The purpose of this paper is to explain the Eisenhardt case based method of theory development using an example of a study on ethnic entrepreneurial communities in Karachi. The paper servers' two purposes: (a) It serves as a guide, for the future researchers studying the entrepreneurial activity in Pakistani context, to establish the internal validity of the methodology which can be challenging particularly when the data is in the form of subjective responses of partici- pants with a traditional sociocultural background. (b) To ensure the reliability of a case based study the detailed articulation of the research methodology is necessary, so that the future researchers can conveniently replicate the process. For these reasons the paper goes in detail to explain the intricacies and challenges faced during the nine stage process of data collection, processing, triangulation and analysis, while ensuring the internal validity of the analysis. Discussion on the outcome of the research is not included as it will require a separate paper.