Analysis of the factors affecting probable failure of local entrepreneurs

Abstract

PurposeThis study aims to investigate and analyze the factors affecting the probable failure of rural entrepreneurs so that the most important factors responsible for failure in the business of small and local entrepreneurs are identified.Design/methodology/approachThe present survey was conducted through the descriptive-analytical method by using a researcher-made questionnaire. The statistical population of the study included 1,641 greenhouse owner entrepreneurs in five rural communities. To clarify the key criteria affecting probable failure of greenhouse businesses, LISREL 8.8 computer software was used and the effects of selected indices on the process of probable failure of entrepreneurs were assessed using stepwise regression in the SPSS computer application environment.FindingsAccording to the results, individual and managerial skills factors, deterrent financial and legal issues, social barriers and infrastructural issues investigated in this study were of the first to the fourth priorities in clarifying factors affecting probable failure of greenhouse businesses. Considering the intragroup relations in these factors, it could be said that individual and managerial skills factors and infrastructural issues had the highest correlation coefficient which could be attributed to individual and management weaknesses of entrepreneurs in understanding infrastructural issues as the most important parameters to be considered in starting businesses.Originality/valueSo far, few studies analyzed the failure of rural entrepreneurs and evaluated the probable factors affecting it. Thus, the present study is among the earliest instances in the field and its results could be of great benefit to domestic entrepreneurs and similar cases in other countries.