The impact of entrepreneurial alertness on the performance of youth-owned enterprises

Abstract

Background: A lack of profitability attributes to 23% of business failures, which in turn, stems from young entrepreneurs’ inability to recognise and discover profitable business opportunities. Enhancing entrepreneurial alertness (EA) can play a crucial role in identifying and evaluating lucrative business prospects. Aim: The aim of this paper is to examine how entrepreneurial alertness (EA) impacts the business performance of youth-owned enterprises in South Africa. Setting: The paper focussed on registered and unregistered youth-owned businesses operating in various sectors in South Africa. Methods: This study was conducted by distributing self-administered questionnaires to youth entrepreneurs who run registered and unregistered businesses. A quantitative research approach was adopted using simple random sampling to collect primary data. A sample size of 126 youth entrepreneurs was attained, and multiple regression was used to test the study hypotheses. Results: Entrepreneurial alertness measured using evaluation and judgement dimensions were found to have a direct impact on enterprise profitability and subsequently lead to overall enterprise performance. The results further showed that scanning and search, and association and connection dimensions do not have an impact in any of the enterprise performance indicators. Conclusion: South African youth entrepreneurs do not associate alertness to enterprise performance when alertness is measured by scanning and search, and association and connection. Contribution: The study reveals that alertness measured by evaluation and judgment has an impact on enterprise performance and that alertness can be used to mitigate failures of youth-owned enterprises. The study recommends that business performance must be measured by innovativeness rather than profitability since alertness impacts innovativeness more.