Small and medium Enterprises (SMEs) play a key role to innovation, employment, and competitive advantage. One of the requirements for growth, creativity as well as entrepreneurship in societies is to study their failure process. The purpose of this survey study was to investigate factors which affect business failure from successful versus unsuccessful entrepreneurs' points of view. Our sample includes 120 entrepreneurs in newly established small businesses who work in Iranian industry sector. Data was gathered through questioners around general themes of "immediate environment", "general environment", "manager/entrepreneur", and "corporate policy". Our findings show a significant difference between successful and unsuccessful entrepreneurs' viewpoints and also prioritize the business failure factors.
The majority of Entrepreneurship studies have focused on Business success while little information regarding Business failure exists. However our knowledge of entrepreneurship is not complete without recognition of the business failure. Also, more researches in this field have been done in developed countries and it is limited studies in those countries where economic, social, cultural and political differ. Individual factors are the main ones affecting the entrepreneurial process. This is a study on a sample of new established small businesses in industry sector. First, in qualitative study, interview analysis of 10 semi-structured interviews lead to identified four groups of individual factors including motivations, skills, capabilities, and characteristics. Then, these individual factors have been evaluated in a sample of 158 unsuccessful businesses and data analysis of 52 complete questioners pointed out that “Lack of crisis management skills” and “Lack of marketing, financial and human resource management skills” are the main individual factors affecting business failure in new established small businesses in industry sector.
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