The early stages of growth in micro-firms

Abstract Micro-firms are a dominant group in every economy. However, in the current literature, little attention has been paid to this SME subgroup. Thus, new context-specific knowledge on the early stages of micro-firm growth is needed to strengthen business environments and to develop business support services. The aim of this study was to investigate the growth of independently owned technology- or service-based micro-firms in northern sparsely populated areas (NSPAs) in Finland. This domain has not been extensively studied. This study can be condensed into the following research questions: (1) How do the owner-managers of NSPA micro-firms evaluate their firms’ current stages of growth? and (2) How do the stage descriptions in the self-evaluation frameworks correspond with the experiences of the micro-firms’ owner-managers? This retrospective multiple-case study synthesised two empirically-based stage models into two self-evaluation frameworks—one for technology-based firms and one for service-based firms. We tested the two four-stage frameworks to describe current stages of 62 technology- or service-based micro-firms. First, we determined the current stage of growth for each micro-firm. Second, we explored the applicability of the self-evaluation frameworks to the experiences of the micro-firms’ owner-managers. The results indicated that the self-evaluation frameworks were a relatively good match for the growth experiences of each firm. Both frameworks may help researchers to provide more accurate data on the growth of technology- and service-based micro-firms