Problems Entrepreneurs Face

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Problems Entrepreneurs Face

June 2003
By Gwen Richtermeyer, Ph.D. Director

BRIDG

Problems Entrepreneurs Face

Problems Entrepreneurs Face

June 2003 by Gwen Richtermeyer, Ph.D. Director
BRIDG

Table of Contents
Introduction ..................................................................... 1 Problems in the Beginning .......................................... 1 Finance ...................................................................... 1 Management ............................................................ 2 Marketing .................................................................. 3 Technology ............................................................... 4 Problems Now ................................................................ 5 Finance ...................................................................... 5 Management ............................................................ 6 Marketing .................................................................. 7 Technology ............................................................... 8 Addressing the Problems ............................................ 9 Demographics ............................................................... 10 Methodology ................................................................. 10 About Us ........................................................................ 11

Charts and Graphs
Chart 1, Financial: Problems THEN .......................... 1 Chart 2, Management: Problems THEN .................. 2 Chart 3, Marketing: Problems THEN ....................... 3 Chart 4, Technology: Problems THEN ..................... 4 Chart 5, Financial: Problems NOW ......................... 5 Chart 6, Management: Problems NOW ................. 6 Chart 7, Marketing: Problems NOW ....................... 7 Chart 8, Technology: Problems NOW ..................... 8 Chart 9, Preferred Learning Format ........................ 9 Chart 10, Ideal Learning Environment: ....................... Time Allocation ...................................................... 9 Chart 11, Ideal Learning Environment: Activities ... 9

Problems Entrepreneurs Face

Introduction
The “Problems Entrepreneurs Face” study was undertaken in fall of 2002 by BRIDG. It is the first study in Missouri to take an in-depth look at the various types of operational problems entrepreneurs face when they begin their businesses and after they have been in business for a number of years.

Problems in the Beginning
Given that only about one-half of new business ventures survive five years1, and 95 percent of all businesses are small (less than 500 employees), we need to learn as much as possible to positively impact the success rate for new businesses. This study focuses on four key operational areas: finance, management, marketing, and technology.

Finance
A sound understanding of business finance, access to capital, and relationships with lenders are integral to the success of any business. When starting a business, approximately one-third of the entrepreneurs found CASH FLOW, FINANCE, INSUFFICIENT SALES VOLUME, and PRICING GOODS OR SERVICES to be the most problematic. Chart 1 displays each finance topic and the corresponding percentage of respondents who indicated it as a problem.

Chart 1 Financial: Problems THEN
0% Cash Flow Finance Insufficient Sales Volume Pricing Goods & Services Delinquent Customer Accounts Understanding Financial Statements Obtaining Short-Term Loans Rent & Property Costs Obtaining Long-Term Loans Purchasing Obtaining Equity Capital Using Financial Information Obtaining a Line of Credit Building a Relationship with a Lender 10% 9% 23% 23% 21% 20% 19% 18% 17% 17% 32% 36% 43% 10% 20% 30% 40% 50% 54% 60%

1 Headd, Brian. 2003. Redefining Business Success: Distinguishing Between Closure and Failure. Small Business Economics 21: 51-61. BRIDG -1-

Management
In beginning their business, about one-quarter of the entrepreneurs...
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