It is a process that includes collecting and analyzing data, then using that knowledge to develop a business plan.
Plans can range from those with the most minimal structure through to very comprehensive and detailed, long-term plans. Bracker and Pearson propose a four-level classification: 1 unstructured plans, 2 intuitive plans, 3 structured operational plans and 4 structured strategic plans. Although several studies have shown strong positive links between planning and business success e.
However, although most would agree that planning can be beneficial, there is an emerging view that the value of planning is context-dependent and that its benefits may differ across contexts Castrogiovanni, ; Mintzberg, A chronic problem facing many small businesses is the lack of funds to establish them on a sound and stable financial footing. Initially, a business's capital may be limited to what its owners can raise from savings, mortgaging the family home or borrowing from relatives etc.
Different studies observed the importance of financial issues for new and existing entrepreneurs Sullivan et al ; Lussier, Robert N. Here some factors are more concentrated by previous researchers, namely: a-economic factors, b- government support, c- Social support d- Information factors and e- informal factors.
The vast majority of new micro and small businesses are initialized in the localities in which their founders already live, and the chances of success are closely related to the geographical location Sullivan et al ; ; Lussier, Robert N.
In addition, in geographical areas of high large-plant-industries there tends to be a lack of suitable start-up premises for micro and small businesses. Thus, business start-up is likely to be greatest in areas which are low in large-plant-industries and which have a high small business populations already established.
These included previous population growth, capital availability through housing wealth, local enterprise cultures, and professional expertise. Local market demand also has a degree of influence, although this is less important in determining survival and death rates in micro and small businesses. It is realized that small business has a greater role in economic growth. Therefore, the government should help entrepreneurs to start new business and protect them to continue the business.
The government can stimulate private business development and employment growth by fostering an "enabling economic environment". This means minimum regulations; fair, broad-based taxation as low as feasible and simple for compliance; liberalized trade both domestic and external, and helping to create a financial sector with easier access to funds for all businesses. The government should also make available funds along the lines of the social fund mentioned above , including lines of credits for small business loans to mitigate the damage to businesses and of employment losses created by policy reform and restructuring.
The government should act as a facilitator -- a provider of resources -- for support and advisory centers, but not as a direct provider of services. The government is also responsible for creating the physical infrastructure -- roads, power, water, transport links, telecommunications, industrial land, estates and incubators -- and basic skills training and satisfactory education at all levels.
Without these, the private sector cannot flourish. It is important to recognize that the provision of some of the above facilities may be the responsibility of local or regional authorities as well as central government.
The decentralization of support services and the encouragement of regional and local initiatives are desirable and usually more cost-effective Tawney, C and Levitsky,J. A study in Russia observed that existing practices in the areas of registration, inspections, licensing, and certification are very far from the benchmarks established in the new Legislation CEFIR and the World Bank, The availability of social support can be a significant factor in the ability of small business owners to cope with the barriers and difficulties they face during the initialization of a new enterprise.
A lack of family support places small business owners at a serious disadvantage and this is especially destructive for those who have heavy family responsibilities, responsibilities that generally fall on women. This results in female entrepreneurs working significantly fewer hours than their male counterparts Chay, and the effects of this on business growth can be clearly seen, with women operating smaller businesses than men Loscocco et al, The research showed that access to information to know the market behavior, analysis the demand and supply of products and services are in high priority for small business managers.
Those who have a greater understanding of the industry or market tend to have more favorable perceptions of the value of the opportunities they encounter and their ability to utilize those opportunities Lussier, Robert N. In order to develop a theoretical framework for this study we focused on some important factors.
Based on the review literature, theories of Total quality management, entrepreneurs theories and also our explorative interviews with knowledgeable official staff and entrepreneurs we developed a framework.
In facts, same as Wilken we assume that Individuals pursuing a new business venture go through three stages of entrepreneurship, namely raising idea, start-up activities and finally, activate the business. There are many factors, which influence the formation of a new business venture and its subsequent success or failure.
Both the external and internal environment of the small business will effect the first idea of developing a business. The initialisation and first year of a new business are critical stages in determining the success or failure of a new business. If they are could make a reasonable compromising , they successfully will continue their business. Meanwhile in order to survive they are supposed to struggle hard with different external, internal and compromising activities.
If they could come over the raised problems they will survive, otherwise they would go bankrupted. The success or failure of a businesses is often dependent on overcoming a series of potential barriers, e.
Yet in light of the substantial growth in self-employment, there has been little research into the experiences of successful and failure small businesses and many questions remain unanswered. To date there has been no systematic study of this group in the Ahvaz, which is one to the industrial and big city in the state of Khozestan in Iran. The preliminary study about the subject revealed that although the entrepreneurs in small industrial business in Ahvaz city are active in relatively similar environment but some of them after a while get bankrupted.
This is the question why some of the entrepreneurs are successful but others are failed in continue their business. For the purposes of this research, small business was defined as independently owned and operated businesses employing fewer than 50 employees. For measuring entrepreneurs successful in business there are a numbers of methods such as:, net profit after tax reduce, amount of tax paid during the last three years, rate of productivity input-output ratio , current assets ratio ratio of current assets to current debt , keep working since three years ago and active in the business, increase products, services and sale, increase business capital.
In this study due to the difficulty of access to all those information and data, we use the last three indicators for measuring the performance of small business. H successful entrepreneurs have better developed human resource indicators than failure entrepreneurs. H successful entrepreneurs have more suitable financial situation than failure entrepreneurs. H successful entrepreneurs have well organized and structured than failure entrepreneurs. H successful entrepreneurs have lower effected by informal issues than failure entrepreneurs. The methodological design of this investigative project was determined by the absence of any previous research into the experiences of small businesses, based in the Ahvaz city and khozestan province, during the initialization, start-up process and getting benefit.
Journal of Occupational and Organisational Psychology. Now, get your business legally squared away 9. You will need to learn how to work with all kinds of carpet fabrics, from synthetic to wool carpets. The profits they make are what fund the business. In spite of a number of research which has attempt to discover if there are any clear characteristics which distinguish small business owners the general conclusion appears to be that there in no simple pattern, but a complex set of interrelated factors that increase or decrease the probability that an individual will become the owner of a small business, and whether or not that business will succeed or fail. The due dates are April 15, June 17, September 16, and January 15 of the following year. Home office expenses: The portion of your home you specify as a home office must be your primary place of business and used regularly and exclusively for work.
A quantitative and qualitative approach was used to identify the needs of such individuals, the barriers and problems they had encountered, the means by which they had overcome such difficulties, and the sources of support available to them. Based on the findings of an extensive literature review, in-depth open-ended interview questions were developed and a preliminary investigation was conducted with a random sample of small business in the Ahvaz city The findings of these in-depth open-ended interviews, in conjunction with the literature, were used to design a preliminary questionnaire and interview.
A researcher based questionnaire to guide the data collection process were developed around four areas: 1 personal information of entrepreneurs , 2- employees information sex, age, education and skills level, way of selecting employees, employees training , 3- correct situation of company their customers, assists, facilities, and 4- main factors effected their performances With slight variations, this set of guiding questions served as the basis for developing instruments for interviews.
These guiding questions were pilot tested with a sample of 30, and further feedback was obtained from an advisory group in terms of content and wording.
The modified versions for each of the instruments used to conduct interviews with various small businesses. All small businesses are categorized in 19 group based on the International Standard Industrial Classifications of all economic activities for Iran Economy. We have done 14 semi-structured interviews with the entrepreneurs. General Director of industry and his chancellors in Khozestan state. Direct Observation also conducted to familiarize researchers with the contextual circumstances of the setting.
A team of two researchers conducted all site visits. Prior to each interview, participants were informed about the purpose of their participation, the nature of the inquiry, and the intended use of the information. To stimulate rapport neither between interviewers and interviewees, and to encourage candid sharing of experiences, all participants were assured confidentiality of their input, and no identifiers of particular sites, staff, nor of any of the participants in this study is used in this report.
Interviews were tape recorded with the verbal consent of the participants.
At this point, personal notes were taken to describe particular characteristics and further complement the information gathered on the site. After site visits, the visiting team compared notes and exchanged observations on the characteristics of the site and events of the day to begin developing patterns in light of the questions guiding the case study design. Finally 67 questionnaires were collected but some of them were incomplete so that we chose 53 fully completed one. We put the entire questionnaire into the SPSS program and analyzed them in terms of our hypothesis.
In relation to the first three hypotheses the results revealed that among the management skills Human relation skills, Technical skills and Conceptual skills there was a significant relation between successful and failure entrepreneurs. The results of three related hypothesis are summarized in table 1. As the table 1 shows both successful and failure entrepreneurs were agreed that weakness of technical and conceptual management skills are negatively affected the performance of their business. Table 1: results of Hypothesis related to managerial skills of entrepreneurs and their firms performance.
To test this hypothesis we aggregate variables such as: education of small business managers, their major field, first job or second job, relation between their education and business activities, previous experience of managers in relation to their business. Results of t-test for independents groups revealed that there is a significant differences between successful and failure entrepreneurs.
Table 2 : results of hypothesis related to general abilities of small business managers entrepreneurs and their company performance. Table 3 : Education level of Small Business Managers and their company performance.