Why Small Businesses Struggle And Fail The Pit Falls Of Small Businesses (Dissertation Sample)

Chapter 1: Introduction Chapter one of this dissertation encompasses several sections comprising the study background, the problem of the statement, and the study purpose. Further, there is an insightful elucidation of the research’s nature, the research significance, questions leading the research, and the short preview of current works. Moreover, there are explanations about the characteristics of the research area and the problem, the impact of the research to the current scholarly works and related or similar studies. Besides, the section identifies the gaps in the literature and draws on Von’s systems theory to develop a conceptual framework. Similarly, the section presents the assumptions, delimitations, and limitations to the study together with the explanations of the core terms utilized in the dissertation. It then closes by an in-depth conclusion cognizant of the depicted subsections.   

Background of the Problem Small ventures are essential to a healthy economy in the US because they represent approximately 99% of the total firms and 50% of the entire jobs created in America (Labedz & Berry, 2011). Accordingly, at least two-thirds of all the novel firms in American strive to survive for the first two years while one half of them strive to survive up to 4 years (Monahan, Shah, & Mattare, 2011). Chow and Dunkelberg (2011) asserted that small enterprise leaders often yield about half of the total private GDP and they provide employment to more than half of the total employees. The focus of this dissertation was to investigate why small businesses struggle and fail; in essence, exploring the pitfalls of the small businesses.     In the year 2011, about 28.2 million leaders from the small businesses employed approximately 99% of the total employees in America (SBA, 2014). Scholars at the SBA described a small venture as any enterprise with less than five hundred workers (SBA, 2014). Cronin-Gilmore (2012), further, claimed that small business leaders are the core factor in driving and sustaining the technological milieu of the global marketplace that result in more than 1/3 of the novel patents that are issued. Moreover, small businesses have been found to be the backbone of the fiscal conditions within the country, especially the role the small business leadership plays cognizant of the residents’ health (Eveleth, Chung, Eveleth, & O’Neill, 2011). What is more, in reference to high rates of failures depicted, researchers tended to ignore small businesses (Eveleth et al., 2011).   In the contemporary context, small corporate owners have emerged to be the core contributors to the American economy with a contribution of roughly 39 percent of the total gross domestic product (Ho & Barnes, 2013). Owners of the small businesses create at least 2 out of 3 novel jobs and often instigate innovations at a rate of 2.5 times more per employees as opposed to the large business firms. However, small businesses fail more at a rate equal to 75 percent within the 5 initial years of establishment (Plehn-Dujowich, 2010). Further, most of the businesses established as dealerships are often medium and small-sized enterprises (Fraser, Tseng, and Hans-Henrik, 2013). The accentuated failure rate leads to a collapse of the sector that deals with small businesses, which often has a profound outcome on the economy of the nation, especially the employment rates (Plehn-Dujowich, 2010). Additionally, the increased competition in the extant globalized world affects international and domestic firms, large and small firms, and fosters the competition making it unavoidable for majority of the firms (Chen & Chen, 2013). Scholars and academicians have depicted that large business enterprises experience about 100 percent survival rate as compared to small businesses that experience a low survival rate (Chen & Chen, 2013). Owners of the small businesses experience a myriad of challenges to foster the economy (Geho and Frakes, 2013). Evidentially, lack of training, support, and education that are needed for identification and utilization of business skills add to the incompetence and failure of small business. Fundamentally, impacting the improvement of the future that regards to the small businesses require appropriate skills and business practices including the possibility of determining strategies. Indeed, the owners of the small businesses need these strategies for expertise, development, proceedings, and techniques (Quazi, Bell, & Bryant, 2010)         

Problem Statement As indicated by Yallapragada and Bhuiyan (2011) small businesses claim at least 39% of America’s GDP and create roughly 2 out of the possible 3 jobs in the evidenced economy. Nonetheless, the SBA (2014) suggested that 1/3 of novel businesses do survive more than 10 years and only about half survive more than 5 years. Similarly, every year, the number of novel businesses that start is almost equal to that number of businesses that close down due to the notion of failure (Yallapragada & Bhuiyan, 2011). In perspective, the fundamental problem that the new entrants face is the way they embark on business initiative without full preparations. As such, it is proper to say that a large portion of small business owners have inadequate strategies that are aimed at achieving profitability. For example, in the year 2012, roughly 160 small business owners that deal with auto dealership in the US failed and experienced a subsequent closure of their businesses. Additionally, at least 200,000 workers in the auto dealership jobs lost their employment when their industry leaders failed and then filed for bankruptcy states (Williams, 2012). In this case, about 31.6% of the auto dealer owners operate their business for up to 3 years while about 5.3% of the dealers go beyond 5 years (Suter & Bwisa, 2013). Indeed, the generalized problem for the small individuals, in the case of auto dealership is that the business owners do not have t...