Reasons for a Failure of a Business Venture - Dissertation Example

It has been a tradition in many cultures and thus past precedence that the trade of a father would be passed on to the son or other person interested in learning that skill. The ancestors of the United States were all apprentices at some point; learning the skills necessary to run a cotton plantation, become a blacksmith, a carpenter, a cobbler, or even a milliner (Levinison, 2011). Some families even bartered for their sons to be placed with the best tradesman in the community when the child was very young. Some children were placed into indentured servitude, which in the end taught them to trade in exchange for their room and board and a few coins being offered to the parents. With the introduction of the Industrial Revolution, many of the old trades were forgotten as more people when to work in factories and on assembly lines. The factory jobs and assembly line work did not teach the trade as a holistic venture, but only a small portion to one person and another portion to someone else further down the line. It was easier for businessmen to accumulate vast wealth if they had many people doing various jobs that would create mass production of a product rather than one person completing the production of a single item from start to finish.
Machines were invented that replaced the worker and the production rate continued to increase in larger quantities than any human could have accomplished. Those individuals who were interested in the repair of the machines found work alongside the very thing that had excluded them from the workforce. Those who did not fancy the maintenance aspect of the industry were required to seek employment elsewhere. Going back to the basics of owning a business seemed to be the answer for some, but the skills and knowledge necessary for a successful venture was lacking, as the trade had not been passed down from the previous generation. Wacker (1998) discussed how this phenomenon provides the necessary parameters for the study of entrepreneurship in the existing world. By looking at the variables, the relationships within the business, and the underlying factors, the foundation for entrepreneurial ventures was recognized.  Careful analysis of the business world uncovered the basis for further study and opened the channels for a scientific theory to be considered in future studies (Henderikus, 2007; Henderikus, 2010).
The Small Business Administration Report in 2007 claimed that 2/3 of every new business venture failed within the first two years. Half are reported to fail within the first four years and over 58% fail within the first five to ten years. The reasons behind the failure of these business ventures encompass a variety of factors that change with each entrepreneur.  Finding a way to combat this excessive failure rate could open the door for more successful businesses and a stronger economy through entrepreneurship across the United States. Entrepreneurs who took over a family business operated differently from those who had received training to become business owners (Parker & Praag, 2010). The individual in the family business usually lacked formal education but had a wealth of business education through growing up participating in the business at various levels of production. The individual who received a business education was more inclined to start their own venture rather than acquire someone else’s business.