Financial bootstrapping and survivability in family firms: A resource-based perspective

Financial bootstrapping (FB) is a resource-dependent management strategy within the contingencies of organizing in small businesses. In this regard, the notion of start-up and operational capital has become an important ingredient in the performance of family businesses, particularly in resource-scarce environments. Drawing on the resource-based view theory (RBV) and a multiple case study design, we examine the various bootstrapping strategies of family businesses in the context of relatively underdeveloped institutions and markets. Following family businesses being at the convergence point of resource constraint, we show why some family businesses are more likely to survive than others. Our data evidence suggests that to ensure financial sustainability, longevity, survivability, and competitive advantage in family businesses, the use of both inward and outward bootstrapping strategies is crucial. Nevertheless, the use of personal and family financial resources is widely practised in resource-scarce environments. We conclude by delineating some relevant implications of our study to policy and research regarding the survival of family businesses.