Caused of Small Business Failure: The Lack of Action

Problem Statement

The movement toward entrepreneurship is increasing each year. Currently, there are approximately eight million entrepreneurs in the United States , according to the Small Business Administration. Out of those, approximately 50-80% of them fail within the first five years of operation. 99% of all businesses in the United States are small businesses. Furthermore, these small businesses employ over 56% of our workforce. Even in a tough economy, entrepreneurs are responsible for a major portion of new jobs created. In addition to the tangible numbers, entrepreneurs are historically responsible for the power of the American economy by their innovations from the automobile to the telephone. Yet, most schools and universities do not teach entrepreneurship. At most, some leading universities are offering a few courses on traditional entrepreneurship based on old texts and belief systems that are out of date. Similar to the current challenges of bad management that deny moral and social responsibility, the theories of entrepreneurship are also out of date and take their part in causing the high failure rates of small business startups.

Significance to Humanity

In a previous study in 2004 titled “Knowledge required to achieve entrepreneurial success”, multiple analysis reveals a specific set of knowledge and behaviors that are consistent amongst entrepreneurs. At a further review of the evidence, a new revelation revealed itself. Could it be that the knowledge require is consistent amongst entrepreneurs on a theoretical level, while the action taken and the behaviors are different?

For many years, researchers have reviewed the various aspects of entrepreneurial theory such as Entrepreneurial Orientation (OE) by Lumpking & Dess. Regardless of how the theoretical knowledge is dissected, the failure rates are still high in small business startups. This study intends to further understand the linkage between the knowledge that entrepreneurs possess and the action that may or may not occur based on that knowledge.

Systemic Solutions Perspective

If the hypotheses of this study are proven, one could speculate a conclusion that the separation between knowledge and action is the cause of failure. This would be an extension of the belief that traditional educational models stress a separation between school and real life. Most schools assign homework that is meaningless to individuals and fail to show how it can be applied to everyday life. Thus, most students remember very little from traditional educational systems.

In order to reduce the failure rates, a simple ... for more information, contact Dr. Sun directly.

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