What is it about?
This paper evaluates critically whether small businesses start-up in the informal economy and whether they do so to test-trade the viability of their business.
Why is it important?
Reporting a 2012 survey of 595 small business owners in the UK, 20 per cent report trading informally when starting their business, 64 per cent of whom asserted a main reason was to test its viability. Some 13 per cent of all small businesses therefore start-up test-trading in the informal economy, although multivariate analysis shows that businesses started by men, with low current annual turnovers in particular sectors are significantly more likely to do so.
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This page is a summary of: Do small business start-ups test-trade in the informal economy? Evidence from a UK survey, International Journal of Entrepreneurship and Small Business, January 2014, Inderscience Publishers, DOI: 10.1504/ijesb.2014.062127.
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