Perception of success and its effect on small firm performance

Purpose – The purpose of this paper is to provide an insight into small firm entrepreneurs' perceptions of success and how these perceptions affect the performance of a firm. The emphasis is on non‐financial measures of success and their interaction with the financial indicators of a firm's performance. Design/methodology/approach – The paper presents a comparative analysis of two separate studies conducted in the same geographical area in Finland. The studies were concerned with micro‐businesses in the industries of craft and rural tourism. Findings – The study finds that non‐financial meters of success that are affected by the entrepreneur's motivations and goals influence the financial performance of the small firm. Making a living is important, but going beyond that is not often seen of great concern. Consequently, the entrepreneurs are likely to measure their performance by other criteria and find success, e.g. in job satisfaction and satisfied customers. Research limitations/implications – In the data collection process, the used questions and themes were not identical. The main themes of performance, growth and success are, however, comparable. Practical implications – The paper provides useful information about small firm entrepreneurs' perceptions and attitudes of success and growth and how these affect the management of the firm. Originality/value – This paper brings empirical evidence to the studies of factors affecting small firm performance. In addition, it offers useful insight into the non‐financial measures of success.