Masters Theses

Date of Award

12-1991

Degree Type

Thesis

Degree Name

Master of Science in Planning

Major Professor

George E. Bowen

Committee Members

David Johnson, Joseph Prochaska, Thomas Boehm

Abstract

The primary purpose of this study was to examine small business and develop a profile of factors which affect the success rate. The secondary purpose of the study was to determine if Gannon University's Small Business Development Center (SBDC) has a better success rate than the nation as a whole.

The method of data gathering was a mail out questionnaire, and content analysis of client folders. Only those clients who received a business loan between the years 1985 and 1989 were chosen for study.

The study found that only five of the original 16 variables studied proved to be significant in affecting the success of a business. The five variables which are considered, by this study, to be factors of success are: (1) The life stage of a business (start-up, purchased, or existing). Purchased businesses showed a slight edge over the other two categories. (2) The age of the business. The average age of successful businesses was about 4 years, and 2 years for unsuccessful businesses. (3) The amount of pre-venture planning. Successful businesses planned an average of 400 hours, while unsuccessful businesses planned, an average of 263 hours. (4) The number of years as a supervisor. In contrast to other studies, successful clients had fewer years experience as a supervisor than unsuccessful clients. (5) The use of outside consultants. Clients who conferred with consultants, other than those who worked at the SBDC, had a higher instance of success than those who did not contact any other consultants. Another factor which appears to be important is clients who spoke with other small business owners for insight and advice tended to be more successful.

The second finding of the study was that Gannon's SBDC has a much higher success rate than the national average. The SBDC's clients success rate was almost 80 percent, while the national average for small businesses 4 years or younger was approximately 48 percent. It appears as though working with the SBDC does increase a businesses chances of success.

Although the findings of this study are not conclusive, good information has been gained. This study lays the ground work for future research. More research is needed on this subject to gain a fuller understanding of the dynamics of small business success and failure

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