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Small firms are an important part of a countries economy. Over 95% of all companies can be described as small, and they make a significant contribution to employment and output. Small firms may be defined as having less than 200 employees an, additionally, these characteristics: the size within the industry is small; the owners are also managers of the business; it is not part of a larger organisation
Most franchisers would come within this definition. The Rate of business failure amongst small firms is high. ... Many small firms (start-ups) will fail because the idea is just poor, and inadequately researched. ... Once in business the major reason for small firm failure is lack of management experience. ... Unfortunately for many small firms the costs of these specialist services are prohibitively high. Managerial inexperience is also the reason why many small firms fail to plan for the future. ... One particular example of a change in the environment which affected small firms particularly badly is the recession. As economic conditions have changed (worse), rising interest rates, bad debts, and falling sales have sqeezed profits (margins) many small faced with mounting losses and lacking reserves of larger firms have gone into liquidation. Another reason for the poor small business survival rates relates to the commitment of the owner manager to the business.
Approximate Word count = 995
Approximate Pages = 4
(250 words per page double spaced)
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