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Small Business "Success"

Authors:
Small Business “Success”
Growth versus Longevity
M. Gordon Hunter
Professor Information Systems
Faculty of Management
The University of Lethbridge
4401 University Drive West
Lethbridge, Alberta T1K 3M4
CANADA
TEL: 403 329-2672 FAX: 403 329-2038
CMA Alberta Distinguished Scholar
Director Small Business Institute
Dan Kazakoff
Faculty of Management
The University of Lethbridge
4401 University Drive West
Lethbridge, Alberta T1K 3M4
CANADA
TEL: 403 329-2028 FAX: 403 329-2038
Director Theory into Practice Programs
Chair Small Business Institute
Advisory Committee
May, 2014
Small Business “Success”
Growth versus Longevity
Abstract
There are different perspectives of what constitutes a successful small business. In order
to survive a small business must continue to make a profit. Much research suggests a
successful small business must grow. However, growth may be inhibited by personal
preferences of the small business owner to maintain control over the operation. Further,
a slight increase in sales may result in a significant increase in expenses. Thus, longevity
may represent another perspective on success.
INTRODUCTION
In order to survive a small business must first make a profit. Beyond this point of survival
however, “success” may be defined from two perspectives. One perspective suggests growth as
a measure for success (Smallbone & Wyer, 2000; and Dobbs & Hamilton, 2007). Success is
measured by growth in revenues and number of employees; and consequently an increase in
asset base. The second perspective proposes that over time the growth path of a small business
may not continue upward (Tan et al, 2009). Indeed, entrepreneurs may become less growth
oriented as their personal motivations change (Westhead & Wright, 1999). They become
satisfied with a certain level of performance and income. Their desire to maintain control leads
to a decision to not grow further. Support for this perspective was found in the further analysis
of research to be reported here (Hunter & Kazakoff, 2008; and Hunter & Kazakoff, 2012).
Representatives of 11 small businesses were interviewed to document management issues. Some
of the research participants were content with the volume of their operations. Others realized
that a small increase in the volume of output (house building) would lead to a significant increase
in expenses (more sub-trades), which in turn could financially ruin the small business.
In general, few small businesses survive for very long. Zontanos & Anderson (2004) report that
over two thirds of small businesses close within the decade they open. More specifically,
Industry Canada (2010) reported that 30% of small businesses fail within one year and up to 75%
after 9 years. In the United States (Small Business Administration, 2010) 33% of start-ups have
failed by the end of the second year and 50% have failed after 4 years. Further, very few small
businesses exist for a long time. The attrition rate is quite high. According to Cater et al (2006)
only 30% of small businesses are passed to the second generation with only 12% being passed to
the third. Further, only 4% make it to the fourth generation.
If a small business is going to exist for a long time there needs to be a focus on empowering
employees and facilitating the development of a culture that promotes a learning environment
(De Geus, 2002). Given this focus, the small business will retain employees who will adopt an
attitude of continuing to search for improvement. Burlingham (2006) identified entrepreneurs
who rejected the opportunity for growth. These individuals did not necessarily want to do more.
They were content with simply doing better. Note that this attitude does not discount taking an
innovative approach to conducting business.
This document is organized as follows. To begin, some definitions of small business are
reviewed along with the importance of small business to a nation’s economy. Then, small
business is differentiated form large companies. The performance of a small business is based
upon its resources and how they are employed. Growth may result but in general it does not last.
This leads to the contention that success is not necessarily related to growth but in some cases
longevity may represent a successful small business.
SMALL BUSINESS DEFINED
The term “small business” may be interpreted in a number of different ways. There is, in fact, no
consistency in defining the term. Indeed, within a specific interpretation of small business there
exists a variety of definitions. The following paragraphs provide some perspectives on
definitions of the term.
With a focus on decision making the Australian Wiltshire Committee developed the following
definition:
“…a business in which one or two persons are required to make all the critical
management decisions.” Wiltshire Committee (1971:7)
Other definitions have been related to financial aspects. These measures include total assets; net
worth; total value of products; annual sales; or annual revenues. Unfortunately, when these
measures are used there is no consistency in the threshold amounts for an interpretation of what
constitutes a small business. Industry Canada (2010) has outlined more alternative definitions.
The Canadian Bankers Association defines a small business via their loan authorization threshold
of $250,000. The Export Development Corporation suggests a small business would have export
sales of less the $1 Million. Unfortunately, again, not all small businesses require loans or export
their products. Further, these measures are difficult to obtain. Many small businesses are
privately held and therefore, are not required to report such information. Also, many small
business managers are not prepared to divulge this information (even if it was available
internally) because of the potential impact on their competitive environment. Further, recent
research has determined that small business managers tend to rely more on informal sources of
competitive information rather than on the above statistical measures. (Halabi et al, 2010).
Thus, the term small business tends to be defined based upon the number of employees
(Longnecker et al, 1997). This measure is readily available due to the required reporting rules
established by government agencies regulating payroll systems and the determination of income
tax deductions. Most jurisdictions require the remittance of employee salary payment
information along with income tax data.
In Canada the definition of small business depends upon the industry (Industry Canada, 2010).
In the manufacturing sector a small business will have 100 or fewer employees, while in the
service sector 50 or fewer employees will be used to define a small business. Medium sized
businesses will employ fewer than 500 employees regardless of industry.
The European Parliament (2002) uses a range of numbers of employees to define different
categories of businesses. So, a micro business has 0 – 10 employees. A small business will have
50 or fewer employees. Medium sized businesses will consist of up to 250 employees. There is
no differentiation based upon the type of industry.
Finally, in the United States a small business will have fewer than 500 employees (Michma &
Bednarz, 2006). Again, in the United States there is no differentiation based upon the type of
industry.
The variety of small business definitions, even within the measure of number of employees, has
lead researchers to take a contingency approach. For each project the definition that may be used
could be the one generally accepted in the geographic location of the investigation as outlined
above. While this approach will suffice for an individual project it becomes difficult to compare
the results of international projects when different interpretations of measures have been used.
IMPORTANCE OF SMALL BUSINESS
Small business contributes a significant portion of the national Gross Domestic Product (GDP)
of many economies. For instance, in Canada small business contributes 29% toward GDP and
employs 5 Million people, representing 48% of the total work force in the private sector
(Industry Canada, 2010). In the United States the contribution to GDP is 30% and employment
of 50% of the total work force (Michma & Bednarz, 2006). Further, small business employs a
large percentage of the total workforce, as shown in Table 1.
TABLE 1
PERCENTAGE EMPLOYMENT OF TOTAL WORKFORCE
COUNTRY
PERCENTAGE
EMPLOYMENT OF
TOTAL WORKFORCE
SOURCE
Canada 48 Industry Canada (2010)
United Kingdom 47 Department for Business
Innovation and Skills (2012)
United States 50 Michma & Bednarz (2006)
SMALL BUSINESS VERSUS LARGE COMPANY
A small business is not a smaller version of a large company (Welsh & White, 1981). Small
business managers take an approach to decision making that is different from large company
administrators (Forsman, 2008). Stevenson (1999) determined that small business managers
allocate their scarce resources to activities considered priorities with a focus on the short term.
The concept of scarce resources is known as “resource poverty” (Thong et al, 1994). When
compared with large company administrators, small business managers lack time, finances, and
skills. These limitations affect decision making and activities within a small business. Due to
their lack of size, small businesses may have limited market power and consequently will have a
relatively few customers (Zontanos & Anderson, 2004). This situation may cause the small
business to be dependent upon the actions of their customers. Also, because the small business
will have few employees, they must be multi-skilled and prepared to perform many varied tasks.
Further, when a small business is just starting out it is difficult to gain legitimacy and support
from various stakeholders such as employees, customers, suppliers, and financial institutions
(D’Intino et al, 2007). There are two types of liabilities that impact a small business. They are
the liability of newness and the liability of smallness (Liao et al, 2008/2009). The liability of
newness suggests that the small business has been formed relatively recently and does not have a
track record dealing with external entities such as suppliers and financial institutions. The
liability of smallness relates to the lack of resources in a similar way as the Thong et al (1994)
concept of resource poverty.
A perspective of small business characteristics is described by Stevenson (1999). Table 2
presents a continuum of approaches taken for business practice by small business managers and
large company administrators. The continuum differentiates small business managers and large
company administrators. The term “Promoter” is associated with small business managers and
reflects a risk taking proactive and flexible approach to business practices. The large company
administrator term is “Trustee”. In this case the focus is on maintenance of existing assets
through formal procedures.
TABLE 2
APPROACHES TO BUSINESS PRACTICE
ASPECTS OF
BUSINESS
PRACTICE
PROMOTER TRUSTEE
Small Business Large Company
Strategic Orientation Capitalize on an
opportunity
Focus on efficient use of
current resources to
determine the greatest return
Resource Commitment
Decisions
Act in a very short time
frame
Long time frame, considering
long term implications
Multi-staged One-time up-front
commitment
Minimum commitment
of resources at each
stage
Large scale commitment of
resources at one stage
Control Decisions Respond quickly to
changes in competition,
market, and technology
Formal procedures of
analysis such as capital
allocation systems
Adapted from Stevenson, 1999
Aspects along the continuum relate to strategic orientation and decision making that involves
resource commitment and control decisions. The strategic orientation of small business
managers suggests they will take an external focus in order to effectively capitalize on emerging
opportunities. Alternatively, large company administrators will focus internally on making
efficient use of existing resources. The decision making process is composed of two
components. Initially, a resource commitment decision is made and then follow-up control
decisions are made to respond to changes that may impact the revised situation. The small
business manager will act in a very short time frame and attempt to make a minimum
commitment of resources in multiple stages in order to maintain flexibility. When making
resource commitment decisions the large company administrator will consider long term
implications of a large scale allocation of resources at the outset of an initiative. The control
decisions are made in response to changes in the business practice environment. The small
business manager will react quickly to any changes in the environment. An assessment will be
made about impacts as a result of the competition, market, and technology. The large company
administrator will follow formally established and repeatable procedures to analyze the situation
and potential impacts on internal systems relating to financial and human capital.
Another perspective of small business involves the concept of “Resource Poverty” (Thong et al,
1994). This concept addresses the issue that small business managers lack important resources
necessary to conduct operations. These resources relate to skills, time, and finances.
Small business, because of their limited size, employs only a few people. Each person is
required to perform a number of varied tasks. While being a generalist would be helpful there
may be situations where the individual does not possess the necessary skill. Because of the small
number of employees not all of the appropriate skills may be available to support the entire
business operation. Acquiring the necessary skills externally through outsourcing may be an
alternative. The third component of Resource Poverty, finances, may have a negative impact by
preventing the acquiring the necessary skills, as discussed below.
Another aspect of Resource Poverty relates to time. Small businesses possess fewer employees.
Beyond the skill issue discussed above, having fewer employees means less time to devote to the
necessary activities to carry out business operations. This lack of time relates to both the work
level as well as management. Workers may not have sufficient time to carry out their duties. It
may take longer than expected to build a product or provide a service. At the management level
the lack of time for decision making may lead to poor decisions or the lack of recognition that a
decision is necessary.
The final aspect of resource poverty relates to finances. As most small businesses are privately
held, they tend to be similarly financed resulting in a limited supply of money. In general, small
business has difficulty obtaining financing. Indeed, small business has more difficulty than large
companies in accessing financial resources (Ang, 1991). Small business managers may take an
informal approach generally described as the “3Fs” – Family, Friends, or Fools. This approach
may prove difficult. Initially, the amount of finances available may be limited. Further, if
repayment is delayed for some reason personal relationships may be negatively affected. A more
formal approach would be to establish a business relationship with a lending institution (Cole &
Wolken, 1996; Ang, 1992). However, because of the centralized nature of credit granting
policies, the unique regional or industry sector aspects of small business operations may not be
considered (Hunter, 2011; Boot, 2000; and Degryse & Van Cayseele, 2000).
Small businesses tend to focus on a relatively small customer base (Zontanos & Anderson,
2004). The focus is also within the local region (Weinrauch et al, 1991). The customer and
regional focus are related to the fact that the business is small and lacks necessary resources to
expand operations (Thong et al, 1994). This focus, however, creates a conundrum. It is
incumbent upon the small business managers to work directly with their customers to provide a
personalized service (Berry, 1983; McKenna, 1991; and Cardwell, 1994). Indeed, a long term
relationship with customers will prove beneficial. However, this narrow focus could result in a
negative financial impact upon the small business. A downturn in the local economy may lead to
a slowing of operations in the small business customer base. This, in turn, will affect the small
business. Further, relying on a few customers could also have a negative impact if even one or
two customers cease operations of start dealing with another business. Note that one or two
customers could represent a large percentage of a small customer base. Thus, it may be worth
the effort required to establish a diversified customer base and regional operation which may
contribute to reducing the risk of a more focused approach.
PERFORMANCE OF SMALL BUSINESS
Huybrechts et al (2011) investigated the intangible aspects of small business through the lens of
the resource-based view (Wernerfelt, 1984) which suggests that the level of performance of the
small business is the result of its resources (Penrose, 1959) and how they are employed (Barney,
1991). The assessment of the intangible aspects as they relate to performance is presented in
four categories in Table 3.
TABLE 3
FAMILY FIRM INTANGIBLE RESOURCES
CATEGORY DESCRIPTION
Organizational Culture “This collection of values, beliefs, assumptions
and symbols (Barney, 1991) can influence
employees in a way that is beneficial to financial
performance.” (Huybeechts et al, 2011: 272)
Reputation “...a perceptual representation of a company’s
past actions and future prospects that describe
the firm’s overall appeal to all of its key
constituents when compared with other leading
rivals...” (Fombrun, 1996:72)
Human Capital “...the acquired knowledge, skills, and
capabilities that enables persons to act in new
ways...” (Coleman, 1988:100)
Networks “...personal relationships which transcend the
requirements of organizational structure...” (Hall,
1992:138) and include “...information,
technologies, access to markets and
complementary resources...” (Hitt et al, 2001)
Adapted from Huybrechts et al, 2011
These four categories of intangible resources may contribute to competitive advantage. The
following comments relate to the performance of small business and how these categories
explain the competitive advantage obtained by family-base firms. The category of
“Organizational Culture” may be considered by four dimensions. First, the family firm is group
oriented. Employees interact altruistically (Lubatkin et al, 2005 and Schulze et al, 2001). Thus,
they tend to share knowledge and collaborate in an environment of trust (Zahra et al, 2004).
Second, there is an internal focus regarding unique knowledge and expertise (Miller & Le
Breton-Miller, 2006; and Zahra et al, 2004). Third, the influence of the founding entrepreneur is
significant (Denison et al, 2004), even after relinquishing control of the business. Hunter &
Kazakoff (2008) found further support for the continued influence of the founding entrepreneur
even after his demise when they investigated multi-generation small business. Fourth, family
firms tend to focus relatively more on the long term (James, 1999; and Ward & Aronoff, 1991).
This long term perspective supports the pursuit of innovative strategies (Teece, 1992).
The “Reputation” of the small business may also contribute to competitive advantage. It is
considered important to establish and maintain a positive reputation (Fombrun, 1996). The
process of marketing the product or service brand should contribute to a unique image for the
small business. Positive and on-going relationships with all stakeholders including the general
public will contribute to a positive reputation and in turn competitive advantage (Fombrun,
1996).
“Human Capital” includes the knowledge and skills of employees of small business (Huybrechts
et al, 2011). There is concern that the level of skill may be limited in small business because of
the tendency to employ family members (Dunn, 1995; and Schulze, et al, 2001). However, there
are positive aspects related to lower turnover (Miller & Le Breton-Miller, 2003); increased
motivation (Tagiuri & Davis, 1996); and altruistic behaviour amongst employees (Voordeckers et
al, 2010). Family members tend to be very committed to their job (Donnelly, 1964; and Horton,
1986) and are willing to make sacrifices for the good of the business (Dyer, 2006).
As an extension of the Human Capital Category various aspects of management may be
considered including the use of financial information, management practices, management
capability, and management creativity.
Halabi et al (2010) investigated whether and how financial information is used in small
businesses. They determined that small business managers possessed a very basic understanding
of both accounting and finance and tended to rely upon an external accounting service for
general business advice. This finding supports previous research (DeThomas & Fredenberger,
1985; Marriott & Marriott, 2000; and Argiles & Slof, 2003). When statistical performance
information was available the managers seemed to prefer to consider a more informal assessment
such the bank account. Again, this finding confirms prior investigations (Welsch & White, 1981;
Khan & Rocha, 1982; Chaganti & Chaganti, 1983; Deakins et al, 2002; and Dyt & Halabi,
2007).
Floren (2006) investigated management practices in small businesses. He found that managers
continually shifted their attention amongst many issues. Their work day is “...unplanned,
informal, hectic and fragmented.” (Floren, 2006:281). Further, managers prefer informal
communication and, as supported by Halabi et al (2010), tend to ignore formal information even
when it is available.
Zinger et al (2001) investigated the impact of managerial capability on the performance of
emerging small businesses and determined that sound marketing practices positively contributed
to improved sales and earnings. This finding supports the contention by Pitt & Kannemeyer
(2000) regarding the key role of a marketing strategy in an early stage enterprise.
Wyer et al (2010) suggest that owner manager creativity contributes positively to competitive
advantage. They determined, among other findings, that attitudes towards flexibility and
learning on the part of managers created a positive work environment which facilitated overall
performance and, in turn, competitive advantage.
Finally, “Networks”, sometimes referred to as social capital (Nahapiet & Ghoshal, 1998), involve
important personal relationships. In a small family run business family social capital relates to
the relationships between family members (Huybrechts et al, 2011). Organizational social
capital refers to the relationships with external entities (Arregle et al, 2007) such as banks,
suppliers, or customers (Le Breton-Miller & Miller, 2006).
Poor small business performance due to a lack of managerial skills has been known for some
time (Peterson et al, 1983; Chaganti & Chaganti, 1983; Chaston, 1997; Fredland & Morris, 1976;
and Theng & Boon, 1996). Konorti (2010) determined that employing professional managers
contributed to the profitability of small business. He defined a professional manager as, “…a
person who attended a post-secondary institution, who is a member of a professionally
recognized institution in good standing, and who has practiced in his or her field for more than a
year.” Konorti (2010:14). Professional managers bring important skills and competence to a
small business which, in general, are lacking in incumbent managers.
Alavi & Karami (2009) investigated the relationship between small business organizational
performance and the existence of a formal mission statement. They adopted the Toftoy &
Chatterjee (2004) definition of a mission statement as a document that, “…distinguishes its
business from its peer firms, identifies its scope of operations, embodies its business philosophy
and reflects the image it seeks to project (Alavi & Karami, 2009:556). They determined that a
mission statement was associated with improved performance. Further, performance also
improved when non-management employees were involved in the development of the mission
statement.
GROWTH OF SMALL BUSINESS
Tan et al (2009) suggest that small business research “...has shifted towards the attributes and
strategies that enable small business to grow, to contribute to economic value creation, and to
flourish at the center of the innovation and technology-based calculus.” (Tan et al, 2009:234).
The most common means for measuring growth is change in employment (Hoogstra & van Dijk,
2004; Chaganti et al, 2002; and Davidsson & Delmar, 1997) or change in sales (Kelley &
Nakosteen, 2005; LeBrasseur et al, 2003; and McMahon, 2001). Dobbs & Hamilton (2007)
investigated small business growth. Based upon 34 previous research studies they expanded
upon four applicable categories, originally identified by Smallbone & Wyer (2000) relative to
small business growth.
Table 4 documents these categories. Growth will be related to management strategy, where a
strategic decision is made that growth will be an objective. In conjunction with this decision is
the character of the entrepreneur who must be motivated to exploit the opportunity to grow. The
small business must be in a specific industry where the market provides the prospect for growth.
Finally, the small business profile (size and age) will be other contributing factors to growth.
TABLE 4
SMALL BUSINESS GROWTH
CATEGORY FACTOR DESCRIPTION
Management
Strategy
Growth Objective Growth may not always be an objective. An
owner’s consideration of control, life style, and
family desires will determine business goals.
Employee Recruitment
and Development
A growth oriented strategy will be affected by
the business’ ability to attract, develop and retain
appropriate employees
Product Market
Development
Growth will be facilitated with an emphasis on
product or service innovation and differentiation
rather than on price.
Financial Resources A lack of financial resources may inhibit growth.
Accepting external equity may impinge upon
owner control.
Internationalization and
Business Collaboration
While most small businesses do not export, high
growth businesses tend to do so.
Characteristics of
the Entrepreneur
Motivation Businesses established to exploit an opportunity
will have a higher propensity to grow.
Education Educated individuals are more likely to grow
their business. Education improves search skills,
foresight, imagination, computational and
communication skills.
Experience Management and industry experience will
contribute to growth
Size of the Founding
Team
Larger teams possess more talent and resources
which may contribute to growth if not affected
by group conflict.
Environmental
Industry Specific
Factors
Nature of the Market High demand increases growth prospects.
Role played by large
companies
Sub-contracting and outsourcing policies of
large companies can influence growth potential.
Characteristics of
the Business
Size New small businesses have a higher growth
rates.
Age Younger businesses have a higher growth rate.
Adapted from Dobbs & Hamilton, 2007
Kirkwood (2009) investigated growth aspirations in small businesses. Growth was defined by
sales turnover and the number of employees. Growth in employees was hampered by
availability of skilled personnel. However, sales growth was accomplished by those who
intended to grow by diversifying, focusing on customer service, and the resulting development of
a positive reputation.
An interesting research question posed by Tan et al (2009) relates to identifying the factors that
contribute to the divergence of growth paths in small business. Figure 1 depicts this divergence.
This divergence in growth is supported by Dobbs & Hamilton (2007) who suggest that start-up
firms tend to grow quickly until a certain size. Then, depending upon management strategies,
growth tends to slow.
FIGURE 1
A HIGHER VERSUS LOWER GROWTH COMPARISON
Growth
Higher Growth
Lower Growth
Start-up
Time
Adapted from Tan et al, 2009
Hunter & Kazakoff (2008) found this divergence in growth when investigating issues
surrounding multi-generation small business. To be included in this investigation, the small
business had to be family owned, locally run, and in at least the second generation. Ten of the 11
small businesses involved in this project employed fewer than 100 employees.
Representatives of multi-generation small businesses were asked to participate in this project.
All but two of the individuals interviewed were participating family members. One research
participant was an employee and the other was a non-participating family member. These two
individuals were interviewed at the request of a participating family member who thought their
comments would also provide valuable input. Overall, 20 research participants were
interviewed, representing 11 small businesses in western Canada.
A Narrative Inquiry (Scholes, 1981) approach was taken for qualitative data gathering. This
approach incorporates the concepts of ‘contextually rich’ and ‘temporally bounded’. The term
contextually rich refers to firsthand experience. It is recognized that the personal experiences are
more vividly remembered (Swap et al, 2001; and Tulving, 1972). The term temporally bounded
relates to the sequentially oriented personal recollections. Thus discussions should be organized
with a beginning, a sequence of events, and an end with regards to the area of investigation. This
sequential approach also promotes more thorough and accurate recollections of experiences
(Bruner, 1990; Czarniawska-Joerges, 1995; and Vendelo, 1998).
McCracken’s (1988) Long Interview Technique provided the conceptual context for conducting
the interviews. This technique allows research participants to reflect upon the research question
in a relatively free-flowing and unbiased manner. The interview protocol employed for this
project is included in Appendix A. Not only did this protocol provide a relatively flexible guide
for each interview, it also provided consistency across a number of interviews. The interview
transcripts were reviewed to identify themes. This is common practice when qualitative
interviews are used to gather data (Luna-Reyes and Andersen, 2003; Thompson, 1997; and Miles
and Huberman, 1994).
Hunter & Kazakoff (2008) determined that most of the small businesses investigated reported
that an increase in sales could be addressed within existing facilities. More automobiles, cows,
or watches could be sold. However, expansion was more complicated for a small business that
was building houses. For instance, one small business home builder focused on entry level
houses. They had established good working relationships with enough of the sub-trades
(electrical, plumbing, roofing, etc.) to be able to build and sell an average of one house per week
over one year. But even a small increase in volume would necessitate forming a working
relationship with a completely new set of sub-trades. Also, for a period of time while volume
continued to increase, this second set of sub-trades would only be necessary on a part-time basis.
Usually, sub-trades do not find part-time associations beneficial.
Another factor that contributes to variance in growth is the small business approach to strategy.
Examples of this factor were found in the business model of automobile dealers in Hunter &
Kazakoff (2008). One dealer adopted a very conservative approach. Expansion plans involved a
consideration for family involvement which resulted in a relatively lower growth path.
Alternatively, another dealer took a more aggressive approach to growth. Expansion
opportunities were investigated with the consideration of involving non-family members in
management roles.
Where feasible all of the businesses considered the possibility of future expansion opportunities.
Invariably, they emphasized a concern for continuing to provide quality products and services.
They recognized the importance of loyal customer relationships and how this relationship could
lead to new satisfied customers.
CONCLUSION
This document has reviewed aspects of small business and perspectives on success. Beyond
growth a small business may still be considered successful by the owner. Internally, a positive
learning environment will promote employee commitment. Externally, the provision of a quality
product or service will lead to positive customer relationships. Thus, longevity is suggested as
another definition of success.
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... Many studies have examined the perceived causes of small business failure. 1 These studies have generally been based on the opinions of one or more of the following three groups: failed owner/managers [5][6][7][8][9]; non-failed owner/managers [5,10,11]; or third parties such as liquidators or official receivers [7,8,12]. ...
... Said [19, p.37] argued that '75 percent of these failures could be avoided if the proper help is available and accepted'. Reynolds [20, p.239] found that a major 1 Excellent discussions and reviews of the literature on the causes of small business failure are provided by: Back (1985); Berryman (1983); Berryman (1993); and McMahon, Holmes, et al. (1993). [1][2][3][4] 2 A somewhat contrary view is expressed by Fredland and Morris [5, p.7]. ...
... Said [19, p.37] argued that '75 percent of these failures could be avoided if the proper help is available and accepted'. Reynolds [20, p.239] found that a major 1 Excellent discussions and reviews of the literature on the causes of small business failure are provided by: Back (1985); Berryman (1983); Berryman (1993); and McMahon, Holmes, et al. (1993). [1][2][3][4] 2 A somewhat contrary view is expressed by Fredland and Morris [5, p.7]. ...
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