We Have Met the Enemy, and He Is Us

Last Updated Apr 11, 2011 8:14 PM EDT

Nearly two-thirds of small business owners ranked economic uncertainty as the worst of 13 threats to their survival in a new survey from the National Small Business Association. After that, according to the survey, small business owners felt most threatened by a decline in customer spending, cost of health insurance benefits, regulatory burdens and taxes.

What's wrong with this picture? Not one of the threats was internal. All had to do with outside forces.

So do business owners give enough credit to internal factors such as poor planning when it comes to the threats to their prosperity? Probably not, according to a study published in the International Entrepreneurship and Management Journal. In that 2009 report, a pair of European researchers said, "Even though some owner-managers showed a certain awareness regarding their internal weaknesses, many problems such as lacking strategy and vision, low educational levels, and inadequate social capital are not sufficiently recognized."

A pair of Belgian researchers at an entrepreneurship research conference in 2010 offer a little closer examination of management weaknesses leading to failure. This report found five major causes for flat-lining among small firms: abrupt external events, failure to serve corporate interests, apathy, specific management errors, and recurrent management mistakes.

This isn't to say that all bankruptcies can be blamed on the business owners. Sometimes success just isn't in the cards. And risk-taking can't be avoided. It's hard to fault someone for expanding rapidly before an unpredictable downturn, for example.

But you can fault them for not recognizing how they've contributed the problem. Organizations like NSBA may see taxes, regulations, access to capital, small business contracting setasides, and other outside entities as the issues to focus on. Small business owners themselves need to keep an eye on the mirror as well.

Mark Henricks has reported on business, technology and other topics for The New York Times, The Wall Street Journal, Entrepreneur, and other leading publications. You can learn more about him at The Article Authority. Follow him on Twitter @bizmyths.

Image courtesy of Flickr user orphanjones, CC2.0

  • Mark Henricks

    Mark Henricks' reporting on business and other topics has appeared in The Wall Street Journal, The New York Times, The Washington Post, Inc., Entrepreneur, and many other leading publications. He lives in Austin, Texas, where myth looms as large as it does anywhere.

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