INITIAL CAPITAL AND SMALL BUSINESS START-UPS AT ILE-IFE: EMPIRICAL EVIDENCE

Admin/ November 3, 2018/ Journal of Business and Social science/ 0 comments

INITIAL CAPITAL AND SMALL BUSINESS START-UPS AT ILE-IFE: EMPIRICAL EVIDENCE

Edem Okon Akpan: Department of Accountancy, Federal Polytechnic Bauchi
Esuh Ossai-Igwe Lucky: Department of Administration & Management, College of Business and Social Sciences, Crawford University, Igbesa, Ogun State, Nigeria.

Abstract
Start-ups are one of the stages in the new venture life cycle which consists of initial work in an attempt to start up any business or engage entrepreneurial firms. They are new businesses generally in their developmental stage, searching for markets and more importantly seeking for initial or take-off capital. These businesses have promising possibility and capability to grow into bigger ones, and this makes very attractive to the potential investors. One important resource required by start-ups is capital which plays a very crucial role at all stages of the business most importantly at the starting stage. Although there are many available options for start-up capital such as business angels, venture capitalist, banks, personal savings, friends, relative, partnership, seed money and so many others, however, they seem very difficult to access. While many believe that initial capital does not matter so much to start-ups, others see it as very crucial. On the other hand, academic research has produced inconsistent findings on how initial capital determines small business start-ups among small business owners. Thus, providing a fertile ground for the present study to take off. Therefore, the objective of this study is to examine whether initial financial capital hinders small business start-ups among the small business owners. The researchers generated a questionnaire data from 56 respondents drawn from Obafemi Awolowo University and Ipetimodu areas of Osun Sate through convenient/purposive sampling technique. Data generated were analysed using correlation analysis technique to determine the strength and direction of the relationship between Initial capital and small business start-ups. The overall finding revealed that initial capital does not determine small business start-ups among small business owners. On the contrary, the study equally found that financial resources determine business start-ups among small business owners in Ile-Ife. The study offers some implications for both small business owners and academic researchers.

Keywords: Capital-Resources, Financial-resources, financial-capital, Business, Start-Ups

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