Entrepreneur as "End"repreneur: The Intention to Retire

Abstract

As a topic more suited to practice than theory, the exit of small business owners and entrepreneurs from their companies has not found traction in academic literature. Also referred to as 'entrepreneurial exit' in the literature, this understudied area is one that affects the owners of roughly 99 percent of all United States businesses. Small business is an important source of jobs in the United States, employing almost 50 percent of all workers or 55 million employees in 2009 (U.S. Small Business Administration 2010). It is the owners of these businesses that are the focus of this study. Even the most basic connections - between the intention to exit and subsequent actions taken - are not understood. Exit decisions are often made late and without adequate study and analysis (Porter 1975). The purpose of this dissertation is to develop and then to test a model of entrepreneurial exit that essentially asks, does having an intention to exit make a difference in exit behaviors? With consideration of the theory of planned behavior and with contributions from the fields of entrepreneurship, business valuation, financial literacy and retirement, this research contributes both the concept and a model of 'endrepreneurship' to an understudied area. Endrepreneurship ("END-ruh-prenurship", that is, the focus is "end") is defined in this research as the act of undertaking exit from the business by its owner. As such, the exiting owner, or endrepreneur, undertakes actions toward exit ("exit behaviors") throughout the life of the venture and assumes the financial and individual risks of exiting the business. This research focuses on a specific type of owner exit, retirement. Using data from a survey by the National Federation of Independent Businesses (N.F.I.B), it tests whether there are differences in exit behaviors between those entrepreneurs who state an intention to retire and those who do not intend to retire. It is not that owners don't say they will retire - they do, as evidenced by survey responses used in this research. Results show minimal differences in exit behaviors between the owners who say they will and the owners who say they will not retire, suggesting that both types of entrepreneurs attach neither meaning nor meaningful actions to the intention to retire.

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