Reasons Why Small Businesses Fail: And How to Avoid Failure (Survey‪)‬

INTRODUCTION The increase in entrepreneurial activity is a significant trend in the US economy. Unfortunately, small business owners often face the reality of failure. The important role of small business suggests that an understanding of why firms fail and succeed is crucial to the stability and health of economy (Gaskill, Van Auken & Manning, 1993). Of major concern to any would-be entrepreneur is the chance of success or failure of the proposed business. It appears critical for researchers and business owners and managers to better understand the factors contributing to the failure of small business. Success versus failure research benefits entrepreneurs, those who assist, train and advise them, those who provide capital for their ventures, suppliers, and public policy makers (Lussier, 1995a: 1995b).