EXPLORING ENTREPRENEURIAL EXIT STRATEGIES AND SURVIVAL OF SMALL AND MEDIUM OWNED ENTREPRISES IN DEVELOPING ECONOMIES-A CASE OF

Abstract

Entrepreneurial exit strategy is a critical component in entrepreneurial process, where a well-prepared strategy helps entrepreneurs to reduce the potential loss of their current business, prepare them to face the post-exit era, and improve the chance of re-entering business after quitting. While such benefits might be true in the context of developed countries, we are critical of their existence in the context of developing economies like Kenya. We enrich the entrepreneurial processes literature by examining entrepreneur’s exit strategy and the factors influencing it in the novel context of the developing economies - with a focus of Kenya. This will be further catalyzed by the new reality caused by the Covid-19 pandemic which is bringing its own unique challenges for SMEs.The study was based on three major entrepreneurial exit strategies, which are resignation, business sales, and succession. The interview was conducted on 100 Kenyans small and medium-sized enterprises (SMEs) entrepreneurs with diverse backgrounds. Data was collected using a 5-point Likert scale questionnaire to gather perception from the respondents’. Based on the study it was found out that most of the small and medium owned entrepreneurs did not have a clear entrepreneurial exit strategy in terms of resignation, business sale or succession plan which affected the survival of their enterprises. In addition, the research found several models explaining how the entrepreneurs need to select each of this strategy for enterprise survival.