Abstract
The majority of Entrepreneurship studies have focused on Business success while little information regarding Business failure exists. However our knowledge of entrepreneurship is not complete without recognition of the business failure. Also, more researches in this field have been done in developed countries and it is limited studies in those countries where economic, social, cultural and political differ. Individual factors are the main ones affecting the entrepreneurial process. This is a study on a sample of new established small businesses in industry sector. First, in qualitative study, interview analysis of 10 semi-structured interviews lead to identified four groups of individual factors including motivations, skills, capabilities, and characteristics. Then, these individual factors have been evaluated in a sample of 158 unsuccessful businesses and data analysis of 52 complete questioners pointed out that “Lack of crisis management skills” and “Lack of marketing, financial and human resource management skills” are the main individual factors affecting business failure in new established small businesses in industry sector.
Highlights
Business discontinuation is an important feature of dynamic economies, and entries and exits of businesses are closely linked (Bosma et al, 2009)
The businesses were in different industry sector
Other important individual factors of failure are management skills that refer to marketing, financial and human resource and team management skills
Summary
Business discontinuation is an important feature of dynamic economies, and entries and exits of businesses are closely linked (Bosma et al, 2009). Small and medium-sized enterprises (SME) are of almost importance for the Economy. In the European Union (EU), more than 99 % of the existing firms are SME; they stand for two-thirds of all employment possibilities and account for 60 % of value added. They are seen as a main driver for generating employment, they promote innovation, put business ideas into practice, foster Regional economic integration, and maintain social stability (ENSR, 2003). The high figures of SME inject economic variety (Hannan & Freeman, 1989) and generate competition, positive for economic output (Porter, 1990)
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