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Business Failure This research investigated t

This research investigated the reasons for business failure. The research consisted of three parts. The first part of the research was a review of literature relevant to business failure. The purpose of the literature review was to establish the consensus of business analysts and observers on the reasons for business failure. The second part of the research involved the administration of a survey instrument to six small business owners. The survey instrument elicited information concerning the establishment and performance of the businesses. The purpose of the survey of business owners was to develop the information necessary to compare the characteristics of small, going concern businesses with the consensus reasons for business failure established through the literature review. The third part of the research was a comparison of the establishment and performance characteristics of the small businesses surveyed with the consensus reasons for business failure established through the literature review. The purpose of this comparison was to determine how knowledgeable, prepared, and vulnerable small business owners are with respect to the potential for business failure.

The literature review identified seven major factors which appear to be the underlying causes of most business failures in the United States. These seven factors are (1) excessive debt, (2) location of the business, (3) over expansion, (4) marketing practices, (5) poor planning, (6) unsound business concept, and (7) under capitalization, and credit and collection practices.Excessive Debt

Excessive debt is cited as a primary underlying reason for business failure with respect to large corporations, small businesses, and individuals (Oneal, 1988; Consumer's Digest, 1988; Merwin, 1987). Loading up with debt by businesses may be motivated by expansion plans, attempts to overcome the results of poor operating performance, and under capitalization.

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Business Failure This research investigated t. (1969, December 31). In LotsofEssays.com. Retrieved 10:02, March 29, 2024, from https://www.lotsofessays.com/viewpaper/1703962.html