Maria Marshall

The economic structure of the rural economy in the United States has greatly evolved over the past half-century, leaving small communities that once flourished in economic disrepair. In response to this economic stagnancy in rural America, many communities have turned to entrepreneurs as a solution for improvement. However, rural entrepreneurs often encounter unique capital-related challenges, not experienced by their urban counterparts, making start-up success very difficult. It is our expectation in this study that a heightened understanding of the relative impact that the components of financial, human and social capital have on the success and/or failure of the entrepreneurial venture may be achieved.

Through primary data collection via self-administered survey, data from 50 entrepreneurs in Indiana has been recorded. A logit model will be used to analyze the many variables related to human, financial and social capital in order to assess their affect on an entrepreneur in the business formation process. A follow-up survey will be administered at 6 month intervals for two years to track the progress of the entrepreneurs. We hypothesize from the literature and a trial run of the data that having supportive social networks will prove to have the most significant relative impact on an entrepreneur in beginning the business formation process. Through the information revealed by this study, we hope to increase the probability of success for new small businesses by providing universities and small business development organizations with improved information that may help them to structure their assistance programs to best meet the needs of rural entrepreneurs.