Human Resources, Financial Resources and Performance in Small Business

Westhead, Wright and Usbasaran (2001) suggestedresources - owner resources and owner commitment.
that human and financial resources are those thatA significant positive correlation was found between
need to be incorporated into the research model,the two dimensions and net cash flow. No correlation
which they had constructed.has been found to the log of employment growth.
The small business' entrepreneur/owner is to beWesthead et al. (2001) findings support the hypothesis
emphasized as a resource of paramount importance.that, if the firm's founder possesses a significant prior
According to Story (1994), the entrepreneur'sknowledge of the industry, it is to be expected that the
experience, expertise and abilities are generallyfirm would register profitability beyond the means of its
considered a primary parameter of influence over thecompetitors. Premaratne (2001) indicates at a
firm's survival and development. Mullins (1996) claimscorrelation between subsidies granted to the firm and
that the entrepreneur's decision-making capacityincrease in sales. However, he does not support a
strongly affects organizational processes thatcorrelation between subsidies and profitability. Wiklund
constitute the foundation for competitive advantage asand Shepherd (2005) have found a significant positive
well as for growth. Rangone (1999) has defined thecorrelation between access to capital and
entrepreneur as a "unique" resource which supportsperformance. Pena (2004) examined the relationship
the rest of the resources.between human resources (education; management
Several studies were conducted in order to learnexperience; prior entrepreneurial experience;
about the relationship between human or financialentrepreneurs' relatives; implementation of ideas
resources and small business performance. Cooper,acquired in previous workplaces) and increase in profit,
Gimeno-Gascon and Woo (1994) have found thatincrease in sales and increase in the number of
human resources, and especially the owner'semployees. A positive correlation was found between
education, are correlated with growth. Moreover,education and the implementation of ideas acquired in
knowledge of the industry and financial resourcesprevious workplaces, and an increase in the number of
contribute to growth as well as to the firm's survival.employees and in sales. Chrisman, Mcmullan and Hall
According to Westhead (1995), the founder's(2005) utilized education and prior experience as
experience affected performance and survival incontrol variables. A correlation was found between
hi-tech enterprises over a period of six years from theprior experience and an increase in the number of
day of foundation. Brush and Chaganti (1999)employees and in sales. No such correlation with
examined small trade and service oriented businesses.education was found.
Their study designates two dimensions of human