Startup Success Trends in Small Business Beyond Five-Years: A Qualitative Research Study

Startup Success Trends in Small Business Beyond Five-Years: A Qualitative Research Study

Alvin Perry, Emad Rahim, Bill Davis
Copyright: © 2020 |Pages: 14
DOI: 10.4018/978-1-7998-1760-4.ch079
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Abstract

While entrepreneurs help to drive venture growth through business development in their respective cities, approximately 50% of new business ventures fail within the first 5 years of operation. Boss concluded that over 60% of entrepreneurs and small business owners fail within the first 6 years of doing business. This article examines some of the main factors that support early growth stage entrepreneurial sustainability for small business startups. In this article, entrepreneurship success factors, failure rates and sustainability are examined through qualitative research, expanding on factors identified in previous studies and applying them to different geographical areas. The results of this study can help reduce the number of small business failures by providing actionable knowledge to entrepreneurs in the start-up and early growth stages of business development.
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Background

The United States is currently recovering from the largest economic downturn since the Great Depression (Semoon, 2010). The government has had to step in and provide public funds to save big banks (Verschoor, 2010). The current and future economic environment may present a great opportunity for entrepreneurs to start businesses and sustain them, as there are always business problems to solve.

The issue addressed in this qualitative, phenomenological study is the high failure rate of small business entrepreneurs. All of the factors needed for success after 5 years in business was investigated. According to a report issued by the U.S. Department of Commerce (2009), 30% of startups fail in the first 2 years. Despite favorable research that may have supported small business success, the rate of failure is still rather high. Similarly, Boden and Headd (2002) noted that businesses fail 50% of the time after the fourth year of operations. The problem of small business failure has negatively affected the U.S. economy. This study may help to remedy the situation by providing new knowledge on sustainability that can reduce the number of small business failures.

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