Small Business Failure: The Role of Management Practices and Product Characteristics

摘要: ABSTRACT This paper focuses on why firms fail by comparing the management practices and product characteristics of successful failed small businesses that wanted to become mass merchandising suppliers. Almost 1700 manufacturers participated in a program, which evaluated firm its submitted product. Independent samples tests suggested (those rejected as suppliers) were inferior characteristics. A discriminant analysis marketing, technology usage, business risk, experience strategy accurate predicting ventures would be unacceptable for retail market, but it was not at more likely approved retailer's buyers. INTRODUCTION Small contribute growth stability U. S. economy numerous ways. provide than 50 percent all sales, employ over half American workforce, account 55 innovations (U. Business Administration, 1998). With this type economic impact, is surprising researchers have focused success failure. Understanding failure important, however, two reasons: (1) entrepreneurs who are familiar with rates may avoid starting ill-fated (2) know causes identify correctable factors lead (Bruno, Leidecker, & Harder, 1987; Perry, 2001). Some suggest comparison studies between needed different derive benefits from process (Gaskill, Van Auken, Manning, 1993; Lussier, Pfeifer, 2000; McGrath, 1999). attempts such study. It wanting also identifies sample. CAUSES OF FAILURE The Administration (SBA) reports 90 failures management-related (Udell, Atehortua, Parker, 1995). consequence poor because functions fall under discretion managers some degree affected operational (Bruno et al., Gaskill 1993). Fredland Morris (1976) note could blamed inadequate when "good management" defined ability foresee potential threats marketplace react accordingly. Therefore, section reviews identified businesses. In summary literature, Haswell Holmes (1989) noted substandard often led lack recordkeeping an inability access information decision-making purposes. Wichmann (1983) found accounting marketing key problems Alaska Wyoming. Few kept adequate records, had appropriate control measures, or understood principles marketing. Bruno al. (1987) suffered marketability setbacks they offered products sufficiently prepared took debt too early. Managers stated wait "window opportunity" their financing if do again. finding consistent work O'Neill Duker (1986) higher level surviving firms. Other cited incompetence inexperience major (Gaskill …