The determinants of business success for small commercial farming enterprises

Abstract

The aim of this research was to determine the drivers of business success for small commercial farming enterprises. The study also sought to identify the financial and nonfinancial measurements used by small commercial farmers to measure the success of businesses. The study followed the qualitative research design which followed an inductive approach. Primary data were collected from 13 research participants through a semistructured interview guide. The responses from participants were recorded, transcribed, and analysed in Atlas ti. 9 using an interpretative phenomenological analysis (IPA) analytical approach. The findings from the study revealed some important insights that add to the existing knowledge of business success factors for small commercial farming enterprises. The study showed that the success of small commercial farming enterprises is determined by farmer characteristics, strategic planning activities, and farm resources and features. With regard to farmer characteristics, the study suggests that perseverance of effort, passion for farming, broad farm management skills, and technical knowledge and skills are the main factors influencing the performance of small commercial farming enterprises. As for the farm resources and features, the study has revealed that farm infrastructure, farming equipment, and natural features play a key role in promoting successful farming enterprises. The notable difference between the findings of this research and those reported in other studies on business success factors for SMEs is that this study has revealed some features that are unique to farming but, contribute to overall business success such as topography, rainfall, arable land, permanent source of water, drainage, and sufficient grazing capacity. In the case of strategic planning activities, the results revealed some key strategic planning activities that drive the success of small commercial farming enterprises such as financial planning, marketing planning, and production planning. The study has also demonstrated that small commercial farmers use financial and non-financial measurements to measure the success of their businesses. To tie all the findings together, a conceptual model for analysing the performance of small commercial farming enterprises has been developed. The study recommends that small commercial farmers should receive financial literacy training in order to increase understanding of the basic financial principles which promote farm productivity, profitability and overall business success. In addition, it is recommended that support rendered to small commercial farming enterprises by public and private institutions must focus on variables that improve the performance of their businesses such as the ones found in this study. Future research should focus on testing the validity, relevance and applicability of the conceptual model developed in different farming enterprises.