Small Business Critical Appraisal

1.0 BACKGROUND ON SMALL BUSINESSES
Public perceptions of the small business have been influenced by politicians and theorists from the extremes of neglect and ignorance to hype and over-expectation. In the 1950's and 60's small business's were seen as out-of-date. By the 1970's and 80's they were seen as a great contribution towards the economy and by the 1990's, SME's were seen as the post to improving employment.
Record numbers of people have launched companies over the past two decades, from 2.4m to 3.7m (Appendix 1(i)) in the UK. A variety of competitive, economic, demographic shifts have accounted for this, "society depends on entrepreneurs to provide the drive and risk-taking necessary for the business system to supply people with the goods and services they need". (Scarborough and Zimmer, 2000, p. 34)
On a global comparison, the increase has a common feature across all borders. The UK and Europe have similar profiles. The USA concentrates its workforce in larger companies compared to Europe and Japan. (Appendix 1(ii)) It is worth noting the difficulty to compare as definitions vary.
The failure rate for small businesses is high; primary cause is incompetent management. Successful entrepreneurs hold a positive attitude that these are just stepping stones to success.
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