Published in: Journal of Rural Studies
Cited as: Moyes, David, Paul Ferri, Fiona Henderson, and Geoffrey Whittam. “The Stairway to Heaven? The Effective Use of Social Capital in New Venture Creation for a Rural Business.” Journal of Rural Studies 39 (June 2015): 11–21. https://doi.org/10.1016/j.jrurstud.2015.02.004.
Scotland, Social capital, Rural business, Entrepreneurship
Small business researchers have explored how entrepreneurs benefit from their existing networks and social capital in venture creation, observing that better connections enhance the likelihood of the success of new businesses. However, we know very little about how new-venture entrepreneurs overcome gaps in their social capital and lack of access to networks. This research provides a case-study illustrating how a rural funeral business developed a sustainable, profitable and scalable crematorium venture through its owner’s instrumental use of his existing social capital and the purposeful recruitment of new members to fill gaps in expertise and resources. Combining these relationships, he created and managed a network which added significant value to the process of enterprise creation. We explore how the business-owner used this network and his own market knowledge to profitably exploit a perceived gap in the market through the provision of a facility which a local authority had previously considered, and rejected, as unsustainable because of insufficient population density in the region.
This case study, of a funeral and crematorium business in a rural location builds on Bosworth’s (2012) model and argues that an additional category (Type E) is required to incorporate rural service industries.
This case study presents Informal Shadowing as a new methodological approach. This technique follows a process of new enterprise development over many years using observation, semi- structured interviews, unstructured informal conversations, and documentary evidence of milestones such as planning permission granted and business launch. It is the process itself which is shadowed, as distinct from the individual, making this a novel and innovative technique.
An alternative semantic construct of social capital is presented, outlining the concept as a fluid and dynamic time-influenced phenomenon rather than a discrete, fixed network that occasionally creates new links. The concepts of core and augmented social capital are presented. Core social capital describes existing bonds between actors within a group, while the augmented social capital of inter-group bridging creates a more expansive network.