It is the first study in Missouri to take an in-depth look at the various types of operational problems entrepreneurs face when they begin their businesses and after they have been in business for a number of years.
Problems in the Beginning
Given that only about one-half of new business ventures survive five years1, and 95 percent of all businesses are small (less than 500 employees), we need to learn as much as possible to positively impact the success rate for new businesses. This study focuses on four key operational areas: finance, management, marketing, and technology.
- Finance: A sound understanding of business finance, access to capital, and relationships with lenders are integral to the success of any business. When starting a business, approximately one-third of the entrepreneurs found CASH FLOW, FINANCE, INSUFFICIENT SALES VOLUME, and PRICING GOODS OR SERVICES to be the most problematic.
- Management: In beginning their business, about one-quarter of the entrepreneurs stated that their management problems were diverse and focused on themselves (CONTROLLING MY OWN TIME, SETTING GOALS and MEASURING PERFORMANCE), their employees (FINDING/RETAINING QUALIFIED EMPLOYEES), and accessing helpful information (GETTING USEFUL BUSINESS INFORMATION).
- Marketing: The two top problems in the marketing area focus on “how to” — ABILITY TO COSTEFFECTIVELY ADVERTISE and ACTUAL SELLING.
- Technology: Technology in relationship to finance, management, and marketing was not as much of a problem area for entrepreneurs starting a business. About one-fifth of the respondents indicated SETTING UP A COMPUTER SYSTEM was a problem.
One-half of the entrepreneurs participating in this study have been in business for at least 17 years. About one-fourth have been in business between two and eight years. The problems these seasoned business owners face today are both similar and different than those they faced when starting their businesses.
- Finance: While CASH FLOW and INSUFFICIENT SALES VOLUME remain problems for many, account receivables and capital enter into the picture for one-fourth to one-third of the entrepreneurs.
- Management: Control of time and putting the right person in the right job remain significant problems for more than one-third of the entrepreneurs. In addition, the role of manager and leader emerge as entrepreneurs grow their companies placing MOTIVATING EMPLOYEES and PREPARING STRATEGIC/ANNUAL BUSINESS PLANS in the top five problems for experienced business owners.
- Marketing: At this point in the business, entrepreneurs have learned how to handle some of the foundational marketing tasks, although ABILITY TO COST-EFFECTIVELY ADVERTISE remained the number one problem for entrepreneurs. In addition, the continued need to set one’s business apart from others surfaces in that COMPETITION FROM LARGE BUSINESSES and IDENTIFYING NEW OPPORTUNITIES are the second and third most mentioned problems.
- Technology: Current technology problems reveal sophistication in the technology field and in how businesses use technology. The top problems faced currently by entrepreneurs are EFFECTIVE BUSINESS USE OF THE INTERNET, CREATING A WEB SITE, and INTEGRATING TECHNOLOGY INTO THE FIRM.
Addressing the Problems
A better understanding of the problems entrepreneurs face at varying points in their business lives provides tremendous opportunities to shape programs, products, services, and tools to meet these needs. Just as problems change over time, preferred ways of learning have also changed. The pressures and stresses of owning your own business, information overload, and lack of time
are ingredients that need to be factored into any attempt to assist the business owner whether they are starting, operating, or growing a business. We found that entrepreneurs PREFER a short, to-the-point learning format and a blended learning experience.