Explanation of the factors that might influence an entrepreneur's decision to start up another new venture following the failure of their business

Résumé du document

Each year in the United Kingdom over 300 000 businesses have set up, and 300 000 have closed down. Half of these new businesses cease trading within three years of being created, lowering small businesses average life down to five years.
Among the failed businesses, only 10% close involuntary due to bankruptcy, and the remaining 90% close because the business was not successful, did not provide the return on investment desired, or was too much work for their efforts. Those shut-downs often put owners in difficult positions, mainly when they have resorted to borrowings, and have opted for unlimited liabilities status. As well as its devastating financial consequences, small business failure affects entrepreneurs' self-confidence and well being. Moreover, these impacts do not simply concern those who are responsible for the business; they have also serious effects on their families and relatives. Furthermore, those who decide to launch a new business following the shut-down of their enterprise, often tend to be considered with distrust, and face great difficulties to finance their new projects.

Extraits

[...] Explanation of the factors that might influence an entrepreneur's decision to start up another new venture following the failure of their business Each year in the United Kingdom over businesses are set up, and close down. Half of these new businesses cease trading within three years of being created, lowering small businesses average life down to five years. Among the failed businesses, only 10% close involuntary due to bankruptcy, and the remaining 90% close because the business was not successful, did not provide the return on investment desired, or was too much work for their efforts. [...]

[...] They have favored outsourcing to fulfill the fluctuating demand of clients (Betchermen, 1994). This phenomenon has principally touched branches such as maintenance, call centers, or security, and has created new markets for small businesses. The second push factor is the difficulty for entrepreneurs who failed to find a job in the labor market. A report on the global entrepreneurship monitors (Levie et al 1999) which included interviews of thirty-nine experts in entrepreneurship confirmed that statement, as ten of them believed that failed entrepreneurs were unemployable. [...]

[...] The last main factor encouraging entrepreneur's decision to start a new venture is the advantage of the entrepreneurial status. Individuals seek more and more to be their own boss, and to organize their timetable or their work themselves (Aronson, 1991). Those aspirations come from the predominance of values centered on individuals, and correspond to four of the five anchors identified by Schein in 1978. Those career anchors describe constellation of self perceived attitudes, values, needs and talents that develop overtime, and which when developed, shapes and guides career choices and directions”. [...]

[...] Indeed, entrepreneurs can be compared with gold diggers who seek business ideas and set up new ventures whatever the risk until they get rich. They often fail but sometimes end with a success. This phenomenon can be best summed up with the life of Oscar Levi Strauss, who headed for the gold mines of California in hopes of gold and glory but found none, and began selling his famous pants to the miners that were succeeding. This need for financial rewards has been reinforced during the past years with the impressive and dazzling success of web entrepreneurs such as Mark Zuckerberg who created the fifteen billion dollars web site Facebook, or Larry Page and Sergey Brin the founders of Google one of the biggest Nasdaq firms. [...]

[...] (2000) : Strategic Entrepreneurship, FT Prentice Hall. Articles and Publications -Landier, A. (2004) : Entrepreneurship and the Stigma of Failure, Stern School of Business. -Cave, F. Eccles, S. And Rundle, M. An Exploration of Attitudes to Entrepreneurial Failure -Beaucage, A Laplante, N. And Légaré, R. [...]