Title: Recovering from entrepreneurial failure in small businesses: a six-domain framework and causal map

Authors: Mohammadreza Parsanejad; Leyli Jamali; Ali Zokaei Kuhbanani; Ali Bonyadi Naeini

Addresses: Department of Management, Iran University of Science and Technology, Tehran, Iran ' Department of Management, Iran University of Science and Technology, Tehran, Iran ' Department of Management, Iran University of Science and Technology, Tehran, Iran ' Department of Management, Iran University of Science and Technology, Tehran, Iran

Abstract: Entrepreneurial failure is common among small businesses, yet guidance on post-failure recovery is fragmented. We develop and validate a six-domain framework for recovery - economic, professional, entrepreneurial, social, emotional and physical - using a sequential mixed-methods design. We first synthesise indicators via content analysis and expert interviews, then survey 246 small-business entrepreneurs who recovered from failure. Exploratory factor analysis corroborates the six-domain structure. Using the decision-making trial and evaluation laboratory (DEMATEL), we map perceived directional influences among domains: economic conditions and professional and entrepreneurial capabilities exert higher net influence, while social and emotional resources are more dependent, and physical factors operate mainly as downstream outcomes. The results inform sequencing considerations: first, secure economic runway and capabilities; then, leverage social and emotional supports. The study informs policy, education and practice by indicating where to prioritise resources to shorten time to re-entry, while noting age and gender skew in the sample and single-country limits on generalisability.

Keywords: entrepreneurial failure; recovery; small businesses; re-entrepreneurship; resilience; economic domain; professional capabilities; social capital; emotional regulation; decision-making trial and evaluation laboratory; DEMATEL.

DOI: 10.1504/IJEV.2025.154206

International Journal of Entrepreneurial Venturing, 2025 Vol.17 No.4, pp.463 - 480

Received: 04 Oct 2025
Accepted: 26 Mar 2026
Published online: 16 Jun 2026 *

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