Small Enterprises Characteristics, Growth and Performance: A Profile of Small Handicraft Entreprenuers in Sabah

Abstract

In many countries, two common criteria have been widely used in a firm’s classification as small or larger enterprises, namely the number of employees and annual sales turnover. Studies in enterprise development considered all types of firms to pass through three stages of development, from start-up stage to early growth, and the later growth stage. Many studies on the profile of the small business sector argue for a need to treat the small business sector as heterogeneous. It is believed that due to differences level in capital and resources, not all entrepreneurs follow the theorized pattern of growth from initial start-up to exponential growth to mature enterprise. In Sabah, most handicraft producers modestly make handicrafts, on a part-time basis or at home, and only very small numbers operate their production full-time in dedicated workshops. Based on literature reviews, this study postulated that the handicraft sector might not follow the logic of the development and growth as portrayed in the general entrepreneurship literature. Therefore, face-to-face structured interviews were conducted with 210 small handicraft entrepreneurs in Kota Belud, Sabah, in which the sampling list was randomly selected from the Malaysian Handicraft Producer Census. Within this, sales, profit, operation status (part-time/full-time) and premise type were used as sampling criteria. Through cluster analysis, three groups of handicraft entrepreneurs were identified: (i) high-performance full-timers, (ii) part-time professionals and (iii) part-time home workers. By identifying the different profiles of handicraft producers in Sabah, this research may help the Malaysian government to develop effective support policies for different types of handicraft producers, including how to encourage more individuals to become high performing full-timers.