help promote and sell her wines. The

new member of the management team was able to build the company’s customer base,

revamp the website, and plan upcoming events for the winery. P3 started the business by

focusing on providing expresso coffee bars at weddings. Since then, P3 has switched his

marketing focus from weddings to corporate events. P3 explained that weddings

generated sales for 1½ days a week while corporate events generated sales for 5 days of

the week. P3 wanted to grow the business to the level where he could sell the business for

2 million dollars. To grow the business, P3 made large investments in equipment and

vehicles in the last three years. During the same period, he increased his expenses when

he went from having 3 employees to 10 employees. P4 is retirement age but still wanted

to grow the business so that it would provide a steady flow of income without having to

worry about employees or paying for a kitchen to cook out of. As a private chef to

individuals with special dietary needs, she could provide her services in her customers’
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kitchens and make a nice profit for her services. For the last 5 years, P4 has focused on

building her private chef business while leaving the day-to-day operations of the special

events catering portion of the business to her long-time employees. P5 has focused on

catering special events especially weddings. P5 used technology to attract potential

customers and to get the word out about the products and services offered by his

company. Since the majority of his clients are younger and working professionals, he

invested in an exciting website with testimonials from clients to help the business grow.

P5 was so successful that the amount of business he can generate out of his present

location has nearly reached maximum capacity. To meet the demands of a rapidly

growing business, P5 had to make large investments in equipment and vehicles in the last

three years (CD5a; CD5b). P5 is now looking for a larger commercial kitchen with plenty

of parking for his catering trucks and vans.

All five participants had a financial goal that they wanted to reach when they

started their businesses. It was either to sell the company when the right offer came along

or to retire when they reached a certain age. Karadag (2015) emphasized the necessity of

small business owners having a strategic perspective for the financial management of the

business. P1 shared:

We weren’t sure whether we would ever get an offer to be acquired or not, but we

decided that we were not going to past this company on to the next generation. If

we get an offer, and it is a reasonable offer, we would consider it.

P2 wanted to be able to retire at age 65 from active participation in the business

but still have a flow of income from the business so that she would be able to relax
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without worrying about finances. P3 wanted to sell his business for 2 million dollars by

the time he reached age 63. P3 felt that if he had 2 million dollars in the bank, it would

give him a lot of options for the rest of his life. P4 is retirement age but wanted to be

independent and self-sufficient while still doing what she loved, which was to cook. P5

wanted to be able to retire at an early age. P5 had to revise his original goal of retiring at

age 30 because he found that it was a lot harder to make a profit when you are trying to

grow your business. P5 learned the hard lesson that it was important to control expenses

while still taking risks.

All five participants started their businesses to ensure that when they retire, they

could live the lifestyle they desired without worrying about finances. One important

element in that lifestyle was to spend more quality time with their families. Each

participant felt that this would materialize only if they could control their own retirement

destinies. The data aligned with Almeida and Teixeira’s (2017) findings that

entrepreneurs ranked work as the most important thing in life, before friends, leisure

time, politics and religion, but not family.

Only two of the five participants talked about the desire to pass on that passion

and commitment to their employees. P1 stated:

Hire the best people as quickly as possible to do things that they’re good at. The

sooner you bring other people on, the better. So, my friend and I agreed that we

would not let our egos get in the way. We’ll hire the right people and we would

give them stock. Everyone is a shareholder.

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P5 shared that he had spent years working with several of his employees prior to starting

his present business. P5 stated:

I understand that the only way to achieve more is by me letting a little bit of it go.

Expanding the company in the areas where certain managing staff can take over

and really have their own independent working relationship within the business.

This data is in line with Richtner and Lofsten’s (2014) findings that having as

many people as possible involved in management activities will help make the company

more resilient to changes in the marketplace. The data is also in line with Omer,

Mostashari, and Lindemann’s (2014), Parnell’s (2015), and Winnard, Adcroft, Lee, and

Skipp’s (2014) recommendations for strategy formulation and execution to cope with

crisis and recover from disruptive events. The trust that P1 and P5 placed in their

employees enabled the small businesses to grow more rapidly than the other participants

in the study (CD1a; CD3a; CD4a; CD5a). This data aligned with Fainshmidt and

Frazier’s (2017) findings that trust enhances an organization’s ability to change

effectively and efficiently and facilitates the organization’s competitive advantage.

Emergent Theme 3: Growth through Innovation

All of the participants relied on creativity and innovativeness to grow their

businesses (P1, P2, P3, P4, & P5). P1 shared:

We wanted to be a national company. We made being in the top 3 in craft beers a

key objective. The strategy, in execution, would be having salespeople working

with the distributors to get to that growth level. We ended up having 10 years in a

roll of over 100% growth per year.

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P2 chose to give each of her wines memorable and attention getting names.

Examples include: The Instigator and Black Tie Charlie. P3 chose a highly descriptive

and catchy name for the services he provided. P4 and P5 gave away food samples to draw

attention to the quality and creativity of their food. P4 gave food away at street fairs

while P5 gave out free lunches at the businesses that contacted him. All 5 participants

spent time thinking up creative and innovative ways to market their products. P1 did it

through unique and attention getting press releases. P2 created wine tasting events and

built a tasting room to feature her wines. P3 focused on customizing his marketing to

attract the attention of young professionals. P4 focused her marketing on her ability to

create delicious food while still keeping her clients within their strict diet requirements.

P5 focused on designing and providing the complete wedding experience.

Zulu-Chisanga et al. (2016) found that new product success strengthened the firm

innovativeness / financial performance relationship. The researchers found that firms that

developed and successfully commercialized new products and services recorded higher

sales and profits than firms that did not develop new products or services. Zulu-Chisanga

et al. discussed that innovativeness was a critical determinant of a firm’s health and

growth. Furthermore, Block et al. (2017) found that entrepreneurs with more prior

business experience identified and exploited more innovative opportunities. Han and Li

(2015) shared that intellectual capital positively impacted innovative performance.

All of the participants emphasized the importance of coming up with new

products. P1 would come up with new craft beers, give each one an attention getting

name, and then introduce it through press releases and public events to let consumers
 103

sample the new beers. P2 would come up with new wine blends, give each one an

attention getting name, and introduce it through their wine tasting room. In addition, P2

would send an e-blast to everyone on their client list about the new wines. P2 would

feature the new wines in upcoming wine tasting events. P3 would think of new pairings

of food to go with his coffee bars. The latest pairing was coffee and waffles for morning

meetings instead of the usual coffee and donuts. P4 built a successful business catering

special events but decided to develop delicious new recipes for those who attended the

events but had special diet requirements. P4 shared, “Most catering companies offer the

option of a salad for those that could not eat the items that were on the regular menu at

special events. I wanted those attendees to also enjoy my food.” Her new recipes were

such a success that she offered the additional service of being a private chef for those

clients with special dietary requirements. P5 continued to develop new recipes for his

menu. P5 hired professional photographers to take pictures of the new items and updated

his website to feature the new menu items. Every small business owner, in this study,

designed new products based on his/her competencies or the competencies of employees.

This data is in line with Armstrong’s (2013) findings that small businesses are better off

if they maintain an inward focus for opportunities instead of an outward focus. Martini,

Neirotti, and Appio (2017) emphasized that small business owners would not be able to

implement either their internal or external innovative strategies if they did not already

have a system in place to exploit employee creativity.

Prajogo and Oke (2016) examined the effect of service innovation on business

performance. The researchers conducted a random survey of service firms and found that
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service innovation provided a competitive advantage for service firms in the 228 usable

responses. Prajogo and Oke also found that a dynamic environment enhanced the effect

of service innovation on business performance. P4 experienced this effect in her business.

P4 earned high profit margins with the new service since it was customary for private

chefs to use the kitchens of their clients to prepare the meals. P4 generated additional

revenues for the business without the costly overheads normally associated with

expanding the clientele for a food service establishment (CD4a). P5 also decided to

provide an additional service to his customers. P5 would provide the coordination of the

wedding event that followed the wedding ceremony. P5’s marketing group would

coordinate everything from the flowers, food, wedding cake, and beverages free of

charge to the bride and groom. The catering company would receive a finder’s fee from

the vendors for their trouble. The innovative idea of providing free wedding

reception/banquet coordination services provided additional revenues for the catering

company without additional cost (CD5b). This data is in line with Ryu and Lee’s (2016)

findings that highly qualified employees, customer interaction, and technology are

important in improving the financial performance of small businesses.

All five participants focused on internal innovation projects. Block et al. (2017)

found that the development of internal innovation projects provided more benefits than

collaborating with strategic alliances on external projects. P1 focused on hiring the right

people in the right place to market his products. P1 shared:

 105

We decided by hiring our own salesperson to work in the city with the distributor,

we would get more mindshare. All of the other breweries would just ship their beer

to the distributor and let them either sell it or not sell it.

P2 invested in a tasting room to market her wines. P2 also relies heavily on the use

of technology to stay in contact with her clientele. P3 confessed that “Strategy was

always in the back of my mind. It is constantly evolving depending on my inspiration, my

ideas, the people resources that I have, how much the resources cost, and whether

resources become available to me. P4 shared, “I learned not to be afraid to do things. I

started doing different things and the business just got better and better.” P5 shared,

“What I felt the catering industry was lacking was the restaurant style experience and

presentation. I wanted to provide the restaurant experience, with the food, without the

high price.” The data aligned with Prajogo and Oke’s (2016) findings that the level of

creativity, knowledge, and idea development skills of the small business owner was an

asset for achieving competitive advantage through innovation. The data is also similar to

Bigliardi’s (2013) findings that an increase in the innovation level of a company resulted

in an increase in the company’s financial performance (CD1b; CD3b; CD4a).

P2 and P4 are women entrepreneurs and the risk takers among the participants. P2

had admitted, “I am the risk taker. I did what I thought was going to work.” P4 admitted,

“I learned not to be afraid to do things. I think I am a very fearless kind of person. I

started doing different things and the business just got better and better.” The data is in

line with Mitchelmore and Rowley’s (2013) findings that when women perceive that they

have entrepreneurial competencies, they believe that entrepreneurial opportunities exist

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and they seek them out. Despite seeking out opportunities to grow, the women small

business owners in the study still wanted the business to remain small and manageable.

P2 stated, “We don’t make a lot of grapes or a lot of wine. We just make a really good

product.” P4 shared, “I want continuity in my food. I make sure that the food is always

fresh. I made a name for myself which I am really happy with.” The data aligned with

Reichborn-Kjennerud and Svare’s (2014) findings that women entrepreneurs are satisfied

with staying small. The desire to stay small may be the key to survival for the two women

owned small businesses. Handrich, Handrich, and Heidenreich (2015) created a model to

measure innovativeness in companies and they also studied the innovation/business

success relationship. The researchers found that small companies are better able to

translate innovativeness into business success and big size does not matter when it comes

to innovation activities (Handrich et al., 2015). The reason is that small businesses are

more flexible in adopting their resources, mainly the human competencies, into

innovative products or services (Martins & Fernandes, 2015).

Summary of Themes

Reviewing the human capital available to start and sustain the business was a

good place to start for all of the participants. The participants in this study spent time

evaluating the skills available among the owners themselves before starting the

businesses. Four of the participants gained their basic business knowledge through

formalized education (P1, P2, P3, & P4) and all five gained the experience to start their

businesses while working on-the-job for others.

 107

All of the participants started small. They set reasonable prelaunch goals and

started and operated their businesses on a small scale until they were comfortable about

how to operate their business efficiently and how to maximize available resources. They

also spent time discussing, evaluating, and planning the risks they were willing to take to

grow. Starting small meant that they could learn what to do and what not to do without

losing a lot of money. Participant 1 through 4 started their businesses with the realization

that the business may not make money right away. P1, P2, and P3 started their business

and operated it part time while remaining in the employment of others.

One skill common to P1 through P4 was a formalized educational background.

All four had marketing courses that taught them how to market their products. P4 used

her worker’s compensation benefits to attend an entrepreneurship training program. This

data aligned with Varamaki, Joensuu, and Viljamaa’s (2016) findings that students

involved in startup activities had a greater belief that they would succeed in an

entrepreneurial career, were more innovative, and were more creative in problem solving

than the other students. P1, P2, and P3 had a background in marketing in the corporate

world. They learned about the things to do and not to do while working for others.

Despite being in business for at least 5 years, all 5 participants felt that for them to grow

their businesses, they would like to get expert advice. They wanted to be able to ask

questions to someone who had gone through the process they were going through and

could tell them about what to expect in the future. P2 wanted to hire a wine marketing

expert while P3 wanted to consult an expert in branding his product and services. P4

wanted advice on using advertising to get new customers. This data was in line with
 108

Lobacz and Glodek’s (2015) findings that small innovative companies seek business

consultant advice in relation to strategic decisions which in turn determines the direction

the company owners will go in the future.

Entrepreneurship Theory

The results from this study align to the conceptual framework of the

entrepreneurship theory. The two main insights of Schumpeter’s entrepreneurship theory

were: (a) innovation is the key to business growth, and (b) creative destruction is a vital

source of innovation (Waller & Sag, 2015). In the 1940s, Schumpeter described his

entrepreneur as an agent of change (Schumpeter, 2012). At the core of Schumpeter’s

entrepreneurship theory was the process of innovation (Bogliacino & Pianta, 2013).

Schumpeter’s entrepreneur upset the conventional way of doing things by engaging in

innovative actions to achieve economic growth for his/her business (Dorin & Alexandru,

2014; Nunes, 2016; Schumpeter, 2012). Block et al. (2017) summarized the results of

21,270 firms in 42 empirical primary studies and found that innovation had a positive

influence on the performance of SMEs. Hyytinen, Pajarinen, and Rouvinen (2015) found

that innovativeness encouraged survival-enhancing attitudes and capabilities in startups.

Upsetting the conventional way of doing things is an accurate description of the

five participants in this study. P1 did not follow the conventional formula, used in Silicon

Valley, of raising $2 million before starting his business. P2 started building her customer

database 5 years before she had a product to sell. P3 started a mobile coffee bar service

when it was popular to brew coffee at home or go to a coffee shop to buy a cup of coffee.

His service brought a unique experience to special events by allowing the attendees to
 109

choose from a large assortment of coffees drinks. P4 developed food items for those with

special dietary requirements and made it part of her catering menu. P5 offered the

planning and coordination of everything after the wedding ceremony to provide his

clientele with the complete wedding experience without paying for a wedding planner.

All small business owners in this research study did not settle for doing what

everyone else was doing. They found innovative ways to get things done and to grow

their businesses. Through their creative and innovative ideas, they increased revenues for

their businesses. This data is in line with Hulbert, Gilmore, and Carson’s (2013) findings

that small business owner/managers used their experiential knowledge to actively search

and find innovative opportunities for their businesses. Griffiths et al. (2012) had

described the modern entrepreneur as replicative meaning that he/she was involved in

conventional activities and contribute little to industrial revolutions and economic

growth. The entrepreneurial small business owners in this study focused their activities

on starting and growing their businesses. They used the innovative entrepreneurial

process to plan and organize their activities into business strategies that enabled them to

keep their business viable. Galanakis and Giourka (2017) emphasized that the

entrepreneurial process is not one homogeneous path from nascent to active entrepreneur.

The researchers found that it is a complex network of personal and contextual factors that

the entrepreneur must manage or handle for the business to continue (Galanakis &

Giourka, 2017). A viable business is one that will be around longer than those that are

not. The small business owners in this study have been in business from 5 to 25 years and

all of them have shown increasing sales each year (CD1b; CD3b; CD4a; CD5b). P1 was
 110

able to increase sales 100% each year for 3 consecutive years (CD1b, CD1c). The

participants used theirs creative and innovative mindset as the key element in their

business strategies to date. The data collected in the interviews and company related

documentation support the findings that the introduction of innovative new products or

services provided additional sources of revenue for the businesses.

Application to Professional Practice

The results of this study may prove valuable to current and future small business

owners in the food & beverage industry. The small business owners may improve their

business performance by applying the knowledge from this study. The study findings

include three distinctive themes: (a) human capital, (b) business goals, and (c) growing

through innovation. Block et al. (2017) found that innovation had a positive effect on

both business performance and firm survival. The information can help small business

owners survive for more than 5 years by helping them understand what needs to happen

even before the actual start of a business. Diligent preparations prior to opening the

business may improve the probability of continuity for the new small business.

Implications for Social Change

The results of this study may help improve the chances of survival for new small

businesses in the food & beverage industry in the San Francisco Bay area by providing

knowledge about the strategies required for small business survival. Applying the

knowledge gained from this study may enable small business owners to direct their

limited business resources to those areas critical to the survival of the business.

Maximizing the value created through the efficient use of resources may increase the
 111

chances of survival for those businesses. Businesses that are still in operation after 5

years continue to contribute to the stability and health of the economy (Lussier &

Corman, 2015). The findings from this study might contribute to positive social change

by reducing the burden on taxpayers by bringing in new jobs, reducing unemployment,

and increasing sales tax revenues.

Recommendations for Action

All small business owners and potential future small business owners should pay

attention to the results and findings from this study. They can benefit from knowing and

adopting the business strategies that new small business owners in the San Francisco Bay

area used to operate and sustain their business for over 5 years. Based on the literature

review and analysis of the data collected in this qualitative case study, I recommend

action from the San Francisco District Office of the SBA. I will provide the SBA office

with the results and findings from this study. They should make copies of the findings

available to small business owners and potential small business owners who are

considering starting a business in the San Francisco Bay area.

The small business owners and potential small business owners must learn how to

maximize the human capital of the business. They must learn that as a small business

owner, they need to evaluate the skills required to sustain and grow their business. Once

they have determined the required skills to help the business survive and grow, they must

either upgrade their skills or hire people that already have them.

The small business owners and potential small business owners must learn to set

the right goals for the business. The decision maker for the business must decide what
 112

type of business he/she wants the business to become and plan and set aggressive but

reasonable goals to get the business to where he/she wants it to be. The participants in

this research study proved that it was better to set and achieve incremental goals instead

of trying to set one aggressive goal that may be impossible to reach within the limitations

of the business.

The small business owner and potential small business owners must always plan

for growth in the business. The participants in the study found that the best way to grow

the business was to provide a product or service that no one else was providing. This was

a constant item on the To Do list for all study participants. They did not wait for sales to

drop before introducing new products or services. They all agreed that even though

studying the competition and the competitive environment involved a great deal of time,

they felt that the time spent was well worth it.

An additional strategy I would recommend to small business owners and potential

small business owners is to seek out and enter a business incubation program.

Government agencies created these programs to help new small businesses survive and

grow. Ayatse, Kwahar, and Iyortsuun (2017) found that business incubation is an

important tool for small businesses. Small business owners/managers should use the

programs to significantly increase the chance of survival for their business, grow the

amount of revenue, create jobs, and get much needed support.

In addition to providing the findings to the San Francisco District Office of the

SBA, I will provide the participants of this study with an overview of the results and

findings. I plan to co-author a journal article for an academic journal from the results of
 113

this study. I used only one third of the journal articles that I collected to answer the

research question. I plan to co-author a second journal article using the additional

information.

Recommendations for Further Research

All of the participants in this research study were from the food & beverage

industry in the San Francisco Bay area. The participants were from a wide range of

market segments. I recommend a research study on small businesses in one market

segment of the food & beverage industry that may provide findings that would be

beneficial for the small business owners in that particular market segment. This study was

limited to the San Francisco Bay area. I recommend a research study based in a different

geographical location since the San Francisco Metropolitan area has the highest

consumer price index among U.S. City Metropolitan areas (Bureau of Labor Statistics,

2017).

Reflections

I conducted this research study as a novice researcher who had a lot to learn every

step of the way. I needed, but did not have, a working knowledge of the tools required to

produce a quality research study. I was not sure I had what it took to be the human

instrument for this research study because I would have an impact on the quality of data

collected and the results reported (see Goodell, Stage, & Cooke, 2016). I worked hard to

produce findings that accurately reflected the population of small business owners. I

found it difficult to find enough small business owners who were willing to take the time
 114

to participate in this study. Additional participants and feedback would have provided

more data in support of my findings.

Conclusion

All of the participants in this research study are nascent entrepreneurs. They each

decided to create a new venture when they started their small business. For a small

business to survive, there is a lot of work that the small business owner needs to do

before opening the doors of the business. There must be agreement on: the nature of the

products or services, how to market and finance those products and services, and there

must be an understanding about what success will look like. Getting off to a good start on

the business enabled the participants in this study to operate their small startups for at

least 5 years. The preparations prior to starting the businesses improved the probability of

success for the participants.

The research question for this study was: What business strategies do new small

business owners use to sustain their business beyond 5 years of operation? The

participants in this study relied on their entrepreneurial orientation to turn their

background and business knowledge into new small businesses. As small business

owners, the participants used their commitment and resolve to sustain their small

businesses by concentrating on the day to day operations of delivering quality products

and services. With a constant focus on the future and growth, they searched for

innovative opportunities while preparing themselves to take advantage of those

opportunities. The small business owners would take on the challenge of moving forward

with an innovative opportunity only after careful evaluation of the risks versus the gains.
 115

All of the participants in this study followed a similar entrepreneurial process and were

highly successful in creating value through their innovative activities.

 116

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Appendix A: Invitation to Participate in the Study

<Date>

<Address Block>

Dear <Invitee Name>,

This is Betty Lum. I am presently a student in Walden University’s Doctoral Business

Administration (DBA) program. To fulfill the requirements of the program, I need to
conduct a doctoral research study. My research topic is business strategies for small
business survival. I am inviting small business owners in the food and beverage industry
who have operated their businesses continuously for at least 5 years to be in the study.
The contribution of the study is to reduce small business failure rates which will help
small businesses continue to operate thereby benefiting their communities with
employment opportunities and increased tax revenues.

As a successful small business owner in the San Francisco Bay area, I would like to
invite you to participate in this research study. Please read the attached consent form
carefully and ask any questions that you may have before accepting the invitation. The
interview will include twelve open-ended questions that you can provide your opinions
and suggestions.

I appreciate your valuable time and thank you in advance for your cooperation.

Sincerely,

Betty Lum
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Appendix B: Consent Form

You are invited to take part in a research study about business strategies for small
business survival. The researcher is inviting small business owners in the food and
beverage industry who have operated their businesses continuously for at least 5 years to
be in the study. This form is part of a process called “informed consent” to allow you to
understand this study before deciding whether to take part.

This study is being conducted by a researcher named Betty Lum, who is a doctoral
candidate at Walden University.

Background Information:
The purpose of this study is to explore the business strategies small business owners use
to sustain their business for 5 years or more in the San Francisco Bay area. You are a
successful small business owner, so your opinions and experiences are of great value in
my research.

Procedures:
If you agree to be in this study, you will be asked to:
• Participate in an audio recorded interview that will take approximately 30 minutes to 1
hour.
• Review the preliminary summary of the interview for accuracy that will take
approximately 30 minutes.

Here are some sample questions:

• How did you measure/assess the success of your strategies?
• What strategies do you have in place to sustain your business?
• What strategies do you have to grow your business?

Voluntary Nature of the Study:

This study is voluntary. You are free to accept or turn down the invitation. If you decide
to be in the study now, you can still change your mind later. You may stop at any time.
Due to time and resource constraints, the researcher will not be able to interview every
person that volunteers. Interviews will be conducted until the proposed number of
participants for the study is reached. The researcher will follow up with all volunteers to
let them know whether or not they would be participating in the study.

Risks and Benefits of Being in the Study:

Being in this study would not pose risk to your safety or wellbeing.

If during the interview, a criminal activity or child/elder abuse activity is revealed, the
researcher will immediately halt the data collection because of personal obligations and
report the activity to the proper authorities.
 158

Small businesses, from the time they start-up to when they become viable businesses,
create jobs and increase tax revenues for the communities in which they are located.
Determining the business strategies that reduce small business failure rates will help
small businesses continue to operate thereby benefiting their communities with
employment opportunities and increased tax revenues.

The findings from the research will be available to the participants at the conclusion of
the research study.

Payment:
You will not receive any compensation for your participation in this research study.

Privacy:
Reports coming out of this study will not share the identities of individual participants.
Details that might identify participants, such as the location of the study, also will not be
shared. The researcher will not use your personal information for any purpose outside of
this research project. Data will be kept secure by storing it in a locked fireproof storage
cabinet with only one key. The single key will be kept by the researcher. All data files
will have password protection. Codes will be used in place of names. Data will be kept
for a period of at least 5 years, as required by the university.

Contacts and Questions:

You may ask any questions you have now. Or if you have questions later, you may
contact the researcher via email at [email protected]. If you want to talk privately
about your rights as a participant, you can call the Research Participant Advocate at my
university at 612-312-1210. Walden University’s approval number for this study is 06-
02-17-0510140 and it expires on
June 1, 2018.

The researcher will give you a copy of this form to keep.

Obtaining Your Consent

If you feel you understand the study well enough to make a decision about it, please
indicate your consent by signing below.
Printed Name of Participant

Date of consent

Participant’s Signature

Researcher’s Signature
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Appendix C: Interview Protocol

The research question is: What business strategies do new small business owners

use to sustain their business beyond 5 years of operation? The interview will consist of 12

open-ended questions to gain insights from small business owners, in the food and

beverage industry, about their experiences in using business strategies to sustain their

business for 5 years or more in the San Francisco Bay area.

Selecting Participants Researcher will contact participants by

email or phone about selection as

participant.

Setting Time and Place for Interview Researcher will contact participants by

email or phone to set time and place.

Explain the Research Study Researcher will recap the purpose of the

study, answer any questions, and provide

the consent form to be signed.

Conduct the Interview Researcher will record the interview with

an audio recorder.

Transcribe the Interview Researcher will transcribe the interview

(verbatim).

Member Checking Researcher will create a summary of each

interview and provide it to the participant

to confirm the accuracy.

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Appendix D: NVivo 11: Frequencies of Themes and Sub-Themes

Themes or Sub-Themes Percentage Coverage

Business Strategy 59

Business Plan 59

Goals 30

Challenges 28

Beginning the Business 23

Growing the Business 22

Creative or Innovative 21

Finance 20

Market Segment 14

Experience 11

Barriers 9

Skills 8

Product or Services 8

Measure or Assess 7

Success 5

Sustaining the Business 4

Education 4

Resources 3

Branding 2