FINANCIAL CONFIDENCE, RISK-TAKING BEHAVIOR, AND SUSTAINABLE SUCCESS IN SME ENTREPRENEURS: A THEORETICAL FRAMEWORK

Abstract

This research employed a qualitative research approach using in-depth interviews conducted through semi-structured interview protocols to explore the perspectives, experiences, and financial decision-making processes of small and medium-sized enterprise (SME) entrepreneurs under conditions of economic crisis. The participants consisted of 15 purposively selected entrepreneurs who possessed substantial business management experience and were able to sustain their business operations amid economic uncertainty. The objectives of the study were: 1) to examine the factors influencing financial confidence among SME entrepreneurs during economic crises; 2) to analyze the relationship between financial confidence and risk management practices for business survival; and 3) to develop a theoretical framework aimed at enhancing financial sustainability for new-generation entrepreneurs. The findings revealed four key factors affecting financial confidence: 1) internal and psychological characteristics of entrepreneurs, 2) financial discipline and financial management systems, 3) social capital and networking relationships, and 4) institutional and external policy contexts. Furthermore, financial confidence was found not to be a static perception but a dynamic construct directly interacting with risk management behaviors. It functioned as a risk-filtering mechanism, supported proactive risk management practices, and significantly influenced business survival strategies. Based on qualitative data synthesis, the researcher developed a theoretical framework termed the “Sustainable Success Mechanism,” which explains the interrelationships among financial confidence, risk management processes, and sustainable business outcomes. The proposed framework highlights the interaction among critical variables and contributes theoretically to the understanding of business management under crisis conditions. Additionally, it provides practical implications for policy development and entrepreneurial capacity building to promote long-term financial sustainability