Small Business Failure

Topics: Small business, Business, Corporation Pages: 3 (1001 words) Published: April 16, 2013
A small business is a business that is privately owned and operated, with a small number of employees and relatively low volume of sales. Small businesses are normally privately owned corporations, partnerships, or sole proprietorships. Business failure is the last stage of an organization's life cycle. Organizational decline, leading to failure is characterized by management who has become reactionary. The result is inadequate or nonexistent planning and inefficient decision-making. Characteristics of a small business

Revenue and Profitability
Small-scale business revenue is generally lower than companies that operate on a larger scale. The Small Business Administration classifies small businesses as companies that bring in less than a specific amount of revenue, depending on the business type. Employees

Small-scale businesses employ smaller teams of employees than companies that operate on larger scales. The smallest businesses are run entirely by single individuals or small teams. A larger small-scale business can often get away with employing fewer than one hundred employees, depending on the business type. Market Area

Small-scale businesses serve a much smaller area than corporations or larger private businesses. The smallest-scale businesses serve single communities, such as a convenience store in a rural township

a) Amount of Effort Exerted
The single most important factor in determining who succeeds and who doesn't is simply the amount of effort exerted. If you aren't ready and willing to work - and work hard - being an entrepreneur is probably not for you. For starters, most people are used to working and 8-to-5 job, with a "boss" directing them. When you're in business for yourself, you must have the discipline to work independently

b) Inadequate Financing
A considerable number of people have unrealistic expectations when it comes to the funds needed to start a business. They often lack the necessary start-up...

References: http://www.moyak.com/papers/small-business-failure.html
http://voices.yahoo.com/causes-small-business-failure-avoid-72346.html?cat=35
CHACHA MAGASI STUDY NOTES ENTREPRENEURSHIP DIP 11
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