A Measurement Model of a Growth Mindset and Entrepreneurial Success Factors Influencing the Financial Business Performance of South African SMMEs

The concept of a growth mindset, defined as the confidence that capabilities may be advanced through persistence and learning, has been linked to greater adaptability, persistence, and innovation in entrepreneurial settings. A growth mindset, together with key drivers of entrepreneurial success including the ability to recognize opportunities, fostering creativity and innovation, demonstrating resilience and adaptability, and embracing risk, plays a critical role in achieving business goals, with financial performance remaining central to the growth of small business ventures. However, limited research has assessed how the growth mindset and key drivers of entrepreneurial success relate to the financial performance of SMMEs in the context of South Africa. This study sought to assess the measurement model’s reliability and validity, comprising eight factors: growth mindset, six key drivers of entrepreneurial success (opportunity recognition, creativity, innovation, resilience, adaptability, and risk-taking), and financial business performance. A total of 533 SMME owners in South African participated in the study by completing an online self-administered questionnaire dispersed through an international research firm’s database. Data analysis was conducted in AMOS using confirmatory factor analysis, reliability and validity testing, correlation analysis, and collinearity diagnostics. The results indicate that the eight-factor model demonstrates strong internal consistency, construct validity, and overall model fit. All constructs achieved Cronbach’s alpha and composite reliability values above the 0.60 threshold, and there was clear indication of convergent and discriminant validity. These findings confirm that the measurement model is both reliable and valid, providing basis for subsequent scholarly inquiry to test the structural paths between the growth mindset, key drivers of entrepreneurial success, and financial business performance of SMMEs.