To grow or not? Growing small service firms

Abstract

PurposeThe purpose of this paper is to investigate whether entrepreneurs realised their growth aspirations for their service sector businesses after five years. Growth in sales turnover and employee numbers is explored, as well as entrepreneurs' perspectives of how they achieved growth (or why they did not). There have been few examples of longitudinal research which compares entrepreneurs' growth aspirations with actual growth, and fewer still that focus on service businesses.Design/methodology/approachTwenty‐six entrepreneurs are interviewed in New Zealand in 2001 and re‐interviewed in 2006. Face‐to‐face interviews are used in the first instance, and the follow‐up interview is conducted by telephone.FindingsTwenty‐one entrepreneurs aspired growth in terms of either sales or employees (most aspired growth in both). The majority achieved growth in sales through having a good reputation, attention to customer service, diversification and employing good staff. Fewer entrepreneurs achieved their aspired growth in employee numbers, due to difficulties in employing and managing staff, skill shortages and a tight labour market. Findings support prior research that show if an entrepreneur chooses to grow his or her business it is likely that growth will actually occur.Research limitations/implicationsThis qualitative sample of 26 entrepreneurs is relatively small, but allows for an in‐depth look at the growth process. Implications for policy makers are presented.Originality/valueThe findings of this paper contribute to the growth aspirations' literature, and narrow the focus to service sector firms particularly. The qualitative approach also provides a new lens through which to understand more about the growth process from the entrepreneurs' perspective.