The impact of necessity entrepreneurship on the survival of hair salons in Mangaung metropolitan area

Abstract

Despite the South African government’s effort to reduce unemployment, joblessness continues to increase. Some jobless people establish their own businesses in the face of adversity. Out of necessity and desperation, jobless people venture into establishing their own businesses despite the fact that they might not have the relevant resources. Often they lack funds. They venture into own business to accumulate money for survival purposes. One such business that has proliferated out of necessity are small hair salons. Many see this as quick and easy to initiate and run. However, no empirical evidence has been confirmed yet to substantiate the rationale for establishing hair salons and the impact thereof on the survival of the business.

The objective of the study was, therefore, to establish whether hair salon owners start their businesses out of necessity or opportunity in the Mangaung Metropolitan area.

Drawing from a positivist approach, this study adopted a quantitative research design with a sample size of 144 salon owners. A structured questionnaire with standardised questions was used to collect data. The findings show a statistically significant relationship between necessity entrepreneurship and business creation, business stakeholders and business creation business stakeholders and business survival and a minimal relationship between necessity entrepreneurship and business survival. The study concludes that necessity entrepreneurship is moderately related to business survival. The main recommendation is that necessity entrepreneurs need relevant information on small service business to achieve success. It is also recommended that government establish programs to support SMMEs by supporting innovation in small businesses and tax transparency.