Ontleding van kleinsakemislukkings

Abstract

About 75 percent of all small businesses started each year are predicted to fail within the first 5 years. It is important to identify and recognise the major reasons and pitfalls that often lead to small business failure to assure the survival of the small business. The small business owner will continually have to overcome certain common problems as the small business develops through the different stages. Information regarding problems of establishment in the first year or two; problems of consolidation in the next period; problems of expansion and problems in a saturated market, can be very useful to entrepreneurs when considering a business. The purpose of the study was to analyse the causes of small business failures and to determine the major problems which attribute to failure in each stage of the life cycle. The determination of the business failure rate and personal characteristics which lead to small business failures, is an important part of the study. The information required to achieve the stated objectives, was collected by means of personal interviews and structured questionnaires. A total of 42 small business owners in the geographical area of Secunda and Bethal took part in the study. The telephone directory was used as a sampling frame for the group of 30 small businesses still practising the trade. A systematic sample was drawn from every second small business selected from the list. A purposive sample of 12 unsuccessful small business owners was used for analysing small business failures. Small business owners who have failed, have certain personal characteristics in common. When these characteristics interact with certain managerial deficiencies and contingency factors, businesses cease to trade. The contingency factors are related to the stages in the life cycle of the business which require a shift in

abilities and skills from one stage to the next. Small business problems and symptoms of failure occur when these requirements cannot be met by the small business owner. The results of the research indicate that actual causes of small business failures are the owner's incompetence, lack of business experience and lack of business knowledge in major activities such as finance and marketing. The major pitfalls are the failure of the small business owner to improve his personal and managerial skills, inadequate planning and under-capitalization. The major problems facing the small business owners are inadequate planning in the entrepreneurial stage, financing the business in the start-up stage, lack of capital in the growth stage and severe competition in the maturity stage. The failure rates are highest among small businesses with less than 20 employees, in the 3-to-5 year old age bracket in the retail, service and construction industries. A strategy for success was recommended for each entrepreneur before starting and managing a small business. Firstly, the entrepreneur must execute a self-assessment of his entrepreneurial potential and personal objectives. Secondly, gain prerequisite basic education in the major business activities, learn about what really causes businesses to succeed or fail, and about the importance of management skills necessary at the different stages of the life cycle. Thirdly, in preparation, gain approximately 2 years' experience in an industry or type of business.