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Pages:
9 pages/≈2475 words
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Level:
Harvard
Subject:
Business & Marketing
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Other (Not Listed)
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English (U.K.)
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MS Word
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Topic:

Why a Business can fail during the Early Stages of Operation? (Other (Not Listed) Sample)

Instructions:

Critically analyse why a business can fail during the early stages of operation in a context you are familiar with
Created: 2014-12-01 11:10 PM Level: Degree Grade: Guaranteed 2:1 Standard (Normal Charge);
Pages: 9 Style: Harvard Country: [United Kingdom (GMT 0)]
Sources: 15 Language Style: English (U.K.) 
Project description
Subject: Entrepreneurs and Entrepreneurship
Higher marks will be obtained by:
showing that you understand the theories; applying theory correctly; providing evidence to back up your arguments; comparing and discussing different points of view; critical discussion not just description, and definitely not just regurgitating lecture notes. Draw on previous empirical studies, theoretical papers, visiting speakers, case studies and your interview with an entrepreneur, wherever relevant.
Lancaster University Management School
Institute for Entrepreneurship and Enterprise Development
Assignments: some hints and tips
The following pages contain some general guidelines on coursework assignments. As conventions vary in different countries, the various sections are intended to provide some indications as to what we are looking for in coursework assignments. They also offer guidance on structure and approach.
1WHAT MAKES A GOOD ASSIGNMENT?
A good assignment is one that addresses the question set, making use of a wide range of relevant literature and other sources to support a thoughtful discussion. It is clearly expressed and well organised, achieving a good balance between context, literatures, discussion, and synthesis of ideas, with convincing and well argued conclusions.
2BEFORE YOU START
Analyse carefully the question you have been set, looking very closely at the precise wording. Dont just focus on one or two of the words in the question. If there is more than one part to the question, make sure that you have thought about the implications of each part. It will be important that you address each part in your answer.
Start your literature search early. If you find one good article, the work which that author or authors have drawn upon (as given in their references) is likely to lead you to other useful sources. So leave yourself time to follow that paper trail.
If you are photocopying an article or a section from a book, be careful to write on it at the time all the details which you will need for the reference. It can sometimes be very difficult sometimes to remember or track back later where you got something from.
3OUTLINE ASSIGNMENT STRUCTURE
Generally speaking, an assignment will usually contain three distinct parts: a) an introduction, b) a main section containing discussion and analysis, and c) a conclusion.
Introduction
The introduction should literally introduce the reader to the assignment, by providing a context for what follows and defining the focus and approach being taken. Be clear in defining the focus and aims, ie what you are trying to achieve.
A good introduction should outline clearly the various areas which you are going to address, why, and in what order. This is where you are setting the parameters for what you are going to do. The introduction helps to make the structure and logical sequence of what follows more apparent to the reader. It can also be useful to you as you are put the assignment together are you actually doing what you said you were going to do? Sometimes the assignment may evolve in a slightly different direction from what you had first planned: if that happens, you may want to revisit your introduction and rewrite it, so that it reflects what you have actually presented (so long as you are still addressing the question effectively, of course).
Main body of assignment
In the central part of the assignment you will be drawing on academic literature to help you build and develop your argument. You should be using appropriate theoretical frameworks, concepts or research findings and other source material to help you analyse the question set, consider and evaluate different perspectives, formulate arguments and demonstrate your understanding of the issues involved.
You need to bear in mind that the purpose of the coursework assignment is to demonstrate that you have developed thoughtful insights into the topic and issues covered in a particular course. A coursework assignment which does not draw on any of the material which you have been introduced to in the course fails to do this effectively. Such material includes lectures, tutorials, guest speakers, video cases, etc, as well as your own wider research. However, you are welcome and encouraged to refer to material from other courses where appropriate to develop your arguments. This can be a valuable way of showing the links between different disciplines.
While sub-headings might be frowned upon in a conventional essay format, for these assignments it is perfectly acceptable to use sub-headings; indeed, it can be a helpful way of organising your material and signalling the structure to your reader.
Conclusion
This is perhaps the most important section, and should be substantial and multi-dimensional - not just a few lines. You need at this point to revisit the question, in order to reach some kind of overall verdict on the question. Besides providing your considered 'verdict' on the question - the outcome of your thinking, research and analysis - this is your chance to stand back and put the whole argument into a broad context.
Make sure that you do not introduce completely new arguments into your conclusions this section should serve as a pulling together of the threads of your argument it is not the point at which you introduce new material which needs fuller discussion earlier in the essay.
At Lancaster, we also encourage you to develop a habit of critical reflection; what does it all mean in the broader scheme of things? Does the theory really help in interpreting and explaining what goes on? Finally, try to say a few words about yourself and the assignment process: what have you learned and how do you think the assignment could have been improved?
4DEVELOPING YOUR DISCUSSION
Using academic literature
Reading as widely as possible in the literature should enrich your thinking and enable you to develop a more sophisticated and thoughtful level of discussion. The literature which is introduced in lectures is intended to be only a starting point for you. We expect you to go to the original sources wherever possible and to show evidence of reading beyond what is mentioned in lectures.
In any single area you are likely to find competing perspectives: sometimes the points of disagreement may be relatively slight and subtle, in other cases they will be more markedly divergent. A good assignment will review the literature as extensively as possible in relation to the question: it will compare and contrast the views of different authors, drawing out the key points of difference or agreement, considering why these may have arisen, and evaluating the merits of particular arguments. But focus on relevant theory only: theory that is relevant to your specific focus and to the arguments which you are discussing. Don't feel compelled to mention sources and frameworks for the sake of it - this probably won't earn you any more marks!
We are interested here in your ideas, too these are very important. However, you need to build a logical and convincing argument, and ensure that you do not make sweeping generalisations or unsubstantiated assertions. While that may be common and acceptable in opinion-based journalism, academic writing requires a more detached and reasoned approach. Any point you make needs to be supported wherever possible by evidence or argument from research or published studies. If you are expressing a more tentative hypothesis, for example maybe proposing an alternative perspective for which you do not have actual evidence, then it is wise to couch your language more cautiously. The use of words such as might, possibly, perhaps, etc, can be very useful.
All the sources you use should be clearly acknowledged. Use abbreviated references in the text - e.g. Storey (1994) - supported by a list of full references at the end of the assignment. We prefer that you use Harvard style referencing rather than footnotes (which can become cumb Instruction files

source..
Content:

WHY A BUSINESS CAN FAIL DURING THE EARLY STAGES OF OPERATION?
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Course:
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Why a Business can fail during the Early Stages of Operation?
Introduction
Every business establishment, either big or small is naturally defined by two diverse perspectives i.e. failure and success. Indeed, these terms are often used interchangeably, but in this paper, a negative perspective (failure) is chosen for the review of the causes or the reasons for failure of businesses at early stages. The concept of failure has received a number of definitions already, and is commonly defined either as the ownership discontinuance of a company or as the discontinuance of the enterprise itself (Everett and Watson, 1998). Above all, the concept of failure of an enterprise is elaborately defined within the context of the studied firm’s characteristics. Nonetheless, even though terms like bankruptcy can sometimes be used to describe the failure, a business that stop either operating due to withdrawal or acquisition without any liability is not apparently classified as failed. The criteria to classify an organization as either failure or successful is sometimes predicted by Banks, credit managers, and venture capitalists (Carter and Evans, 2006). Perhaps, one theory that better describes why most businesses are likely to fail is the complexity theory, for it provides a new perspective from which new businesses should be observed. The theory illustrates that the current growth of start-ups is undeniably a chaotic process, entirely distinct from the traditional methods (Tsai and Lan, 2006).
Young businesses are prevalently prone to failure in the UK, and the rate is evidently high. As established by the UK department of industry and trade, failure amongst these emergent businesses underneath the VAT threshold is predominantly high (Financialpreneur.com, n.d.). Many studies have been done to unearth the reasons for business failure especially at early stages in the UK, with small and medium enterprises in particular. The motivation for these studies as stated by Abdel Samad, is the fact that, even though the failures can never be entirely eliminated in an enterprise environment, the failure can be reduced if the underlying causes are detected early and action invoked (Everett and Watson, 1998). Conventionally, these factors causing failures are extensive and often divided two, the external and internal reasons. The external include the government intervention, support groups i.e. venture capitalists, business location, and competitor underestimation whereas internal factors include poor planning, underfunding constraints, poor financial management competence, and inadequate market research. In this paper, I will connote the above reasons why businesses are likely to fail during early stages. Poor start-up planning
Planning is one of the essential steps for successes of business, and devoid of appropriate planning only means an inevitable failure. Planning entails a well-crafted business plan which encompasses all essentials for successive business establishment. Essentially, a business plan should serve as a framework to illustrate the vision of the start-up, and also convening the subordinate to facilitate the attainment of the vision. This simply means it is as important as the idea or business concept itself and therefore should be number one priority before operating any business. Research has often indicated such poor planning as the being responsible for most companies to fail. For instance, a research by Derek and Doug established that entrepreneurs who do not have a progressive or succession plan identify the foremost barrier to business progress (UK essays, 2013). Such entrepreneurs might put all their efforts in turning a small enterprise into bigger corporation in vain unless they have a workable business plan (UK essays, 2013). The primary excuse given by most entrepreneurs is that, it is too early to plan, but over time they have been proved wrong.
According to Derek and Doug, the established that most businesses specialized advisers pointed out that it was never too early to draw a plan (UK essays, 2013).. However, research by Tsai and Lan on the complexity theory perspective about the development of start-up businesses proposes an alternative. They established that since entrepreneurs cannot easily predict the materialization of a new order, it is hard for them to institute advance plans, but instead, they can rely on company’s vision as a framework of their actions and sustain elasticity with regard to future growth (Tsai and Lan, 2006). Poor planning is also evident in the in finances and expenditures, and it always a challenge considering the meagre budget that an entrepreneur is faced with at launching. Therefore, if not managed correctly and allocated, one department may face a deficit and cause the whole business to falter.
Under funding of a business
This factor is related to planning and is another recurrent mistake that most small businesses make, by just underestimating the finances necessary for the company’s launching. Most start-ups today fall short within the first few months after establishment because either they run out of money or their anticipation to obtain credit from banks fails (Walker, 2004). This is ultimately a consequence of poor planning. A well-considered business plan will acquaint an entrepreneur with the exact amount of money required for business expenditures and how to run the company until a positive cash flow is attained (Pendrith, 2014). Lack of development of cash flow and income statements at least within the two years of business operation further heightens the chances of business failure. These are remarkable creations, as they will serve to tell if the firm has adequate funds to uphold the company till it attains the profitability (Pendrith, 2014). As held by the US department of Commerce, small business fails because they do not use the available financial information suitably. Some entrepreneurs have no cash and the only expectation is that the bank will come to their aid, and often the bag their expectation that banks will fund them based on their good innovations (UK essays, 2013). Unfortunately in most instances, banks do not buy such ideas for they consider such owners as a reflection of the inability to manage money particularly if they have no cash.
Poor Financial Management Skills
In line with financial management, one theory that concurs very well with the current state of start-ups is the complexity theory, whose perspective sustains that young businesses are dissipative constructions, and are for that reason always difficulty at attaining equilibrium (Tsai and Lan, 2006). From this understanding, financial administration becomes a vital aspect of business growth that does not only need a one-time consideration, but rather a progressive management. According to Stefan deficiency of management skills results in inadequate operational capital and other financial constraints, a major reason why business do not survive at early stages (UK essays, 2013). Consequently, as held by Mark Friedman, Real Time Strategy founder, businesses are possibly going to fail if they do not monitor the progress of the working capital in terms of accounts payable, accounts receivables, and cash at hand (UK essays, 2013).
He further acknowledges that a liquidity crisis is inevitable when business operations are going well together with cash flowing, because new business managers have a propensity of not preparing the next round success. This is simply what the complexity theory envisages; the progressive growth of start-ups is a chaotic process that demands continual fitness (Tsai and Lan, 2006). Therefore, the monitoring especially of cash flow is very paramount. As remarked in the Barclays Bank’s report on the challenges UK small businesses face, cash flow is a critical measure of a firm’s capacity to sustain adequate financing to pay for its current liabilities (Barclays bank). An entrepreneur, therefore, ought to manage the finances by developing an ample budget each time before investing in any asset or liability. Consequently, stabilisation of the cash flow will deter wastefulness and promote effective investing.
Despite most start up owners believing that money is the main necessity to a run a business, inadequacy of entrepreneurial skills has become one of the most notable cited reasons why small businesses fail. According to Paphitis, the retail magnate and a passionate advocate for entrepreneurial education, the reasons as to why most small businesses falter is because the entrepreneurs have not done research, do not know who to fund them, and general not doing their homework (Burke, 2014). Paphitis draws a comparison between academic and entrepreneurial education and states that they are not different. He further holds that the United Kingdom start-ups’ fail rate will drop if entrepreneurship in incorporated in the schools’ curriculum from age eleven (Burke, 2014). Elsewhere, Dun’s research reveals that 90% of entire business failures and shortcomings are the result of owner’s low level of managerial expedience (UK essays, 2013).
What this illustrates is that even though the owner of a business is an excellent salesperson, he may lack the proficiency to handle the apparently routine day-to-day operations to keep the company running. Business owner being deficient in of the entrepreneurial dexterity would possibly cause business to fail, particularly during the early phases of a new corporation. However, the performance start-up companies rely on a number of variables such as the owner behaviours, owner character, and ecological influence. As stated by Charles and Frank, the potential businessperson has the capacity to control, direct, or r...
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