A Discourse on Entrepreneurial Discontinuance, Failure Rates, and Failed Business Models

Abstract

Start-ups and micro, small, and medium-sized businesses (MSMEs) constitute the backbone of both developed and developing economies worldwide. However, start-ups and MSMEs in certain regions have not achieved the required level of contribution and has a high failure rate globally. To protect a new or existing firm, it is vital to understand what causes business failure and how each barrier may be controlled or avoided entirely. The purpose of this paper is to discuss concepts and causes of entrepreneurial discontinuance, start-up failure rates, and failed business models in order to showcase how they are hindering the growth of start-ups and MSMEs, contributing to their failure. By assessing the failure rate of MSMEs in developing economies, this paper highlights the potential of MSMEs and its prominence in economic growth, development, and diversification.