Entrepreneurial mindsets of youth from a previously 
disadvantaged area in Mafikeng, South Africa 
 
A research report submitted to the Faculty of Commerce, Law and Management, 
University of the Witwatersrand, in partial fulfilment of the requirements for the degree 
of Master of Management in Entrepreneurship and New Venture Creation 
 

 

Student 

OTLOTLENG MOMPHI - 1875280 

 

 

 

Supervisor 

DR JABULILE MSIMANGO - GALAWE 

 

 

 

 

                                                                                                                                Wits Business School 

                                                                                                                                                March 2022 



   

 
 

ii 

ABSTRACT 

 

High entrepreneurship intention but low entrepreneurial activity by the youth, is one of the 

conversations highlighted in literature as a challenge in South Africa. With the high unemployment rate 

in South Africa, the question asked is why is the youth scared of exploring entrepreneurship as a 

solution to unemployment? Is it the fear of failure? fear of rejection? fear of being judged? The theory 

of mindset was developed to understand why some people care more about proving their abilities while 

others care more about improving their abilities 

The purpose of this study was to investigate the extent that an entrepreneurial mindset has an influence 

on the success of SME’s that are operated by the youth from the previously disadvantaged areas of 

Mafikeng. Entrepreneurial mindset was theorized as defined by Carol Dwerk – Fixed mindset and 

Growth mindset.  

The study employed an experimental quantitative methodology which followed the post-positivist 

approach. Primary data with a sample size of 75 respondents was collected from SME owners residing 

in Mafikeng through a self-administered survey. Data analysis included descriptive analysis, factor 

analysis, correlation, multiple regression tests. SME success was the dependent variable, with 2 

independent variables – fixed mindset and growth mindset.  

The results of the study revealed that there was no significant relationship between the fixed mindset 

and SME success, and the relationship between the growth mindset and SME success was found to be 

significant. 

 

 

Key words: SME success, Fixed mindset, Growth mindset, Entrepreneurship mindset, previously 

disadvantaged areas 

 

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iii 

DECLARATION 

 
 

I, Otlotleng Momphi declare that this research report is my own work except as indicated in the 

references and acknowledgements. It is submitted in partial fulfilment of the requirements for the 

degree of Master of Management in the Field of Entrepreneurship at the University of the 

Witwatersrand, Johannesburg. It has not been submitted before for any degree or examination in this 

or any other university. 

 

 

 

------------------------------------------------- 

 (Type your name in full here, and sign in the space above) 

 

 

Signed at …………………………………………………… 

 

 

On the …………………………. day of …………………….………… 2022. 

 

 

 

 

 

 

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iv 

DEDICATIONS 

 

I would first like to start by thanking God for guiding me through my research process, during times 

when I did not have the motivation to work on it and he answered my prayers when I asked him to be 

with me.  

To my mother, Olebogeng Momphi – my cheerleader, my support system, thank you for always being 

there for me. Pushing me when I wanted to give up and cheering me up when I was doing good.  

To my father, Lesang Montsho – my superhero, thank you for always encouraging me through this 

journey. Thank you for working so hard to make sure I can achieve my dreams.  

To my little sisters, Rebaone Momphi and Gofaone Momphi – thank you for always making sure that 

I either have an energy drink or a cup of coffee on hand during the long nights I had to work on this 

research. Thank you for cheering me on when I lost my motivation. I hope this journey shows you that 

you can also achieve anything you put your minds to.  

To my little brothers – Modisaotsile Montsho and Tshegofatso Montsho, your presence in my life has 

always made me want to be a better person, a good big sister, and a pillar to you both. I hope one day 

when you can understand this you are motivated to know that you can also achieve anything you put 

your minds to.  

To my extended family and friends who were so kind to proofread my research repeatedly without 

complaints, who sent me food when I forgot to eat, who called me to remind me that I can do it.  

 

 

I love you all and I am dedicating this to you. 

 

 

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v 

ACKNOWLEDGEMENTS 

 

To my supervisor, Dr Jabulile Msimango-Galawe - I wish we had more personal time to get to know 

each other, but the virtual times we had have been nothing short of inspiring. Thank you for always 

being available to go through my work and give me guidance, positive criticism in making sure that we 

meet the deadlines and produce a top-class report. 

To everyone in Mafikeng who took time to complete my survey. 

To everyone who took the time to share my survey link. 

Dr K Mpeta for his academic mentorship and guidance to me during this journey. 

 

 

THANK YOU ALL 

 

 

 

 

 

 

 

 

 

 

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vi 

LIST OF TABLES  

 

Table 1.3.1: Research questions, Objectives, and variables………………………………………3-4 

Table 2.2.1: Prior definitions of entrepreneurial mindset……………………………………………10 

Table 3.7.1: Research instrument……………………………………………………………………..25 

Table 3.9.1: Reverse questions………………………………………………………………………..27 

Table 3.10.3: The Classifications of Cronbach alpha coefficient………………………………..……30 

Table 4.4.2.1: Annual turnover/revenue satisfaction distribution……………………………….……38 

Table 4.4.2.2: Gross profit satisfaction distribution……………………………………….…….……38 

Table 4.4.2.3: Net profit margin satisfaction distribution………………………………….…………39 

Table 4.4.2.4: Return on assets satisfaction distribution………………….………………………..…40 

Table 4.4.2.5: Return on investment satisfaction distribution…………………...………………...…40 

Table 4.4.2.6: Return on equity satisfaction distribution………………………………………….….41 

Table 4.4.2.2.1: You have a certain amount of intelligence, and you cannot do much to change it…42 

Table 4.4.2.2.2: Your intelligence is something about you that you cannot change much…….……42 

Table 4.4.2.2.3: You can learn new things, but you cannot really change your basic intelligence…43 

Table 4.4.2.2.4: To be honest, you cannot really change how intelligent you are……………………43 

 Table 4.4.2.2.5: To be honest, you cannot really change how much talent you have……………….44 

Table 4.4.2.2.6: Your talent in an area is something about you that cannot change very much……44 

Table 4.4.2.2.7: To be honest, you cannot really change how much talent you have……………….45 

Table 4.4.2.2.8: You can learn new things, but you cannot really change your basic level of talent…..……45 

Table 4.4.2.2.9: You can change even your basic level of talent considerably ……………………………..…46 

Table 4.4.2.2.10: No matter how much talent you have, you can always change if quite a bit….…46 

Table 4.4.2.2.11: You can always substantially change how much talent you have…………………47 

 

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vii 

Table 4.4.2.2.12: No matter who you are, you can significantly change your level of talent……47 

Table 4.4.2.2.13: You can change even your basic intelligence level considerably…………..….48 

Table 4.4.2.2.14: You can always substantially change how intelligent you are…………….……48 

Table 4.4.2.2.15: You can always substantially change how intelligent you are………………….49 

Table 4.4.2.2.16: No matter who you are, you can significantly change your intelligence level…49 

Table 4.5.1: KMO and Bartlett’s test……………………………………………………………...50 

Table 4.5.2.: Total variance explained ………………………………………………………………51 

Table 4.5.4: Pattern matrix…………………………………………………………………………...52 

Table 4.6.1: Cronbach alpha of the SME Success construct……………………………………..…53 

Table 4.6.2: Cronbach alpha of the Growth mindset construct……………………….……………53 

Table 4.6.3: Cronbach alpha of the fixed mindset construct…………………………….…………54 

Table 4.7.1: Correlation table…………………………………………………………………….….54 

Table 4.8.1: Summary of skewness and Kurtosis …………………………………………………..55 

Table 4.8.5: Collinearity Statistics…………………………………………………………………...56 

Table 4.9.1.: The model summary……………………………………………………………..…….58 

Table 4.9.2: ANOVA table…………………………………………………………………………..59 

Table 4.9.3: Coefficient table…………………………………………………………………..……60 

 

 

 

 

 

 

 

 

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viii 

LIST OF FIGURES 

 

Figure 2.3.1: Differences between the fixed and growth mindset………………………………..12 

Figure 2.3.2:5 Strategies to shift from the fixed mindset to growth mindset…………………….14 

Figure 4.3.1: Respondent’s gender distribution……………………………………………………34 

Figure 4.3.2: Respondent’s highest level of education distribution………………………………34 

Figure 4.3.3: Respondent’s age distribution……………………………………………………….35 

Figure 4.3.4: Respondent’s business exposure distribution………………………………………35 

Figure 4.3.5: Respondent’s business experience distribution…………………………………….36 

Figure 4.4.1: Descriptive statistics…………………………………………………………………37 

Figure 4.5.3: Scree plot………………………………………………………………………….…51 

Figure 4.8.2: Normal Q-Q plot………………………………………………………………..……56 

Figure 4.8.3: Histogram…………………………………………………………………………….56 

Figure 4.8.4: Scatter plot……………………………………………………………………………57 

 

 

 

 

 

 

 

 

 

 

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ix 

 

TABLE OF CONTENTS 

 
CHAPTER 1 – INTRODUCTION ............................................................................................................. 1 

1.1 CONTEXT OF THE STUDY ........................................................................................................... 1 
1.2 MOTIVATION AND PROBLEM STATEMENT ......................................................................... 2 
1.3 RESEARCH QUESTIONS AND OBJECTIVES OF THE STUDY ............................................. 3 
1.4 CONCEPTUAL DEFINITIONS ...................................................................................................... 4 
1.5 CONTRIBUTION OF THE STUDY ............................................................................................... 5 
1.6 DELIMITATIONS OF THE STUDY .............................................................................................. 6 
1.7 STRUCTURE OF THE REPORT ................................................................................................... 6 

CHAPTER 2 – LITERATURE REVIEW .................................................................................................. 8 
2.1 INTRODUCTION ............................................................................................................................. 8 
2.2 ENTREPRENEURIAL MINDSET ................................................................................................. 8 
2.3 THEORY OF MINDSET ............................................................................................................... 11 

2.3.1 FIXED MINDSET ..................................................................................................................... 11 
2.3.2 GROWTH MINDSET ............................................................................................................... 13 

2.4 SMALL AND MEDIUM ENTERPRISES SUCCESS ................................................................. 15 
2.5 THE EXTENT A FIXED MINDSET HAS ON THE SUCCESS OF SMEs ............................... 16 
2.6 SUMMARY OF CHAPTER ........................................................................................................... 19 

CHAPTER 3 – RESEARCH METHODOLOGY .................................................................................... 20 
3.1 INTRODUCTION ........................................................................................................................... 20 
3.2 RESEARCH PARADIGM ............................................................................................................. 20 
3.3  RESEARCH APPROACH ............................................................................................................. 20 
3.4 RESEARCH DESIGN .................................................................................................................... 21 
3.5 POPULATION ................................................................................................................................ 22 
3.6 SAMPLING METHOD AND SAMPLE SIZE ............................................................................. 23 

3.6.1 SAMPLING METHOD ............................................................................................................. 23 
3.6.2 SAMPLE SIZE ........................................................................................................................... 23 

3.7 RESEARCH INSTRUMENT ......................................................................................................... 24 
3.8 PROCEDURE FOR DATA COLLECTION ................................................................................ 26 



   

 
 

x 

3.9 DATA ANALYSIS AND INTERPRETATION APPROACH .................................................... 26 
3.9.1 DATA CLEANING PROCESS ................................................................................................ 26 
3.9.2 DATA ANALYSIS ..................................................................................................................... 27 

3.10 VALIDITY AND RELIABILITY OF RESEARCH .................................................................... 28 
3.10.1 VALIDITY TESTING ........................................................................................................... 28 
3.10.2 RELIABILITY TESTING .................................................................................................... 28 
3.10.3 THE CRONBACH ALPHA .................................................................................................. 30 

3.11 CORRELATION ANALYSIS ........................................................................................................ 31 
3.12 REGRESSION ANALYSIS ............................................................................................................ 31 
3.13 ETHICAL CONSIDERATIONS ................................................................................................... 31 
3.14 CHAPTER SUMMARY ................................................................................................................. 32 

CHAPTER 4 - PRESENTATION OF RESULTS .................................................................................... 33 
4.1 INTRODUCTION ........................................................................................................................... 33 
4.2 RESPONDENTS CHARATERISTICS ......................................................................................... 33 
4.3 DEMOGRAPHICS PROFILES OF RESPONDENTS ................................................................ 33 

4.3.1 DISTRIBUTION BY GENDER ................................................................................................ 33 
4.3.2  LEVEL OF EDUCATION ....................................................................................................... 34 
4.3.4 OTHER DEMOGRAPHICS ..................................................................................................... 35 

4.4 DESCRIPTIVE ANALYSIS ........................................................................................................... 36 
4.4.1 DESCRIPTIVE ANALYSIS OF SAMPLE ............................................................................. 36 
4.4.2 DESCRIPTIVE ANALYSIS OF CONSTRUCTS ................................................................... 37 
4.4.2.1 SME SUCCESS ...................................................................................................................... 37 
4.4.2.2 ENTREPRENEURIAL MINDSET ...................................................................................... 41 
4.4.2.2.1  FIXED MINDSET ............................................................................................................ 42 
4.4.2.2.2  GROWTH MINDSET ...................................................................................................... 46 

4.5 VALIDITY TESTING RESULTS ................................................................................................. 50 
4.6 RELIABILITY TESTS RESULTS ................................................................................................ 53 
4.7 CORRELATIONS .......................................................................................................................... 54 
4.8 MULTIPLE REGRESSION ASSUMPTIONS ............................................................................. 55 
4.9 HYPOTHESES TESTING ............................................................................................................. 58 
4.10 CHAPTER SUMMARY ................................................................................................................. 60 

CHAPTER 5 – DISCUSSION OF RESULTS .......................................................................................... 61 
5.1 INTRODUCTION ........................................................................................................................... 61 



   

 
 

xi 

5.2 DEMOGRAPHIC PROFILE OF THE RESPONDENTS ........................................................... 62 
5.2.1 GENDER .................................................................................................................................... 62 
5.2.2 LEVEL OF EDUCATION ........................................................................................................ 62 
5.2.3 AGE OF THE RESPONDENTS ............................................................................................... 63 
5.2.4 BUSINESS EXPERIENCE/EXPOSURE ................................................................................ 64 

5.3 DISCUSSION PERTAINING TO HYPOTHESIS 1 .................................................................... 65 
5.4 DISCUSSION PERTAINING TO HYPOTHESIS 2 .................................................................... 66 
5.5 CHAPTER SUMMARY ................................................................................................................. 66 

CHAPTER 6 – CONCLUSIONS, IMPLICATIONS AND RECOMMENDATIONS ............................. 67 
6.1 INTRODUCTION ........................................................................................................................... 67 
6.2 CONCLUSIONS OF STUDY ......................................................................................................... 67 
6.3 IMPLICATIONS OF THE STUDY .............................................................................................. 69 
6.4 LIMITATIONS OF THE STUDY ................................................................................................. 70 
6.5 RECOMMENDATIONS FOR FUTURE RESEARCH ............................................................... 70 
6.6 CHAPTER SUMMARY ................................................................................................................. 71 

REFERENCE LIST .................................................................................................................................. 72 
APPENDIX LIST ..................................................................................................................................... 79 

APPENDIX 1 - CONSISTENCY MATRIX ............................................................................................... 79 
APPENDIX 2 - RESEARCH INSTRUMENT ........................................................................................... 81 
APPENDIX 3 – ETHICS CLEARANCE CERTIFICATE ....................................................................... 91 

 
 

 

 

 



   

 
 

1 

CHAPTER 1 – INTRODUCTION 
 

This chapter will begin with the context of the study, which will then be followed by a section that will 

detail the motivation and problem statement of the study then the research questions and objectives of 

the study. The chapter will then be concluded by a section that will define the concepts used and the 

contribution and significance of the study. 

1.1 CONTEXT OF THE STUDY	
 

This section will give the context of the study which provides an overview of why this study is 

important. South Africa recorded a 32,6% of unemployment rate in the fourth quarter of 2020, this 

depicts that an estimated 7,2 million people are unemployed in the country (Omarjee, 2021). In the first 

quarter of 2020, the stats showed that the youth of South Africa are the most vulnerable age group in 

the labour market because they accounted for 59% of the unemployment rate (Stats SA, 2020). The 

highest unemployment rate reported for the youth in South Africa was 64,4% in July 2021 (Stats SA, 

2021). As a developing country, unemployment in South Africa can be described as a wicked problem 

(Van der Westhuizen, Marichen, & Swart, Ignatius, 2015). Through economic declines, high poverty 

levels and high levels of crime, unemployment remains high and the population that gets affected the 

most is the youth of the country (Schachatebeck and Hughes, 2017). 

Small and Medium Entreprises (SME’s) are an imperative source of discovering innovative 

technologies and development of new products and services to any economy, therefore it is important 

to encourage the growth of SME’s, especially in the youth age groups as this will help with reducing 

the unemployment rate of the country (Leboea, 2017). SME success in South Africa can assist with 

reducing the unemployment rate because the small businesses usually use more labor-intensive 

methods of production compared to the large businesses (Leboea, 2017), and they employ the youth 

because they are the most affected age group by unemployment (Stats SA, 2021). 

 

 

 



   

 
 

2 

The youth from previously disadvantaged backgrounds in South Africa are subjected to poor education 

quality, limited information and resources which affects the way they view and participate in the world 

(Mathebula, 2019). The 2011 census survey according to StatsSA (2011) conducted in Mafikeng 

revealed that 47,1% of the youth in Mafikeng is unemployed, more than 26% of the youth have their 

basic education while only 12,4% have higher education this survey was done on an estimated 

population of 291 521 people. Mafikeng is the capital city of the North West Province in South Africa 

which is dominated by rural areas and can be described as a previously disadvantaged area. Its growth 

rate is captured at 1,16% between 2001-2011 (StatsSA, 2011).  

Attitudes concerning a certain behavior are influenced by subjective norms about that behavior (Ajzen, 

1991). Oni and Mavuyangwa (2019) stated that entrepreneurial education, demographic factors, 

attitude, and skills are some of the various factors that influence entrepreneurial mindsets of people’s 

entrepreneurial intentions. 

A few of the prominent questions that this study will ask are, what influences the entrepreneurial 

mindsets of the youth from a previously disadvantaged area in South Africa? Are they inclined to seek 

entrepreneurial opportunities once they leave school or, do they seek for employment through the 

traditional ways (corporate or state employment), and do they believe that their beliefs and perceptions 

can change through their efforts in wanting to be more successful (Dwerk, 2015). 

1.2 MOTIVATION AND PROBLEM STATEMENT 
 

This section of the research report will describe the details of what the problem is, why it is considered 

a problem and how the study will address the problems in the context of this study's research objectives.  

In the GEM report (2018), the authors noted that the poor quality of education in the South African 

public schools is the main contributor to the low entrepreneurial activity numbers and for that to 

improve the government must have a closer look at the entrepreneurship ecosystem and develop a 

strong course of action.  

 

 

 



   

 
 

3 

Further to that point, according to the GEM report (2020), 90% South Africans get into 

entrepreneurship because of lack of jobs and money.  

This leads to an entrepreneurial activity that is accounted for by businesses that are a replica of others 

and non-productive entrepreneurship venture in respect of the bigger economic picture (job creation). 

Non-productive entrepreneurship refers to business ventures that have no real contribution to the 

economy and can in some instances be disruptive (Sauka, 2008).  

Neneh (2011) discusses the importance of the relationship between education and business creation. It 

fosters skills and qualities that will enable people to be more successful in entrepreneurship.  

Research of entrepreneurship is growing because researchers and policy makers have recognised it for 

the value it has on the economic growth of a county (Kloepfer and Castrogivovanni, 2018). 

Entrepreneurial activities are a direct influence of a country’s level of innovation, economic growth, 

and competition (Oni & Mavuyangwa, 2019).  

This study will investigate the extent an entrepreneurial mindset has on the success of small and 

medium businesses in a previously disadvantaged area in South Africa, Mafikeng. It will explore the 

fixed mindset and the growth mindset as entrepreneurial mindsets which will be adopted as the 

independent variables of the study and SME success as the dependent variable.  

1.3 RESEARCH QUESTIONS AND OBJECTIVES OF THE STUDY	
 

The table below will describe in detail the research questions, objectives, and variables of this study.  

 

Research objective:  

To investigate the influence an entrepreneurial mindset has on the success of SMEs in a 

previously disadvantaged area in South Africa, Mafikeng. 



   

 
 

4 

Objective #1 

To investigate the influence a fixed mindset 

has on the success of SMEs in a previously 

disadvantaged area in South Africa, 

Mafikeng. 

Objective #2 

To investigate the influence a growth mindset has 

on the success of SMEs in a previously 

disadvantaged area in South Africa, Mafikeng. 

Research question #1  

What extent does a fixed mindset have on the 

success of SMEs in a previously 

disadvantaged area in South Africa, 

Mafikeng. 

Research Question #2 

What extent does a growth mindset have on the 

success of SMEs in a previously disadvantaged 

area in South Africa, Mafikeng. 

Variables 

Independent variable (IV): Fixed mindset 

Dependent variable (DV): SME success 

Variables 

Independent variable (IV): Growth Mindset 

Dependent variable (DV): SME success 

Table 1.3.1 Research questions, objectives, and variables 

 

1.4 CONCEPTUAL DEFINITIONS	
 

• Entrepreneurial mindset - Refers to the propensity to learn, discover, evaluate, and exploit 

entrepreneurial opportunities (Kouakou et al, 2019) 

• Growth Mindset - is described as that of a person whose beliefs and perceptions can change 

through their efforts in wanting to be more successful (Dwerk, 2015). 

• Fixed Mindset - is described as that of a person who believes that their beliefs or perceptions 

cannot change, they are set on stone (Dwerk, 2015). 



   

 
 

5 

• Previously disadvantages areas - A group of people who live in areas that have bad conditions 

tend to not get good quality education and have a reasonable standard of living (Collins, 2021) 

• Youth - South African citizens of the age group between 18-35 years old (Stats SA ,2021) 

• SME Success – Small and medium enterprises that survive their infancy stage without shutting 

down (Kunene, 2008) 

 

1.5 CONTRIBUTION OF THE STUDY 
The study will contribute to the existing pool of knowledge about entrepreneurial mindsets. The theory 

of mindset has been studied extensively by researchers from different parts of the world (Holm, 

Belousova, Groen, 2018 see also; Lechman and Kazmierska, 2014; Corbett and Lynch, 2021; Brocher, 

2010; Lindh, 2017; and Dwerk, 2015. This study is unique from previous studies because of its 

approach to study entrepreneurial mindset of the youth from a previously disadvantaged area in South 

Africa, Mafikeng. This study would be the first to undergo such analysis/research about the city.  

In an article by Kouakou, et al, (2019), a recommendation made for further study was to investigate 

what can be done to improve the entrepreneurial mindset of people in previously disadvantaged areas. 

These areas include people who contribute to the economic growth of the county and ask what 

mechanism can be used to introduce entrepreneurial education. Schachatebeck and Hughes (2017) call 

for the promotion of youth entrepreneurship in South Africa to help address the challenging socio-

economic realities the country is facing. Burgoyne, Hambrick and Macnamara (2020) noted a call to 

do research about entrepreneurial mindset a “national education priority” by other contributors to the 

topic. Research from other scholars have indicated the importance of more focus to be placed on the 

future and younger generation to be more entrepreneurial and this includes being innovative and 

creative with the ability to recognise and act on opportunities (Neneh, 2011).  

Furthermore, it will provide useful recommendations from the data and literature discussions to public 

authorities, economic leaders, entrepreneurship training programs and education institutions located in 

the rural parts of South Africa on the entrepreneur spirits that exists in the youth residing there, so they 

are prepared when going in to teach about entrepreneurship.  



   

 
 

6 

Mago and Ngorora (2018) stated in an article that rural entrepreneurship is a tool that can be used to 

boost rural development through income generation and job creation, it also improves the standard of 

living of the people residing in rural areas. 

The study will also benefit the government/Non-profit organizations in their efforts to increase rural 

entrepreneurship by guiding them on the mindsets that exist about entrepreneurship, so they know 

where to focus their investments.  

1.6 DELIMITATIONS OF THE STUDY 
 

This study was limited to businesses that are run/operated in the rural parts of Mafikeng, since the 

objective of the study was to investigate the influence, an entrepreneurial mindset has on the success 

of SMEs in previously disadvantaged area in South Africa, Mafikeng. The study was focused on the 

youth of Mafikeng who own and run small businesses. It did not cover anyone who is a business owner 

but falls outside of the youth age group as defined by StatsSA (2021) 18-35 years. The study had no 

restrictions of the industry/sector the businesses should be operating in or how old the businesses should 

have been operating for. There were also no restrictions on the financial performance of the businesses 

either, but the data was collected to allow the researcher to test the influence an entrepreneurial mindset 

has on the success or failure of the SME.  

1.7 STRUCTURE OF THE REPORT 
 

This report begins with chapter 1 which gives the context of the study, motivation and problem 

statement followed by a table that depicts the research objective and problems of the study, the concepts 

used are then defined, the contribution and delimitations of the study are also discussed in this chapter.  

The next section of the report – Chapter 2, is where the researcher reviewed the relevant literature for 

this study and used it to operationalise the variables as per the research objectives. The important 

variables in this study are discussed and they include: entrepreneurial mindset, Carol Dwerk’s theory 

of mindset and SME success in South Africa. 

Chapter 3 details the methodological approach used in this study.  It begins with the research paradigm 

followed by the research design; population definitions and the sample method and size are also 

discussed.  



   

 
 

7 

The research instrument description, procedure the research followed to collect data and the approach 

used to analyze that data is then discussed. Finally, the reliability and validity of the data is discussed.  

Chapter 4 presents the reader with the results of the study. The respondents' demographics profiles are 

presented followed by the financial performance indicator data presentation which will then be 

followed by the entrepreneurial mindset results.  

Chapter 5 discusses the results presented in chapter 4 to show the similarities, differences, or 

alternatives in comparison to the literature.  

The report is concluded with chapter 6 which will discuss the findings of the study and make 

conclusions and closing arguments regarding the research questions of this study.  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



   

 
 

8 

CHAPTER 2 – LITERATURE REVIEW 
 

2.1 INTRODUCTION 
 

The purpose of this chapter is to review literature that is relevant to the research study, that can be used 

to address the research objectives. The chapter will begin by providing a comprehensive literature 

background of the constructs of the study; Entrepreneurial mindset, Carol Dweck’s theory of the fixed 

and growth mindset and Small and Medium Enterprises (SME’s). The chapter will then be followed by 

a discussion of the first and second research questions and the hypothesis developed for both, which 

will be followed by the conclusion of the chapter.  

2.2 ENTREPRENEURIAL MINDSET	
 

An Entrepreneurial mindset is recognized as a vital role player in the process of becoming a successful 

entrepreneur (Kouakou, Li, Akolgo, Tchamekwen, 2019).  

An entrepreneurial mindset can be defined under the presence of these three factors as discussed by 

Kouakou, et al (2019), the ability to mobilize under difficult situations, the ability to sense and the 

ability to act fast. Neneh (2011) discusses that the ability to sense and adapt to uncertainty can be 

considered the critical factors when adopting an entrepreneurial mindset to either individuals or SME 

owners. An entrepreneurial mindset is at the core of what separates a successful entrepreneur to a not 

successful one (Lynch and Corbett, 2021). 

 It is also recognised as a first step in gaining attention when introducing entrepreneurship to individuals 

(Kouakou et al, 2019). At the crossroads of entrepreneurship and cognition the researched work has 

paved a clear way for the concept of entrepreneurial mindset to be developed (Lynch and Corbett, 

2021). It is necessary to recognize an entrepreneurial mindset as a factor that fosters the success of 

SMEs in South Africa (Ngek, 2012), because without it the business venture will fail (Dhliwayo and 

Vuuren, 2007). 

Research about entrepreneurship has revealed that there is a difference between how entrepreneurs and 

non-entrepreneurs think and understanding the difference will assist in building a well-grounded 

theoretical foundation in understanding the concept of entrepreneurial mindset (Lynch and Corbett, 

2021).  



   

 
 

9 

More research has revealed that the difference between a managerial mindset and an entrepreneurial 

mindset is the link to creating a sustained competitive advantage in businesses (Joshua, Corey, and 

Findley, 2021). Although there is no single characteristic that can be used to suggest success from the 

psychology of entrepreneurship perspective, InvestSW (2021) identified 8 characteristics that are 

common amongst the successful entrepreneurs they surveyed. They are as follows: 

• Curiosity - An entrepreneur should have an inquisitive mind. They are interested in finding out 

how the world thinks and how things come together. A curious mind is a great attribute to have 

as an entrepreneur as it will allow you to always see things from a fresh perspective.  

• Commitment - When the excitement of starting a new venture has died down, being committed 

to the journey will be a characteristic that will get you through the tough times.  

• Optimism - The ability to see a problem as a learning opportunity instead of a barrier to 

achieving your goals is an important characteristic to being a successful entrepreneur.  

• Flexibility - Entrepreneurship in its nature is a challenging space to be in, it is important that as 

an entrepreneur you are flexible in your way of thinking so that you can adapt to challenges you 

come across in the entrepreneurship journey.  

• Ownership - Refers to the ability to trust in your abilities as an entrepreneur to achieve success 

(locus of control).  

• Leadership - Being an effective leader as an entrepreneur involves sharing your vision to your 

team in a way that inspires and empowers them and being able to lean on them for support.  

• Connection - Investing in relationships/networks is linked to what makes a successful 

entrepreneur. As the famous saying goes, “no man is an island.”  

• Self-respect - It is important to take care of your body as much as you take care of your business, 

your body is your bigger investment as it allows you to be the best entrepreneur/leader for your 

business.  

An economy that seeks to grow and be sustainable requires an active youth who is willing and able to 

participate in entrepreneurial ventures (Kouakou, et al, 2019).  



   

 
 

10 

Being an entrepreneur involves identifying opportunities that other people cannot see and exploiting 

them for economic and monetary gains (Venter and Urban, 2015). This means that an entrepreneur 

requires to have a particular mindset, that will enable them to be innovative, proactive and risk inclined. 

Joshua, Corey, and Findley (2021) note that even with the fast-growing interest in entrepreneurship 

around the world, there is no “magic recipe” for entrepreneurship success, however, it is important that 

business owners invest in themselves so that they can cultivate the mindset that is associated with being 

a successful entrepreneur.  

Table 2.2.1 explores the different definitions that have been used to define entrepreneurial mindset in 

previous literature offerings.  

Author(s) Definitions 

Kouakou, Li, Akolgo, 

Tchamekwen. (2019) 

The propensity to learn, discover, evaluate, and exploit entrepreneurial 

opportunities 

Reed and Stoltz (2011) A state of mind that an individual has, that allows him to identify, develop 

and exploit opportunities where other people do not see 

Haynie, Shepard, 

Mosakowski and Earley, 

(2010) 

An individual’s ability to predict, act and respond rapidly under 

unpredictable conditions can be referred to as an entrepreneurial mindset 

Borchers and Park. 

(2010) 

An entrepreneurial mindset can be defined by focusing on two factors, self-

efficiency which details the perception one has on his strengths to complete 

a task and locus of control which details the perception one’s internal or 

external forces has on their success 

Neneh (2011) An entrepreneurial mindset refers to a way of thinking about business 

opportunities capturing the benefits of uncertainty 

Table 2.2.1 - Prior definition(s) of entrepreneurial mindset 

 



   

 
 

11 

Fernhaber and Bosman (2018) discuss a “habitual entrepreneur”. The authors note that a way to 

recognize that someone has embraced the entrepreneurial mindset is when they start acting and 

thinking like a habitual entrepreneur. A habitual entrepreneur is someone who makes a career out of 

starting businesses (Fernhaber and Bosman, 2018). Lindah (2017) interestingly notes that for a person 

to have an entrepreneurial mindset, they do not have to own a business and Fernhaber and Bosman 

(2018) agree with these sentiments by reiterating that the conversation about entrepreneurial mindset 

is not only about starting businesses or to start behaving or thinking like entrepreneurs, but to adopt 

the mindset so often that it becomes a norm in one's life.  

Dweck’s theory of mindset is built under making the distinction of a fixed and growth mindset, which 

further suggests that an entrepreneur should have a growth orientated mindset (Kouakou et al, 2019).  

2.3 THEORY OF MINDSET 
 

In understanding what the mindset means, Dwerk (2019) proposes two types of mindsets. The 

growth/incremental mindset or the fixed/entity mindset. In the framework of the distinction of the types 

of mindsets, Dweck (2019) states that an individual cannot adopt both the fixed and growth mindset, it 

is either one of the other (Kouakou, et al, 2019). The mindset theory was developed to understand why 

some people care more about proving their ability (fixed mindset) while others care more about 

improving their abilities (growth mindset) (Burgoyne et al., 2020).  

2.3.1 FIXED MINDSET	
 

A fixed mindset is described as that of a person who believes that their beliefs or perceptions cannot 

change, they are set in stone (Dwerk, 2015) and this mindset creates an urgency in people to want to 

prove their abilities repeatedly (Burgoyne et al., 2020).  

Having a fixed mindset makes people afraid of dealing with challenges that might eventually reveal 

their deficiencies (Dwerk, 2015). Individuals who believe that intelligence and talent are 

predetermined, and permanent traits are classified as custodians of the fixed mindset (Hammond,2021), 

this means that people with this mindset believe that a person's abilities are based on their talents and 

not the effort of investing in skills developments programs through learning (Neneh, 2011). 

 Neneh (2011) further explains that the consequence of being a custodian of this mindset is that in the 

face of setback and challenges these individuals are most likely to give up.   



   

 
 

12 

A person with a fixed mindset is one that is afraid of criticism from others and exposing their ideas 

because other people might think they are not smart enough (Dwerk, 2015). Kouakou, et al, (2019) note 

that it is imperative to instill an entrepreneurial mindset to people in their youthful age, this gives them 

an opportunity to develop skills that will equip them on how to overcome entrepreneurial challenges 

when they get into it. Individuals with a fixed mindset tend to set for themselves low performance goals 

because of the low confidence they have in themselves which is caused by believing that talents and 

intelligence cannot be changed or influenced to grow (Neneh, 2012). The mindset is at the core of 

people's decision making and beliefs, it is therefore important to acknowledge how one views 

themselves impacts how they decide to lead their lives (Burgoyne et al., 2020) 

People with a fixed mindset believe that if you work hard, it means you are not capable of the task at 

hand, they believe that things should come naturally, this proves how talented and intelligent you are 

(Dwerk, 2008). Dwerk (2008) further explains the setbacks of this mindset as a crippling belief because 

this means that they believe that if something requires effort and looks challenging, they will perceive 

it as a threat and a bind.  

A person who is praised for how smart they are is being groomed to be a fixed mindset custodian 

(Dwerk, 2008), because when they face challenges, and their results are not good they lose their 

confidence and will give up because they are not smart enough and they cannot influence how talented 

or intelligent they are (Dwerk, 2008).  

 

Figure 2.3.1 depicts the differences between the mindsets (Dwerk, 2015) 
 
(This image is copied in terms of section 12 of the current South African copyright act 98 of 1978) 
 
 
 
 



   

 
 

13 

2.3.2 GROWTH MINDSET	
 

Contrary to the fixed mindset, the growth mindset, is described as that of a person who believes that 

their beliefs and perceptions can change through their efforts in wanting to be more successful (Dwerk, 

2015). An individual with a growth mindset is a person who is confident in their ideas and looks at 

failure as an opportunity to learn rather than an end to a journey (Dwerk, 2015) they pursue challenges 

and do not give up when faced with setbacks (Burgoyne et al,. 2020).  

They believe that intelligence is a trait that can grow and be taught (Hammond, 2021). The intelligence 

mindset refers to one's beliefs that intelligence is either can improve with effort (growth mindset) or is 

a stable trait (fixed mindset) (Dwerk, 2015).  

Individuals with this mindset embody perseverance and resilience as characteristics (Burgoyne et al,. 

2020). They are not embarrassed about asking for help when they need it (Neneh, 2012). Studies have 

confirmed a positive relationship between education and business success (Neneh, 2012), these results 

confirm the importance of SME owners or individuals to have growth mindsets because prioritizing 

skills development and goal achievement will maximize their profits and business owners and their 

cognitive abilities as individuals.  

Neneh (2012) states an interesting argument that since researchers about entrepreneurship have 

established it as a discipline that is important because of its contributions to the overall country's success 

(job creation, poverty alleviation etc.) and that it can be taught and people with a growth mindset can 

be identified by their inclination to prioritize learning and having learning goals (Burgoyne et al,. 2020) 

(Neneh, 2012).  

They embrace the journey of learning and failure as an opportunity to become better (Dwerk, 2015). If 

sustainable entrepreneurship educational programs are developed and taught to people at their early 

stages of life, a country can cultivate a generation with more of a growth mindset than a fixed mindset 

(Neneh, 2012).  

No two people are the same and no mindset is more correct than the other (Dwerk, 2015) but for an 

entrepreneur to be successful it is important to adopt a growth mindset which means they are more open 

to learning and are not discouraged by failure (Kouakou et al,. 2019).  



   

 
 

14 

Neneh (2012) reiterates this point by explaining that this can be seen from the successful entrepreneurs 

who have built their businesses through all the challenges and that constant changes they faced without 

giving up. 

 

Figure 2.3.2 - 5 strategies to shift from fixed mindset to growth mindset 

(This image is copied in terms of section 12 of the current South African copyright act 98 of 1978) 
 

Bansal (2020) discusses 5 effective strategies to help entrepreneurs shit from the fixed mindset to the 

growth mindset as depicted in figure 2.3.2 above.  

Choose to tell yourself a different story – Actions are manifestations of what beliefs people hold. It 

is important that when an entrepreneur encounters a difficult situation change the mindset from “I am 

not good at this” to “I can do it.”  

Set learning goals as opposed to performance goals – Entrepreneurs should commit their efforts to 

continuous learning rather than seeking to prove to their competitors who is better. Kunene (2008) 

reiterates this by pointing out that entrepreneurs who have a growth mindset will want to continuously 

learn and improve, they embrace challenges and preserve in the face of adversity.  

Capitalize on your failures – Entrepreneurs should embrace failures as an opportunity to learn rather 

than a setback. Dwerk (2019) characterises custodians of the growth mindset as those who learn from 

negative feedback to improve their products and services.  

Choose goldilocks tasks for continuous improvement – Goldilocks tasks are tasks that are neither 

too easy nor too difficult, they are they right amount of “out of your comfort zone” to push an individual 

to continuous improvement.  



   

 
 

15 

Be consistent and flexible – With the absence of consistency and flexibility in an entrepreneurial 

journey, an entrepreneur will find it difficult to develop a growth mindset. A growth mindset is 

something that develops overtime through effort and learning (Dwerk, 2015).  

2.4 SMALL AND MEDIUM ENTERPRISES SUCCESS	
 

According to the National Small Enteprises act 102 of 1996, an SME in South Africa is defined under 

4 categories which are the annual turnover of the business, the number of full-time employees, the 

sector the business operates in and the total gross asset value. A business that has less than 250 

permanent employees and has an annual turnover of less than 220 million can be classified as an SME 

in South Africa, considering they operate in one of the following sectors: agriculture, mining, 

manufacturing, electricity/gas and water, construction, retail, wholesale, catering/accommodation, 

transport/storage, finance/business service and community, social/ personal services (Republic of South 

Africa, 1996).  

Kunene (2008) differentiates between exogeneous factors and endogenous factors when discussing 

factors that influence SME success. Exogenous factors refer to the external influences that may pose 

as restrictions or accelerators of businesses more especially in their infancy stage, some examples 

include socio-demographic factors, political factors, technological factors, and economic factors 

(Kunene, 2008). Economic factors such as inflation, interest rates and bureaucracy have an external 

influence on the success of an SME (OECD, 2017). It affects the performance of the businesses through 

its net profits/turnovers and even their return on investments (Kunene, 2008).  

In a report from OECD (2021) the authors narrate about how the global pandemic that happened in 

2020 (Covid-19) affected everyone but had a longer lasting impact on the SMEs as they had 

experienced significant declines in revenue due to the restrictions the pandemic required. This is an 

example of the external factors influencing the success/failure of SMEs.  

Endogenous factors are the internal factors that may pose as barriers or facilitators of growth for the 

businesses, some examples include availability of resources, the entrepreneurs' skills, and abilities 

(Kunene, 2008). An entrepreneur's ability to recognise opportunities where others cannot is a skill set 

that can set a business apart from its competitors (Venter and Urban, 2015). An entrepreneur's values, 

attitudes and traits can be classified as the most influential or crucial factors that contribute to SME 

performance and its competitiveness (Kunene, 2008).  



   

 
 

16 

Dwerk (2015) advocates for entrepreneurs to adopt or develop a growth mindset as it will cultivate the 

love for learning and at attitude of resilience to achieve remarkable results. 

There are groups of people that see entrepreneurship negatively and do not strive to be entrepreneurs, 

they can even go as far as classifying entrepreneurship as the cause of everything that is going wrong 

in society (Taatila and Down, 2012). To separate entrepreneurs from non-entrepreneurs based on the 

different mindsets it is important to have a good understanding of the entrepreneurial orientation of the 

study population. This will help in understanding whether they have the mindset and intentions that 

favour a successful entrepreneurial career (Taatila and Down, 2012). Dwerk (2008) developed a 

mindset quiz that is used to understand what influences the mindset of people and where they can be 

classified (growth of fixed mindset), this mindset quiz was adopted as part of the research instrument 

for this research study. 

SME success in South Africa can be measured with some of these factors as discussed by Rodrigues, 

Franco, Silva and Oliveira (2021) namely; strategic planning which will lead to an increased 

competitive advantage for the business, Competent management capacity, Entrepreneurial and an 

innovation spirit which will help the entrepreneur be proactive and have a visionary attitude, Forms of 

finance, networks and partnerships which will increase the foot print of the business from a more local 

one to an international one. Research shows that SME’s that that geared towards success need to 

embody the above-mentioned factors as they are drivers to sustainable growth and competitive 

advantage (Rodrigues et al, 2021), (Kunene, 2008), (Neneh, 2012).  

2.5 THE EXTENT A FIXED MINDSET HAS ON THE SUCCESS OF SMEs 
 

Dwerk (2006) makes an illustration to explain the mindset theory and uses the mindset of a baby. The 

resilience and perseverance they exhibit when they are learning how to walk and talk, they never quit 

and say this is just not for me. As children grow older and can evaluate themselves, they can start being 

self-cautious and become afraid of challenges and Dwerk (2006) describes this mindset as the fixed 

mindset.  

 

 



   

 
 

17 

Part of Kunene’s (2008) work describes the importance of having strong characteristics as an 

entrepreneur to set your business up for success, as they have a direct influence. People with a fixed 

mindset achieve limited or no success because of their approach to challenges (Limeri, Carter, Choe, 

Harper, Martin, Benton, and Dolan, 2020) 

Managerial skills, limited financial knowledge and technology capabilities are some of the internal 

factors that can affect the success of an SME in South Africa (Sitharam and Hoque, 2016). An 

entrepreneur with limited managerial experience, education, and start-up experience can negatively 

affect the success of the SME (Sitharam and Hoque, 2016). Intelligence and talent are things that you 

must continually work on, it is not given to you (Dwerk, 2006). An entrepreneur with limited financial 

knowledge (Sitharam and Hoque, 2016) and is afraid of criticism, failure and of exposing their ideas to 

others (Kouakou, et al, 2019) poses as a threat to the success of the SME’s because they will fail to 

recognise the entrepreneurial opportunities that will make their business a success compared to their 

competitors (Venter and Urban 2015).  

An entrepreneur who does not want to try new and innovative ways of doing things, refuses to take up 

new challenges in spaces they are not familiar with and does not dream big about how to grow the 

businesses is a custodian of a fixed mindset (Bansal, 2020).  

In an article by (Limeri, et al, 2020) the factors influencing the mindset are researched and the results 

show that from as early as primary school teacher and parents set the tone for a specific mindset based 

on how they communicate with the children. A person that is praised for their intelligence capacity is 

being groomed to be a holder of the fixed mindset because they will believe that success is limited to 

what they should know naturally unlike a person who is praised for their efforts who is then being 

groomed for a growth mindset as they will understand that more effort/hard work implies success. 

Bansal (2020) summarised the characteristics of a fixed mindset custodian: 

• Avoids challenges. 

• Runs from error. 

• Gives up easily. 

• Feels threatened by the success of others. 



   

 
 

18 

• Avoids new experiences with the fear of failure. 

• Ignores negative feedback. 

Hypothesis 1: A fixed mindset has a negative influence on the success of SME’s run by the youth from 

a previously disadvantaged area, Mafikeng 

 

2.5 THE EXTENT A GROWTH MINDSET HAVE ON THE SUCCESS OF SMEs 
 
Organisations that grow compared to the ones that remain steady at being simply good/average are 

attributed to leaders that are curious, leaders that confront failure head-on while hoping that they will 

succeed in the end (Dwerk, 2016). These types of leaders are described as the ones that have the growth 

mindset (Dwerk, 2016). They believe in human growth (Dwerk, 2016). They do not take pleasure in 

making other people feel less powerful or constantly trying to prove that they are better than other 

people (Dwerk, 2016).  

Like the fixed mindset, strong internal entrepreneurial characteristics have a direct influence on the 

success of the SME. With the growth mindset they will have a positive influence.  

Education, skills training, good leadership, and managerial skills are some of the factors identified that 

have an internal influence on the success of the SMEs in South Africa (Lekhyana, 2015). Every 

business is made up of functional departments and it is critical for an entrepreneur to have the skills 

necessary for these functions to operate (Lekhyana, 2015).  

Entrepreneurs from previously disadvantaged areas with poor education quality will often see this 

challenge as an opportunity to upskill (Dwerk, 2016) instead of thinking that they already know enough 

about running a business or outsourcing the skills (Lekhyana, 2015). Being smart is not about being 

perfect, it is about learning something overtime and making progress at it (Dwerk, 2016).  

A person's mindset can predict performance after a setback, such that a person with a growth mindset 

will perform better after failure compared to a person with a fixed mindset (Burgoyne,. 2020). 

Entrepreneurs who have a growth mindset will want to continuously learn and improve, they embrace 

challenges and preserve in the face of adversity, learn from negative feedback, and improve their 

products or services from them (Kunene, 2008).  



   

 
 

19 

In contrast, an entrepreneur with a fixed mindset will avoid challenges and give up easily when they 

are faced with challenges in their businesses, they have a negative reaction to criticism about their work 

and will consider efforts as not important (Dwerk, 2015). Entrepreneur’s motivation and desire to learn 

are affected by their attitudes and effort (Dwerk, 2015). The attitude of an entrepreneur towards a 

difficult and challenging business deal can explain the belief the entrepreneur has about the nature of 

intelligence (propositions) (Kunene, 2008).  

People with a growth mindset think of their talents and intelligence as things that can develop over time 

through effort, consistency, learning, risk-taking etc. (Dwerk, 2015). Every successful entrepreneur has 

a story of how they could not just rely on their talents to succeed in their businesses – Theo Baloyi, a 

young South African entrepreneur who grew up in a previously disadvantaged area launched a 

successful sneaker brand (BATHU) in 2015, has been admired for his perseverance, hard work and 

willingness to always learn (Oberholzer, 2020). It is true that no one has the same potential as the next 

person, there could be only one Steve Jobs, but Steve Jobs would not be who he was if he believed that 

his intelligence and talents are set on stone and cannot change (Dwerk, 2015). Vukuzenzele (2019) 

writes about Portia Mngomezulu who is a South African business owner of a brand called Portia M 

cosmetics, she is characterised as an entrepreneur who has a high inclination of risk and is not afraid of 

change or failure and this shows in her owning successful a multi-million-rand business. 

Hypothesis 2: A growth mindset has a positive influence on the success of SMEs run by the youth 

from a previously disadvantaged area, Mafikeng.  

2.6 SUMMARY OF CHAPTER	
 

This chapter explored the key constructs of the study which are Entrepreneurial mindset and SME 

success. Entrepreneurial mindset was discussed under the theory of mindset developed by Carol Dwerk 

where she talks about the two types of mindsets that people can have, the fixed and growth mindset. 

SMEs were defined according to the South African definitions and SME success was distinguished by 

two that that can influence the success of the business, either endogenous (internal) or exogeneous 

(external) factors.  

The chapter then discussed the research questions, and the hypothesis were developed for both. It was 

important for the research to discuss the research questions to give context on how the key constructs 

support the research objectives for this study.  



   

 
 

20 

CHAPTER 3 – RESEARCH METHODOLOGY	
 

3.1 INTRODUCTION 
 

This chapter will discuss the methodological approach that was taken in this research process. The 

chapter will begin by detailing the research approach and design, then discuss the population and 

sample used of study. The data collection and analysis process, the research instruments will then be 

discussed as they form part of the key methodological concepts. To end the chapter the validity and 

reliability of the research instrument will be discussed. 

3.2 RESEARCH PARADIGM 
 

A research worldview can be defined as a set of common beliefs and agreements between researchers 

about how they believe problems should be addressed or understood (Kuhn, 1970). This research study 

will adopt the positivism research worldview. It is suitable because the studies done through this 

approach are governed by research questions and hypothesis to be able to test a theory based on the 

variables of the study (Grover, 2015). It is popular with quantitative studies (Galawe-Msimango, 2017). 

One the principles that guide this worldview is the research objectivity, the researcher intervention 

should be objective, from data collection to data analysis (Grover, 2015).  

3.3  RESEARCH APPROACH 
 

Methodology refers to the methods, processes, designs, and approaches that will be used to find out 

something in an organized and formal research/investigation (Kivunja and Kuyini, 2017). A research 

approach in a research paper addresses the questions of how the researcher will systematically design 

their study to provide valid and reliable results that address the research questions and objectives 

(Jansen and Waren, 2020).  

A research approach will include hypothesis made about the investigation, the challenges encountered 

and how the researcher addressed them or minimized them (Kivunja and Kuyini, 2017). 

There are different approaches a researcher can adopt to articulate the logic and flow followed in 

addressing the research questions and objectives.  



   

 
 

21 

Quantitative, qualitative, and mixed methods are the different types as discussed by Jansen and Waren 

(2020). This study will be guided by the quantitative research methodology approach.  

This approach is the appropriate fit for the study because it assumes that the variables of the study can 

be known and measured, the researcher is detached from the variables of study (Perera, 2018), which 

means they are low changes of influencing the research results. 

3.4 RESEARCH DESIGN 
 
According to Akhtar (2016) a research design is the “glue” that holds the elements of the research 

project together through a structure. A research design structure should highlight the blueprint of the 

data collection process, the measurement instrument, and the analysis of the data (Akhtar, 2016). Brou 

(2018) also defines a research design as an overall plan that connects the research questions and 

problems to the research project. A poorly executed research design compromises the entire research 

project (Pawar, 2020).  

A quantitative research method was used to investigate the research objectives of this study. A 

quantitative approach is used for studies that have measurable variables, want to test hypothesis or the 

effectiveness of a program or product (Scibbr, 2021). A quantitative study is one that refers to an 

empirical investigation of data and their relationship (Pawar, 2020). Therefore, primary data was used 

on this research project. Pawar (2020) identifies 4 types of research designs a researcher can choose 

from based on the objectives of the research study: experimental, exploratory, descriptive design and 

cross-sectional design.  

A cross sectional research design was adopted for this study, it is an observational research design that 

analyses data that was collected during a given period of time across a defined sample population (Bell, 

2009). Cross sectional designs are generally quick to conduct, all variables of the study can be 

researched at the same time, and it is suitable for descriptive studies (Bell, 2009).  

A self-administered online survey was used to collect data for this research study. Online surveys are 

commonly used by researchers to collect data they allow data to be collected over short spaces on time 

and they are low costs to manage (Mudavath and Narayan, 2019). However, the challenges of using an 

online survey include poor responses rates, maintenance of respondent's confidentiality and ethical 

issues (Mudavath and Narayan, 2019).  



   

 
 

22 

To manage the response of the survey the researcher was able to continually monitor the responses 

through the online software program – Qualtrics by checking the response rate. Online surveys give the 

researcher flexibility in terms of pausing, starting, and ending the survey when they want (Mudavath 

and Narayan, 2019). To address the ethical concerns that come along with using an online survey the 

researcher ensured that all respondents give consent before proceeding with the survey and the ethical 

certificate was issued to the researcher by the Wits ethics committee before the data collection process 

commenced.  

Finally, the researcher assured the respondents that all their information will be kept confidential and 

only used for the purposes of this research.  

3.5 POPULATION  
 

A population is defined as the group of all the units on which the findings of the research are applied 

(Shukla, 2020).  

There are 4 types of population groups highlighted by Shukla (2020), the first group is finite and infinite 

population which includes numbers that can be counted (number of people) and numbers that cannot 

be counted (number of stars in the sky) respectively. The second group is homogeneous and 

heterogeneous population they are classified when the units of the population are similar in 

characteristics, they are considered homogeneous and when the units of the population are completely 

different, they are classified as heterogeneous.  

The third group is an existent and hypothetical population, a population that has a physical existence is 

the existent population and on the other hand the population that does not have a physical existence is 

considered a hypothetical population. The last group is called the known and unknown population, 

which is classified under the parameters of the population being known of now. Parameters refer to the 

statistical measurement taken from the data from the entire population.  

In the classifications for the different types of population groups by Shukla (2020), the population group 

that will be adopted for this research study is the existent population because the age group, location 

and gender of the respondents was part of the data that was collected in the data collection process. 

This data was important to the study because it helped the researcher produce data analysis of 

characteristics of the respondents.  



   

 
 

23 

The research population included South African youth who are owners of SMEs located in the 

previously disadvantaged areas of Mafikeng. According to Stats SA (2021), the youth in South Africa 

includes people between the age group of 18-35 years. SMEs in South Africa comprises of informal 

and informal businesses, businesses that operate from home-based offices and from office-based offices 

(Ramukumba,2014). This research included all types of SMEs in South Africa.  

3.6 SAMPLING METHOD AND SAMPLE SIZE 
 

Sampling is known as the process of measuring the characteristics of the study population by analyzing 

a portion or part of the population group (Bhatt, 2020). The number of people in a sample is called the 

sample size (Bhatt, 2020). 

3.6.1 SAMPLING METHOD 
 

The sample for this study was drawn from the youth that resides in the previously disadvantaged areas 

of Mafikeng, as it was the location of study for this study. The respondents were reached through social 

media platforms (WhatsApp, LinkedIn, Facebook groups) and word of mouth. This selection criteria 

were effective because the study was focused on the youth and the youth spend most of their time on 

social media or on their phones.  

For the study, the respondents can be established entrepreneurs or start-up entrepreneurs to participate 

in the study. The respondents need to be residing in Mafikeng falling within the youth age group as 

defined by Stats SA. Convenience sampling was used for this study because of its uncomplicated, 

inexpensive, and non-time-consuming nature. Convenience sampling is a data sampling method that 

researchers use to collect data from a pool of “conveniently” available participants (Lavrakas, 2008). 

3.6.2 SAMPLE SIZE 
 

Sample size is term in research used to describe the number of individuals included in the study to 

represent the population (Kibuacha, 2021). Quantitative studies require numerical data to be collected 

so that the researcher can be able to perform statistical tests to provide an analysis about the relationship 

between the variables of the study (Casteel and Bridier, 2021), therefore sufficient data should be 

collected for the analysis to be considered good.  



   

 
 

24 

It is important to collect an adequate sample size because if the sample is too small the study will not 

yield valid results because it is not an accurate reflection of the populations realities while to a sample 

size that is too big may cater for representation it however increases the time and cost taken to conduct 

a study (Kibuacha, 2021).  

A total of 145 responses were received and 52 of those responses were viable for statistical analysis. 

Other responses were excluded due to missing data from the survey, respondents not being SME owners 

and not residing in Mafikeng. To test if the sample size for the study was adequate the sampling 

adequacy analysis (Barlett and KMO) was done, which revealed that the KMO range of the sample size 

was between 0,7 and 0,8 of which according to Fields (2013) is considered good on the KMO Measure 

of sampling adequacy. 

3.7 RESEARCH INSTRUMENT 
 

This section describes the measuring instruments that were used in the study based on the way in which 

the theoretical constructs were operationalised. 

The research instrument of this research was adopted from the Mindset quiz by Carol Dwerk. It was 

then designed and distributed through an online software application – Qualtrics to suit the objectives 

of this study. The research instrument that was used in this study was a self-administered online survey. 

This type of survey is one that allows respondents to complete the survey in the absence of the 

researcher (Formplus, 2021). It eliminates the respondents' answers being biased/influenced by the 

presence of the researcher and it is simple to administer it also allows for a wider geographical reach 

(Formplus, 2021). A 7-point Likert scale will be used to measure the variables from total strongly 

disagree to strongly agree.  

For online distributed and unsupervised surveys, a 7-point Likert scale survey is to be used because it 

provides a more accurate measure of the response's evaluation of the questions (Finstad, 2010). 

The survey was designed with 6 blocks. The blocks made the survey appear neat and easy to follow. 

Block A was the introduction where the researcher introduced themselves, stated the purpose of the 

survey and assured the respondents of the confidentiality of the survey. Lastly the researcher requested 

the respondents to give consent to continue with the survey.  



   

 
 

25 

Block B was the demographics section where the researcher got to know respondents with some open-

ended questions. Block C and D was the business characteristics and business growth and performance 

section where the researcher got an understanding of the business profiles of the respondents. These 

blocks were used to operationalize the SME success variable of the study. Block E and F was the 

entrepreneurial mindset section where the researcher got an understanding of the type of mindset the 

respondents have. These blocks were used to operationalize the entrepreneurial mindset variable of the 

study. Dwerk (2006) in her mindset quiz divided the sections into talent and intelligence covering both 

types of mindsets (growth and fixed) which is how the researcher divided them for this study. The table 

below depicts the research instrument in a tabular format.  

High level 
factors 

Constructs Block Question 
number  

Variables 

Introduction  A Q1.1  

Demographics Individual and 
business 

B Q2.1 - Q2.4  

SME Success Business 
Characteristics 
 
Business growth 
and performance 

C 
 
 
D 

Q3.1 
 
 
Q4.1 

 
 
Dependent 
variable  

Entrepreneurial 
mindset 

Intelligence - 
Fixed mindset 
and growth 
 
 
Talent - Fixed 
mindset and 
growth 

E 
 
 
 
 
F 

Q5.1 
 
 
 
 
Q6.1 

 
Independent 
variable 

Table 3.7.1: Research Instrument 

 

 

 

 



   

 
 

26 

3.8 PROCEDURE FOR DATA COLLECTION  
 

Surveys are an ideal method of data collection when the researcher wants quick feedback that is easy 

to understand and analyse (Chipeta, 2020). This research study used quantitative research methodology. 

Qualtrics – an online software program was used to design, distribute, and summarize the survey.  

The data collection process ran from the 19th of December 2021 until the 11th of February 2022. Online 

surveys are most effective when the researcher wants to reach a wide range of people in a short period 

of time (Chipeta, 2020).  

The survey link was distributed on social media platforms including WhatsApp, Facebook, and 

LinkedIn. However, the method that contributed to the most responses was word of mouth – when a 

friend recommended someone who can complete the survey there was more chances of the respondent 

completing the survey. A total of 145 responses were completed and 1 response remained incomplete 

at the time the survey was closed.  

Chipeta (2020), noted that a survey that is not designed effectively will have an impact on the quality 

of the responses. The researcher experienced this when the survey had incomplete responses and the 

error messages received from the survey was that some questions could not be displayed to the 

respondents.  

3.9 DATA ANALYSIS AND INTERPRETATION APPROACH 
 

This section will focus on the data cleaning process and statistical tests the researcher took in preparing 

the data to be analysed.  

3.9.1 DATA CLEANING PROCESS 
 

Data cleaning is defined by Chapman (2005) as a process used to determine inaccuracies, 

incompleteness, and inconsistencies, then improving through correction of error and omissions. The 

process of data cleaning can be considered an important part of preparing data for analysis (Salkind, 

2010). When the data collection process was concluded, the raw data was exported from SPSS and then 

the data analysis process could begin. It began by removing all the unwanted or unnecessary columns 

and lines from the data set, changed the measure type for the variables to make them measurable and 

removing incomplete responses.  



   

 
 

27 

Incomplete responses are a common problem with using surveys as respondents could find the survey 

too long, or not even consent to participate or not understanding the survey at all (Fields, 2013).  

The survey had reverse questions (mentioned below) and the researcher reversed the coding to suit the 

other questions.  

Questions that were reverse coded: Q5.1_3, Q5.1_5, Q5.1_7, Q5.1_8, Q6.1_3, 
Q6.1_5, Q6.1_7 and Q6.1_8 

Table 3.9.1: Reverse questions 

After all the responses of participants who did not meet the study’s criteria was removed, a total of 75 

responses remained which was used for further analysis. 

3.9.2 DATA ANALYSIS 
 

To analyse the data collected for this study, there are 2 methods available for quantitative studies – 

descriptive and inferential statistics.  

Descriptive statistics – is used to give the details of the sample of the study (Jasen and Warren, 2020). 

They form part of the first critical test in analysing data for research (Vikas, 2018). The statistical tests 

that are done in this type of tests include: mean, mode, standard deviation, skewness etc. They are 

important because they can provide the bigger picture and the finer details of the sample data (Jasen 

and Warren, 2020). Descriptive statistics needs to happen first before inferential statistic (Vikas, 2018) 

because they help to inform which inferential statistical tests can be used (Jasen and Warren, 2020). 

Inferential statistics – is used to give predictions about the populations of the study (Jasen and Warren, 

2020). The main objective of this study is to make predictions on the extent an entrepreneurial mindset 

has on the success of SMEs from Mafikeng. Inferential statistics is commonly used for research studies 

that have a hypothesis to test (Vikas, 2018). The results of the tests allow the researcher to link the 

objectives of the study to what the data collected predicted about the real-world population (Jasen and 

Warren, 2020).  Correlation analysis assess the relationship between the two variables and lastly the 

regression analysis which assess the cause and effect between the variables (Jasen and Warren, 2020).  

 



   

 
 

28 

3.10 VALIDITY AND RELIABILITY OF RESEARCH 
 

When evaluating a research instrument, validity and reliability testing are the two most fundamental 

features a researcher can use (Mohajan, 2017). Validity testing is about what the research instrument 

measures and how well it can do that while reliability testing is concerned about the extent to which a 

research instrument controls for random error (Mohajan, 2017). In this section the validity, reliability, 

and threats to them are reviewed.  

3.10.1 VALIDITY TESTING 

 

Validity refers to the level in which the results of the instrument are truthful, the degree to which an 

instrument measures what it was set out to measure (Mohajan, 2017). Appropriate interpretation of the 

data obtained from the analysis is how validity can be determined (Sürücü & Maşlakçı, 2020). An 

instrument needs to be reliable to be valid, but it can fail the validity test while being reliable (Mohajan, 

2017). It is, therefore, imperative that the research instrument measures the constructs of the study 

correctly.  

For this study, the Exploratory Factor Analysis (EFA) was used to test for validity. The main objective 

of the EFA test is to examine how the data is distributed (Matthieu, Dominic, Justin, Crutain, Yves, 

2016).  

3.10.2 RELIABILITY TESTING 
 

Reliability is when a research instrument can be depended on to product consistent results after being 

used repeatedly in different circumstances but identical situations (Galawe-Msimango, 2017). 

According to Mohajan (2017), reliability refers to the trustworthiness, the consistency and precision a 

of a research instrument. The above definition(s) of reliability fits this study’s methodology as Mohajan 

(2017) stated, in a quantitative study reliability refers to the stability and repeatability of the results 

obtained from the instrument.  

There are elements in a research instrument dataset that can pose as threats to the reliability. In the 

below section the research discusses how these threats were addressed for this study.  

 



   

 
 

29 

Treats to reliability 

There are many components that can pose as threats to the reliability of a study, as a result researchers 

should take measures to reduce impact they can have on the study. Reliability threats can never be 

completely eliminated, in the below section the different threats are discussed and how the researcher 

minimized their impact.  

Conceptual/theoretical bias  

It is a threat that arises when the researchers do not align the theoretical framework with the hypothesis 

of the study (Sürücü & Maşlakçı, 2020). In this study theoretical bias was minimized because the 

researcher thoroughly analyzed the literature and developed the hypothesis of the study that 

complimented the research instrument and literature obtained.  

Sample bias  

Can be a threat to the reliability of the study when the sample group in the research is not a 

representative of the population (Sürücü & Maşlakçı, 2020). In this study the sample bias threat was 

avoided because the researcher clearly defined the parameters the sample and population groups 

therefore responses not falling within those parameters were not included in the data analyses process.  

Data processing threat  

Refers to the way the researcher handled the data set from data collection to data analyses (Galawe-

Msimango, 2017). The was a low chance of this being a reliability threat to this study because the data 

was administered through online software's. Data collection was done through Qualtrics, and data 

analysis was done through SPSS and Excel. Therefore, there was minimal chances of human error due 

to the lack of direct handling of the data (Galawe-Msimango, 2017). 

Reverse questions  

Refers to when some of the questions on the instrument have a positive expressions and others have a 

negative expression. These kinds of questions can be used to increase the reliability of the instrument 

because of the idea that they test the engagement of the respondents (Sürücü & Maşlakçı, 2020). In this 

study the instrument had reserve questions to aid with making the results more reliable.  

 



   

 
 

30 

Types of reliability  

Reliability testing can be done in different ways, this section discusses the types of reliability testing, 

but will describe internal consistency reliability as this was the method used to test the reliability of this 

study.  

Internal consistency reliability  

Mohajan (2017) describes this test as an examination of whether the items within a scale are 

homogeneous or not. The most common way to test for internal consistency is using the Cronbach 

alpha (α) method because of its ease to interpret (Fields, 2009). It is interpreted as the mean of all 

possible spilt half coefficients (Mohajan, 2017).  

3.10.3 THE CRONBACH ALPHA 
 

The Cronbach alpha was named by Lee Joseph Cronbach in 1951 (Mohajan, 2017). The alpha value 

usually ranges between 0 and 1, and as the number approaches 1 it is assumed that the internal 

consistency high. The Cronbach alpha tests the extent to which the items from the research instrument 

have high commonalities.  

Below is a tabulation of the classifications of the Cronbach alpha as generally accepted in literature as 

depicted by Mohajan (2017) 

Cronbach’s Alpha coefficient Interpretation of Cronbach’s Alpha coefficient 

> 0,9 The internal consistency of the scale is high 

0,7 < α < 0,9 The scale has internal consistency 

0,6 < α < 0,7 The internal consistency of the scale is acceptable 

0,5 < α < 0,6 The internal consistency of the scale is weak 

 α < 0,5 The scale has no internal consistency 

Table 3.10.3: The classification of Cronbach's alpha coefficient 

Despite the common literature classifications and interpretations of the Cronbach’s Alpha coefficient 

Sürücü & Maşlakçı (2020) express that a research instrument that shows an alpha of 0,95 and above is 

not always the correct approach to assuming data reliability.  



   

 
 

31 

They state that this high value shows that some of the expressions in the instrument could be measuring 

the same thing. They conclude their argument by stating that a Cronbach’s Alpha value of 0,7 and 

above is a good indicator of the internal consistency of the scale. 

3.11 CORRELATION ANALYSIS 
 

Correlation analysis is a common measure in quantitative studies that measures the movement between 

2 variables. It will measure, if one variable increase does the other one increase as well or if as one 

variable increases, does the other one decrease (Patrick, Christa and Lothar, 2018). Correlation 

coefficients are scales between –1 and +1, as the value approaches –1 it indicates perfect negative 

relationship between the variables, and as the value approaches +1 is it showing a positive relationship 

while the value 0 shows no linear relationship.  

3.12 REGRESSION ANALYSIS 
 

The regression analysis is one of the most important statistical methods as described by Skiera and 

Albers (2018), its main objective is to test the influence/extent the independent variables (Fixed mindset 

and Growth Mindset) of the study have on the dependent variable (SME success) to make predictions. 

The study had one dependent variable and 2 independent variables; therefore, the multiple linear 

regression model was used to predict the value of the dependent variable.  

3.13 ETHICAL CONSIDERATIONS 
 

Research studies that involve human respondents is more likely to encounter ethical dilemma’s 

including power differential and forming relationships with respondents, it is important that the 

researcher considers these dilemma’s before conducting the study.  

Participation 

The researcher did not engage with the respondents, and this ensured that there were no relationships 

formed that could have implicated the responses to be bias. 

In the introduction letter of the research instrument, the researcher detailed out that completing the 

survey is completely voluntary and respondents can choose to stop at any point in the survey. Each 

respondent had to give consent for their data to be used for the purposes of the study.  



   

 
 

32 

Ethical Clearance 

The researcher applied for ethical clearance from the University of the Witwatersrand, through the 

Ethics Committee. Only after the ethical clearance was granted in November 2021, the researcher 

embarked on the data collection process.  

Confidentiality  

In the cover letter of the research instrument, the respondents were ensured that the data will be used 

for the purposes of this study only and this information will be accessible to the researcher and their 

supervisor only. To ensure that the confidentiality of the data is kept, the researcher dealt with the data 

in average form (percentage, tables) and did not personalize the entries.  

 

3.14 CHAPTER SUMMARY 
 

This chapter discussed the research methodology adopted. The study was guided by the quantitative 

methodology with cross-sectional research design. The population group of the study was limited to 

the ages ranging from 18- 35 years. The sample of the study was open to both start-up and established 

entrepreneurs who reside in Mafikeng.  

A total of 145 responses were received and 75 of those were viable for statistical analysis which was 

done through an online software, SPSS. The research instrument adopted was the mindset quiz by Carol 

Dwerk which was a self-administered online survey measured through a 7-point Likert scale. The data 

was collected from 19 December 2021 until 11 February 2022.  

The data screening process included removing of unnecessary data, re-coding reverse questions, 

cleaning up incomplete responses and doing a missing value analysis. The reliability the validity of the 

research instrument was tested and were found reliable and valid. Correlation and regression analysis 

were also done for this study, the results are presented in the next chapter.  

 

 

 



   

 
 

33 

 CHAPTER 4 - PRESENTATION OF RESULTS 

	

4.1 INTRODUCTION 
 

The objective of this chapter is to present and describe the results obtained from this study. The chapter 

will start by presenting the demographic profiles of the respondents. These will be followed by the 

descriptive analysis of the data, exploratory factor analysis, reliability, validity, and correlations results. 

Finally, the hypotheses of the study will be tested, which will either be accepted or rejected as the 

researcher presented the results for the research questions of the study.  

4.2 RESPONDENTS CHARATERISTICS 
 

A total of 145 people responded to the survey. Due to some respondents not meeting the criteria of 

targeted respondents (e.g., not residing or from Mafikeng, not entrepreneurs and being out of the youth 

age group) as well as having a high proportion (> 10%) of missing data, they were excluded from 

further analysis. This resulted in a total sample of 75 respondents which the researcher proceeded with 

for further statistical testing for the study.  

4.3 DEMOGRAPHICS PROFILES OF RESPONDENTS 
 

In the section below the demographics results of the sample of the study will be presented. Included 

are gender, level of education, age distribution, business exposure and business experience.  

 
4.3.1 DISTRIBUTION BY GENDER 
 

The data collected presented that of the 75 respondents that responded to the survey, 53% indicated 

that they were male while 45% indicated that they were female, 1% preferred not to classify their what 

gender.  Figure 4.3.1 below presents these results in a pie chart.  



   

 
 

34 

 

Figure 4.3.1 Respondents gender distribution 

Source: Primary data 

 

4.3.2  LEVEL OF EDUCATION  
 

Figure 4.3.2 below, displays the respondents’ distribution with respect to their highest level of 

education. The majority 33,3% (25) of the respondents indicated that they had acquired a degree. Those 

with diplomas and honors constituted 22,7% and 24,0% respectively. Just over thirteen percent 

indicated that they had completed high school while 4% percent had acquired a masters’ degree. 

 

Figure 4.3.2 Respondents highest level of education 

Source: Primary data 

 

 

 

 



   

 
 

35 

4.3.3 AGE DISTRIBUTION  

The modal age group for this survey was the 25 – 34 age group. Almost 80% of the respondents were 

in this age group. The 18-24 age group had 20% of the respondents. This data is presented in a bar chart 

below in figure 4.3.3  

 

Figure 4.3.3 Respondents age distribution 

Source: Primary data 

 

4.3.4 OTHER DEMOGRAPHICS 
 

The majority (73,3%) of the respondents indicated that they had started 1 or 2 businesses before. The 

remainder (19%) had started 3 – 5 businesses before, this is presented in a pie chart below in figure 

4.3.4.  

 

Figure 4.3.4 Respondents business exposure distribution 

Source: Primary data 

 

 



   

 
 

36 

In addition, the majority (30,7%) of the respondents had been in business for 4 – 5 years. Approximately 

24% of the respondents were new (0 – 1 year) in business while about 6,7% each had been in business 

for 8 – 10 years and more than 10 years, respectively this data is presented in a bar graph below in 

figure 4.3.5. 

 

Figure 4.3.5 Respondents business experience distribution 

Source: Primary data 

 

4.4 DESCRIPTIVE ANALYSIS 
 

In the section below the descriptive data results of the study will be presented. Included is the 

descriptive analysis of the sample, and of the constructs.  

 

4.4.1 DESCRIPTIVE ANALYSIS OF SAMPLE	
 

To scale the age group, 1 was coded for the everyone under 18 years while 5 was coded for 45 – years 

and older. The sample of the study only included respondents aged between 18-35 years as they fall 

under the youth age group as defined by StatsSA, all respondents falling outside this range were not 

included in the data analysis. The business location variable was used for this descriptive analysis 

because location of the business was one of the important elements in the study, entrepreneurs had to 

be operating from the previously disadvantaged areas of Mafikeng. From the table below, the results 

present the mean for age group 2,80 and for business location 4,25.  



   

 
 

37 

The majority of the respondents were based in Motlhabeng and fell under the age group 24-35 years. 

The standard deviation of age is 0,403 while for business location is 2,563.  

 

Figure 4.4.1 Descriptive statistics 

Source: Primary data 

 

4.4.2 DESCRIPTIVE ANALYSIS OF CONSTRUCTS 
 

The section below shows the results of the analysis of the constructs to better understand the 

consistencies or inconsistencies of the respondents to the research questions. This study had 3 

constructs: SME success, Fixed mindset, and Growth Mindset. SME success was the dependent 

variable while the other two were the independent variables.  

4.4.2.1 SME SUCCESS 
 

This construct had 6 questions that aimed to establish the respondents' level of satisfaction on their 

businesses financial performance the results are presented below per question asked: 

Annual turnover 

The results revealed that the majority (28%) of the respondents were neither satisfied nor dissatisfied 

with their annual turnover or revenue. Twenty-five percent of the respondents were somewhat satisfied 

while a low 2% of them indicated being very satisfied and 5% were very dissatisfied with their annual 

turnover. The results are presented in table 4.4.2.1 

 

 

 



   

 
 

38 

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied  4 5.3 

Dissatisfied  7 9.3 

Somewhat dissatisfied  10 13.3 

Neither satisfied nor dissatisfied  21 28 

Somewhat satisfied  19 25.3 

Satisfied  12 16 

Strongly satisfied  2 2.7 

Table 4.4.2.1: Annual Turnover/Revenue Satisfaction Distribution (n=75) 

Source: Primary data 

 

Gross profit 

Table 4.4.2.2 shows that the majority 30% of the respondents were satisfied with their gross profit in 

the last 3 years. Just over 14% of the respondents indicated that they were somewhat satisfied while 

equal proportions of 13% were indifferent. Slightly below 10% of the respondents were somewhat 

dissatisfied with their gross profit while approximately 4% each were very dissatisfied.  

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied 3 4 

Dissatisfied 6 8 

Somewhat dissatisfied 10 9.3 

Neither satisfied nor dissatisfied 11 13.3 

Somewhat satisfied 23 14.7 

Satisfied 13 30.7 

Strongly satisfied 2 2.7 

Table 4.4.2.2: Gross Profit Satisfaction Distribution (n=75) 

Source: Primary data 

 

 



   

 
 

39 

Net profit margin 

Table 4.4.2.3 shows the distribution of the respondents’ level of satisfaction with respect to the net 

profit margin. Out of seventy-five respondents who indicated their levels of satisfaction, 25% were 

somewhat satisfied.  34% percent indicated that they were neither satisfied nor dissatisfied with their 

net profit margin while 12% were somewhat dissatisfied. Just over 13% indicated that they were 

satisfied. Six percent were dissatisfied while proportions of 5% and 2% were very dissatisfied or very 

satisfied, respectively.  

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied 4 5.3 

Dissatisfied 5 6.7 

Somewhat dissatisfied 9 12.0 

Neither satisfied nor 
dissatisfied 

26 34.7 

Somewhat satisfied 19 25.3 

Satisfied 10 13.3 

Strongly satisfied 2 2.7 

Table 4.4.2.3: Net Profit Margin Satisfaction Distribution (n=75) 

Source: Primary data 

 

Return on assets 

Table 4.4.2.4 shows the distribution of the respondents’ level of satisfaction with respect to the return 

on assets. Twenty-four percent (18) were somewhat satisfied.  Forty percent indicated that they were 

neither satisfied nor dissatisfied with their return on assets equal proportions of, 8% each were 

somewhat dissatisfied and dissatisfied. The least proportion (2%) indicated that they were very satisfied 

while 6,7% were very dissatisfied.  

 

 



   

 
 

40 

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied 5 6.7 

Dissatisfied 6 8.0 

Somewhat dissatisfied 6 8.0 

Neither satisfied nor dissatisfied 30 40.0 

Somewhat satisfied  18 24.0 

Satisfied 8 10.7 

Strongly satisfied 2 2.7 

Table 4.4.2.4: Return on assets satisfaction distribution (n=75) 

Source: Primary data 

 

Return on investment 

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied 6 4.0 

Dissatisfied 5 6.7 

Somewhat dissatisfied 5 6.7 

Neither satisfied nor dissatisfied 26 34.7 

Somewhat satisfied 15 20.0 

Satisfied 15 20.0 

Strongly satisfied 3 4.0 

Table 4.4.2.5: Return on investment distribution (n=75) 

Source: Primary data 

The above table 4.4.2.5 shows the distribution of the respondents’ level of satisfaction with respect to 

the return on investment. An equal proportion of the respondents indicated that they were somewhat 

satisfied and satisfied with their return on investment in the past 3 years.  



   

 
 

41 

 A majority of the respondents (34%) indicated that they were neither satisfied nor dissatisfied. Equal 

proportions of 20% each were either somewhat satisfied or satisfied, respectively. The least proportion 

(4%) indicated that they were very satisfied while 4% were very dissatisfied.  

Return on equity 

Level of agreement Frequency (n) Percentage (%) 

Strongly dissatisfied 4 5.3 

Dissatisfied 5 6.7 

Somewhat dissatisfied 7 9.3 

Neither satisfied nor dissatisfied 31 41.3 

Somewhat satisfied 15 20.0 

Satisfied 10 13.3 

Strongly satisfied 3 4.0 

Table 4.4.2.6: Return on equity distribution (n=75) 

Source: Primary data 

 

Table 4.4.2.6 above shows the distribution of the respondents’ level of satisfaction with respect to the 

return on equity. 41% were neither satisfied nor dissatisfied.  Twenty percent indicated that they were 

somewhat satisfied while 13% were satisfied and 9% somewhat dissatisfied. Six percent indicated that 

they were dissatisfied.  The least proportion (4%) indicated that they were very satisfied while 5% were 

very dissatisfied. 

4.4.2.2 ENTREPRENEURIAL MINDSET 
 

The second and third constructs of this study were fixed and growth mindset which are the two types 

of mindsets as introduced by Dwerk (2008) in literature. The research instrument adopted the mindset 

quiz from (Dwerk, 2008) to measure the constructs, the mindsets were divided into intelligence and 

talent. Below is the analysis of the results from the fixed mindset construct.  

 



   

 
 

42 

4.4.2.2.1  FIXED MINDSET 
 

Level of agreement Frequency (n) Percentage (%) 

Strongly disagree 10 13.3 

Disagree 21 28.0 

Somewhat disagree 3 4.0 

Neither agree nor disagree 7 9.3 

Somewhat agree 9 12.0 

Agree 15 20.0 

Strongly Agree 10 13.3 

Table 4.4.2.2.1: You have a certain amount of intelligence, and you cannot really do much to change 
it (n=75) 

Source: Primary data 

 

Table 4.4.2.2.1 shows that a combined majority 45% of the respondents somewhat agreed, agreed, or 

strongly agreed with the statement “You have a certain amount of intelligence, and you can’t really do 

much to change it”.  

 

Level of agreement Frequency (n) Percentage (%) 

Strongly disagree 11 14.7 

Disagree 17 22.7 

Somewhat disagree 4 5.3 

Neither agree nor disagree 10 13.3 

Somewhat agree 6 8 

Agree 20 26.7 

Strongly Agree 7 9.3 

Table 4.4.2.2.2.: Your intelligence is something about you that you cannot change much (n=75) 

Source: Primary data 



   

 
 

43 

Table 4.4.2.2.2 above show