The Use of Business Bootstrapping as a Tool for Improving the Performance of SMMEs in Incubators in South Africa

Abstract

This study examined the use of business bootstrapping to improve the performance of SMMEs in incubation on the backdrop of intense competitive pressure in the South African business environment that hampers the competitiveness of businesses, particularly during their initial years of operation. This fierce competitive force also poses a significant threat to the survival of businesses in South Africa during their early stages. Literature reveals a high failure rate among most businesses during their first years of operation, which can be attributed to poor accessibility to capital and a deficiency in business skills. A mixed-method approach incorporating qualitative and quantitative methods was adopted for this study. Qualitative data were analysed using content analysis, while questionnaire responses were analysed using SPSS. The method facilitated a comprehensive understanding of the relationship between a deficit in business skills and the competitiveness of businesses in their early years, leading to the development of the Business Bootstrapping tool. Empirical studies and findings were integrated to bridge the identified research gap and construct the Business Bootstrapping tool designed to ensure the survival of businesses during their initial years of operation. The Business Bootstrapping Model serves as a determinant in overcoming financial and liquidity constraints faced by businesses in South Africa during their early stages.