Small Business Success or Failure

Name: Small Business Success or Failure
Author: William Smith

Discover what makes or breaks a small business.

Preview the first lesson free — get full access to all 3 lessons.

Course: On-Demand

Why do some small businesses succeed and why do others fail here? Here we'll address the many factors that influence a small business' success or failure as well as the five stages of small business growth. Small businesses in both the United States and around the world make up the majority of businesses. Over 99% of businesses in America are classified as small businesses. Their economic impact is far reaching and a testament to the economic power of small business. 2020 statistics from the United States Small Business Administration show that nearly 60 million U.S. workers are employed by small businesses. With the vast majority employing between 1 and 19 employees. According to the United Nations, globally around 70% of workers are employed by small or medium-sized businesses. And around 50% of gross domestic product for developed countries is generated from small and medium sized businesses. A Harvard Business Review study researched small businesses and compiled a list of stages that most small businesses tended to go through, regardless of the product or service they provided. These five stages are existence, survival, success, takeoff, and resource maturity. In the existence stage, the business has been in operation for a short period of time and is mainly focused on bringing customers in to drive revenue. Many small business owners are preoccupied with the day-to-day requirements of staying in business, concerned with being able to grow their company and are acquiring resources for expansion. Owner usually accomplishes the business' tasks and expenditures are kept to a minimum to help keep cashflow positive. In the survival stage the business has proven that its concept is sound and it should be successful if it continues to make careful decisions. The relationship between revenue and expenses is critical in this stage. And a small business owner has to make wise decisions when it comes to managing revenue and controlling expenses to stay above their break even point. The success stage is usually pivotal for the small business owner. By this point, the business plan should be able to sustain itself if nothing unexpected happens. And the owner is recommended to try and figure out whether or not the business is going to remain at current levels and generate constant revenue, or if they have to reinvest profits for the sake of growth. The take-off stage is one that many business owners struggle with because it can generate issues that a poorly developed business plan can't address. By this point, the business owners should have access to cash, credit and suppliers. That way when the take-off stage happens, they're in a position to keep up with the growth. A period of intense growth can cause customers to leave in search of other products if the business doesn't have the resources available to keep up with the demand. A business must rely on suppliers for their product. And if the business only has one supplier, it creates a supply chokehold that leads to loss of revenue. The resource maturity stage, the business has proven that it can generate revenue and positive cashflow to keep a flow. By this point, the owner might now have a management team and staff who run the business according to a strategic plan. The business has its own culture and identity, and sometimes it can be separate from what the business owner created. The business can continue to follow its strategic plan and monitor outside factors, such as competition, the political environment and regulation.

Beginner Provider : William Smith 3 Lessons · 10m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

These lessons cover the basic stages of small business growth. They provide background information about the financial impact that small businesses have on the United States and globally. They also address the reasons why some business organizations fail and others become successful contributors to their local communities.

What You'll Learn

Identify the five stages of small business growth
Explain the reasons why some small businesses fail
Examine why some small businesses manage to succeed
Describe the financial impact small businesses have on the United States and globally
Recognize how successful businesses become contributors to their local communities

Key Takeaways

Small business growth progresses through five basic stages.
Some business organizations fail while others succeed for identifiable reasons.
Small businesses have a measurable financial impact on the United States and globally.
Successful small businesses can become contributors to their local communities.

Frequently Asked Questions

What does this course cover?

It covers the basic stages of small business growth, the financial impact small businesses have on the United States and globally, and the reasons why some business organizations fail while others succeed.

What will I learn in this course?

You will learn the five stages of small business growth, why some small businesses fail, and why some small businesses manage to succeed.

What lessons are included?

The course includes three lessons: Five Stages of Small Business Growth, Why Small Businesses Fail, and Why Small Businesses Succeed.

Who is this course for?

It is for anyone seeking background information on small business growth and the factors behind business success or failure, including the financial impact small businesses have locally and globally.