It is proposed that a research study be performed, the purpose of which will be to identify the those factors related to the financial management of small business enterprises, which, if effectively addressed, will enhance the probability of the long term success of such enterprises. A plan of the proposed research is herein presented.
As a part of this introduction, a problem statement, a reflection on the importance of the problem, and limitations to its study are presented. Following the introduction, a brief review of the literature relevant to the problem to be studied, a statement of the research methodology which will be employed in the conduct of the proposed study, and a plan for the pre sentation of the research results are presented.
The factors which influence the untimate success of any business enterprise large, medium, or small are both numerous and varied. Ineffective financial management, however, is implicated in an unusually high proportion of small business failures. Thus, a decision was made by the researcher to emphasize this group of factors in the research to be performed for the proposed study.
The importance of small business activity in a market economy may be appreciated by considering the role of such activity in the economy of the United States. Applying the Nappi and Vora (1980) definition of small business (either fewer than 100 employees, or less than one million dollars in annual receipts), somewhat more than two thirds (67.9 percent) of all business enterprises in the United States are classified as small (U.S. Department of Commerce, 1982). These firms, in turn, accounted for 40.8 percent of non government and non farm employment, 35.8 percent of sales revenues, and 32 percent of the country's GNP (U.S. Department of Commerce, 1982).
The fact that small businesses employ almost one half of the American workforce illustrates the magnitude...