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RESEARCH PRODUCT

The Early Entrepreneurial Stage in Finnish Family and Nonfamily Firms

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This study examined factors influencing the survival and success of 200 Finnish family and nonfamily firms in the metal-based manufacturing industry and business services over the first three years of their operation. The features that this study reviewed include owner-manager personality attributes, entrepreneurial competence, and motives for the start-up. Strategic choices of the firms were also examined. The study found that family firms were better equipped to survive beyond the early entrepreneurial stage than were nonfamily businesses. The entrepreneurial abilities and resources of the family business owners enabled them to operate relatively successfully in the nearby market, often with one unique product. The family firms were more conscious of survival and family well-being than profitability or market position. A higher mortality rate was discovered among the nonfamily firms. Failed firms were often established with unrealistic expectations, and their performance deteriorated rapidly after their early success.