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2 The Challenges of Poverty When Starting a Business

  • Michael H. Morris
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De Gruyter Handbook of Poverty, Disadvantage and Entrepreneurship
Ein Kapitel aus dem Buch De Gruyter Handbook of Poverty, Disadvantage and Entrepreneurship

Abstract

People who experience generational poverty encounter a unique set of obstacles when attempting to start and grow a business. Based on the multi-faceted nature of poverty, the author identifies four distinct challenges that the poverty entrepreneur must overcome: literacy gaps, a scarcity mindset, intense nonbusiness pressures, and lack of a safety net. Labeled as the liabilities of poorness, these challenges are in addition to the liabilities of newness and smallness confronted by all entrepreneurs. It is argued that the collective impact of the four liabilities of poorness has profound implications for the nature of the ventures created by the poor, how these entrepreneurs recognize opportunities and approach decision-making, and the performance and sustainability of these businesses. The author concludes that the potential of entrepreneurship as a poverty alleviation tool is tied to intervention approaches that explicitly address the liabilities of poorness.

Abstract

People who experience generational poverty encounter a unique set of obstacles when attempting to start and grow a business. Based on the multi-faceted nature of poverty, the author identifies four distinct challenges that the poverty entrepreneur must overcome: literacy gaps, a scarcity mindset, intense nonbusiness pressures, and lack of a safety net. Labeled as the liabilities of poorness, these challenges are in addition to the liabilities of newness and smallness confronted by all entrepreneurs. It is argued that the collective impact of the four liabilities of poorness has profound implications for the nature of the ventures created by the poor, how these entrepreneurs recognize opportunities and approach decision-making, and the performance and sustainability of these businesses. The author concludes that the potential of entrepreneurship as a poverty alleviation tool is tied to intervention approaches that explicitly address the liabilities of poorness.

Kapitel in diesem Buch

  1. Frontmatter I
  2. De Gruyter Handbooks in Business, Economics and Finance V
  3. Contents VII
  4. List of Contributors XI
  5. Preface XXI
  6. Part 1: Understanding the Poverty and Entrepreneurship Interface
  7. 1 Toward a New Paradigm for Poverty Entrepreneurship 1
  8. 2 The Challenges of Poverty When Starting a Business 25
  9. 3 Opportunity Recognition Through the Lens of Poverty 43
  10. 4 Theoretical Frameworks for Research on Poverty and Entrepreneurship: A Review and Agenda for Future Research 61
  11. Part 2: Contextual Variables Affecting Poverty and Entrepreneurship
  12. 5 The Informal Economy and Poverty in Developing and Emerging Economies: Outlining a Process of Semi-formalization to Support Development 111
  13. 6 Understanding Entrepreneurship and the Informal Sector 135
  14. 7 Business Formalization, Government Program Participation, and Civic Engagement: Evidence from West Java, Indonesia 157
  15. 8 Entrepreneurship and Poverty: A Comparative Institutional Perspective 183
  16. 9 Ecosystems and the Poverty Entrepreneur 207
  17. 10 It Takes a Village: Towards Entrepreneurial Ecosystems Dedicated to the Poor 229
  18. 11 Child Entrepreneurs in Bangladesh: The Role of the Poor Family in Initiating Businesses 253
  19. 12 From Surviving to Thriving: The Multiplier Effect of Women’s Entrepreneurship in Emerging Markets 269
  20. 13 The Impact of Poverty, Disadvantages, and Entrepreneurship Among Refugee Women Entrepreneurs in Glasgow- Scotland 295
  21. 14 Beyond the Narrative: Exploring the Myths of Race, Poverty, and Entrepreneurship 331
  22. Part 3: Mechanisms to Facilitate Sustainable Entrepreneurship
  23. 15 The Psychology of Poverty-Based Entrepreneurs: Faith-Community Involvement, Status Hierarchies, and Venture Flourishing 357
  24. 16 Faith and Entrepreneurial Decision- Making: Case Experiences with People in Poverty Circumstances 381
  25. 17 Poor Entrepreneurs’ Strategies to Overcome Resource Constraints 403
  26. 18 Entrepreneurial Hustle and the Poverty Entrepreneur: Uncovering Alternative Means to Achieve Success 429
  27. 19 Microfinance for Poverty Entrepreneurs: Addressing Gender-Based Violence for Business Success 445
  28. 20 Alternative Funding Mechanisms for Low-Income Entrepreneurs in Sub-Saharan Africa 465
  29. 21 Microfranchising and the Poor 493
  30. 22 Patterns, Process, and Socioeconomic Impacts of Smallholders’ Agro-machinery- Based Entrepreneurship in Bangladesh 513
  31. 23 Marketing Practices and the Entrepreneurial Success of Women in Côte d’Ivoire: The Role of Cultural Systems 533
  32. 24 The Cooperative Enterprise and Poverty Reduction in Africa 553
  33. 25 Approaches to Mentoring When Supporting Poverty Entrepreneurs 577
  34. Part 4: Priorities for Advancing the Poverty and Entrepreneurship Interface
  35. 26 Critical Perspectives on Research Priorities at the Poverty and Entrepreneurship Interface 607
  36. 27 Fostering Poverty Entrepreneurship: A Review of Key Policy Needs and Approaches in the United States 619
  37. 28 Overcoming Adversity: Priorities of Disadvantaged Entrepreneurs Participating in a Holistic Community Intervention Program 643
  38. 29 Priorities When Attempting to Scale a Poverty Intervention Program 667
  39. List of Figures 691
  40. List of Tables 693
  41. About the Editors 695
  42. Index 697
https://doi.org/10.1515/9783111215013-002

Kapitel in diesem Buch

  1. Frontmatter I
  2. De Gruyter Handbooks in Business, Economics and Finance V
  3. Contents VII
  4. List of Contributors XI
  5. Preface XXI
  6. Part 1: Understanding the Poverty and Entrepreneurship Interface
  7. 1 Toward a New Paradigm for Poverty Entrepreneurship 1
  8. 2 The Challenges of Poverty When Starting a Business 25
  9. 3 Opportunity Recognition Through the Lens of Poverty 43
  10. 4 Theoretical Frameworks for Research on Poverty and Entrepreneurship: A Review and Agenda for Future Research 61
  11. Part 2: Contextual Variables Affecting Poverty and Entrepreneurship
  12. 5 The Informal Economy and Poverty in Developing and Emerging Economies: Outlining a Process of Semi-formalization to Support Development 111
  13. 6 Understanding Entrepreneurship and the Informal Sector 135
  14. 7 Business Formalization, Government Program Participation, and Civic Engagement: Evidence from West Java, Indonesia 157
  15. 8 Entrepreneurship and Poverty: A Comparative Institutional Perspective 183
  16. 9 Ecosystems and the Poverty Entrepreneur 207
  17. 10 It Takes a Village: Towards Entrepreneurial Ecosystems Dedicated to the Poor 229
  18. 11 Child Entrepreneurs in Bangladesh: The Role of the Poor Family in Initiating Businesses 253
  19. 12 From Surviving to Thriving: The Multiplier Effect of Women’s Entrepreneurship in Emerging Markets 269
  20. 13 The Impact of Poverty, Disadvantages, and Entrepreneurship Among Refugee Women Entrepreneurs in Glasgow- Scotland 295
  21. 14 Beyond the Narrative: Exploring the Myths of Race, Poverty, and Entrepreneurship 331
  22. Part 3: Mechanisms to Facilitate Sustainable Entrepreneurship
  23. 15 The Psychology of Poverty-Based Entrepreneurs: Faith-Community Involvement, Status Hierarchies, and Venture Flourishing 357
  24. 16 Faith and Entrepreneurial Decision- Making: Case Experiences with People in Poverty Circumstances 381
  25. 17 Poor Entrepreneurs’ Strategies to Overcome Resource Constraints 403
  26. 18 Entrepreneurial Hustle and the Poverty Entrepreneur: Uncovering Alternative Means to Achieve Success 429
  27. 19 Microfinance for Poverty Entrepreneurs: Addressing Gender-Based Violence for Business Success 445
  28. 20 Alternative Funding Mechanisms for Low-Income Entrepreneurs in Sub-Saharan Africa 465
  29. 21 Microfranchising and the Poor 493
  30. 22 Patterns, Process, and Socioeconomic Impacts of Smallholders’ Agro-machinery- Based Entrepreneurship in Bangladesh 513
  31. 23 Marketing Practices and the Entrepreneurial Success of Women in Côte d’Ivoire: The Role of Cultural Systems 533
  32. 24 The Cooperative Enterprise and Poverty Reduction in Africa 553
  33. 25 Approaches to Mentoring When Supporting Poverty Entrepreneurs 577
  34. Part 4: Priorities for Advancing the Poverty and Entrepreneurship Interface
  35. 26 Critical Perspectives on Research Priorities at the Poverty and Entrepreneurship Interface 607
  36. 27 Fostering Poverty Entrepreneurship: A Review of Key Policy Needs and Approaches in the United States 619
  37. 28 Overcoming Adversity: Priorities of Disadvantaged Entrepreneurs Participating in a Holistic Community Intervention Program 643
  38. 29 Priorities When Attempting to Scale a Poverty Intervention Program 667
  39. List of Figures 691
  40. List of Tables 693
  41. About the Editors 695
  42. Index 697
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Heruntergeladen am 9.11.2025 von https://www.degruyterbrill.com/document/doi/10.1515/9783111215013-002/html
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