Why do small companies fail or succeed

[Bratley]

Hi, I don't know if I'm posting this in the right place but does anyone know of any books which discuss the factors that are key in the success of failure of small businesses? Journals would be just as useful.

I am writing about this subject for my MBA dissertation and so far I'm not having much luck with literature on the subject.

I thought this would be a subject that is extensively written about and although I can find loads on the web in different places I'd prefer to read something written by 'someone' as opposed to an anonymous article on a random website

Any help would be much appreciated

Cheers

Victoria

[Ozzy]

This is a subject that many many business advisers write about, all with their own spin on it.
A business adviser with a marketing background may write that the reason is due to lack of a successful marketing plan, one with a corporate background may write that it down to lack of structure, and VC may write that it is down to lack of finance.

The truth is that many businesses fail for many different reasons, all varying depending on their business secto and the individual strengths behind the business. That said, a well thought out and planned business (Business Plan) would highlight and shortfalls in the business model, and then plan a way to overcome them. Ofcourse not allowing for the Law of Sod, Bad Luck, and any other improssable to predict disasters.

Ok, I know this doesnt directly answer your question so I'll get my coat.

[10 Yetis]

Bratley,

If there was a book with this info in then it would be continually sold out. I agree entirely with Ozzy about reasons why.

You might have more success if you speak to your local bank's small business advisor or maybe Business Link?

I currently work in the financial serices sector and we are frequently approached by MBA students about various subjects that we help with.

p.s. the company i work for does not have any business related products so i cannot help further.... sorry.

Ozzy, can i share that coat?

[StartUp]

Have you read the Emyth by Michael Gerber?

If not I suggest you do. Note the subtitle is "Why most small businesses don't work and what to do about it" :wink:

For what its worth, statistically most businesses fail due to cashflow problems, however the reason behind the cashflow problem is the real reason and that is often bad management. Back to earlier comments and the Emyth, set it up properly in the first place and you have a far better chance.

Best wishes

Julia

[MikeH]

I took a quick look in the search engines using "why do businesses fail" within the quotation marks. I found quite a lot of information that should be acceptable for academic research, although from experience I tended to use a good balance of resources for my studies rather than heavily focusing on the internet.

I found this within one minute within an article on business plans-

Why do businesses fail?
• 1.5% Neglect (Bad habits, poor health, marital difficulties, death or other)
• 0.5% Fraud
• 0.9% Disaster
• 10.7% Lack of Experience in Line
• 16.4% Lack of Managerial Experience
• 25.1% Unbalanced Experience
• 44.9% Incompetence
97% of Businesses that failed, failed because of Management Issues, therefore, you can limit your probability of
failure by learning about managing your business opportunity first.

I hope that this helps.

Mike.

[Ozzy]

The 97% figure makes sense considering that almost all problems can be overcome with careful management.

[ajdriver]

Have you read the Emyth by Michael Gerber?



Brilliant Book!
I haven't put it to use yet, and I will read it again before I do, but I think the book is great.

[Rob]

Victoria,

You can check out an article I wrote entitled '10 Common Mistakes Start Up Business Make'.

The article is available at http://www.smallbusinesssuccess.biz/free_articles/common_small_business_mistakes.htm

It's not an exhaustive list but may give you a few pointers.

[Kay]

Do you have access to the EBSCO research database online? I generally find it to be a fantastic resource. There are several articles relevant to your subject in there.

Also, I recently discovered Google Scholar beta version, which is pretty good. (Go to Google.com and click "more" above the search box, this will take you through to the page with all the Google services.)

HTH

Kay

[mobyme]

I believe the biggest single cause of failure is failing to manage the business; too often you will find the person who should be managing the company bogged down in some mundane task that any other member of the company could be doing. The role of a manager is to look over the horizon and plan where the company is going to be in six months time and put in place the resources to make it happen. The next biggest single cause of failure must be discounting or working at a profit margin that is too little to handle any form of setback, successful companies refuse to go down the discount route realising that you have to work twice as hard for the same return

[james constant FCCA]

Hi

Have a look at http://www.taxadviceuk.com, it might be helpful.