A business exit is an important stage in entrepreneurship activities. This stage is an
integral part of the entrepreneurial process because it is through this stage that
entrepreneurs leave the business they own and remove themselves from the ownership
and decision structure of their business (DeTienne 2010). Understanding business exits is
important because it provides a foundation from which entrepreneurs can begin in order
to maximise the value of their investment (Petty 1997). Further, it can explain the overall
picture of the entrepreneurship activities by providing knowledge of various processes,
behaviours and trigger factors that may be involved.
Based on an extensive literature review and the collection of empirical evidence, this
study investigates the extent to which a Small and Medium Enterprise (SME) owner’s
human capital, entrepreneurial orientation (EO), firm performance and psychological
ownership are related to one’s contemplation to exit his or her business. In addition, this
current study of business exit explores whether these factors influence an individual’s
intention to exit the business through a process of contemplation. Much of the literature
on business exits have highlighted this phenomenon from the perspective of exit planning
and timing, types of exit strategies or options, and behavioural aspects of business exits
through intentions. However, no studies to date have highlighted or explicitly discussed
what factors may trigger the contemplation of an SME owner to exit his or her business.
Although previous studies have highlighted that certain factors could influence an
owner’s intention to exit (DeTienne & Cardon 2010; Leroy et al. 2007), these studies
have not explicitly examined whether there is a prior stage of an exit intention. It is
important that the contemplation of business owners to exit their business be examined
because business exits can be problematic for some entrepreneurs in understanding the
effort and time that they have provided to the business. Further, it is also important to
investigate whether an owner’s contemplation to exit influences one’s intention to exit
the business since no studies to date have provided a justification to this behavioural
aspect. Therefore, in order to expand the perspective of the business exit literature, this
study investigates the exit contemplation of SME owners in an Indonesian context.