There is a high incidence of failure amongst Australian small businesses, particularly during the first few years after establishment. Managerial incompetence and inexperience are often pinpointed as root causes. As a consequence, a number of management training and assistance services have become available to small business owners. These include formal and informal management education programs, and services available from skilled, professional consultants and counsellors.
Despite the abundant availability, it appears that small business owners do not use these resources to the extent that many would expect.
In an attempt to explain this phenomenon, this paper:
(a) compares small business with large business, and identifies several important features which distinguish and differentiate the needs of small business.
(b) reviews the term "business failure" in the context of small business, and by review of the reported empirical works of other writers identifies the causes and symptoms of failure.
(c) discusses whether traditionally held measures of success (i.e. growth and profitability) and failure (i.e. insolvency) are congruent with the concepts of success and failure perceived by small business owners.
(d) discusses the term entrepreneur and the applicability of that concept for describing the activities of small business owners. In so doing a review is made of observed features, idiosyncrasies and personality traits of small business owners.
In the light of (a) to (d) above, an identification of the available methods for rendering management assistance to small business owners is made and the appropriateness of each method is considered.
The major conclusions of this paper are set out in Section 5.
Basically, the author believes that many of the current sources of management assistance have designed services based on observations of traditional failure. They impose concepts of success and failure on their clients which are based on measures of growth and profitability. This is a product oriented approach.
The author proposes a marketing approach be adopted. This requires an understanding of the needs and expectations of small business owners and the provision of services which assist the clients to achieve personal and business objectives, whatever these may be.