The Problems Experienced by Young Firms

Abstract

PROFESSOR STANLEY CROMIE IS director of the Centre for Management Education at Ulster Business School, Northern Ireland. In this paper he surveys the literature on the failure of small firms and argues that there is a need to focus attention on those factors which contribute to the demise of male and female owned firms in the 'demarrage' phase of the development. To add to knowledge of this topic he interviewed 34 male and 34 female proprietors of four year old firms and questioned them on the problems they encountered in their early years. Results indicate that problems occur principally in the areas of finance, marketing and the management of human resources. In addition, entrepreneurs experience some difficult personal problems. Women incur a few gender specific problems during the launch of their firms but thereafter gender ceases to be a specific issue; both sexes face the same kind of problems. The paper concludes by noting that while training interventions, which focus on finance, marketing and the management of people, may well improve the chances of survival of young organisations, attention must focus on organisational diagnosis to determine where interventions are likely to succeed and on the process by which trainers assist entrepreneurs.