Introduction

Barriers to market entry for small businesses include capital requirements, competitive advantage of incumbent firms, the business environment and the educational background of the owners. Once small businesses have entered the market, a number of factors might increase the risk of failure: active reorganization actions, division of operating cash flow by current liabilities, cash flow coverage of interest, operating cash flow margin, operating cash flow return on total assets and earning quality. The purpose of this qualitative interpretative phenomenological analysis (IPA) was to identify what areas of leadership and management had the most influence on small business failure.

Although researchers have found that effective management and leadership were essential for small business success, research terms have only defined these in general terms. This study's findings contribute to the literature in this field by providing a greater level of detail regarding the meanings of effective versus ineffective leadership and management in small businesses. Findings indicated that essential management and leadership skills included communication, interpersonal skills and goal setting. The findings were consistent with the 5Ps strategic direction and management model. Small business leaders and managers may use this study's findings to understand effective versus ineffective practices in beginning a new business.

The purpose of this qualitative interpretative phenomenological analysis (IPA) was to identify what areas of leadership and management have the most influence on small business failure. Ultimately, 25 participants responded to the inquiry and responded to the researcher's questions. From these responses, 10 were chosen at random. The participants, whose responses were analyzed in this study, included six males and four females in eight different areas of business. All 10 respondents derived from the greater northern Virginia area from Occoquan to Manassas. Table 4.1 shows the demographic data of the participants from this study.

Figure 4.1 offers a visual representation of the market segment where the entirety of the respondents’ small businesses operate.

This chapter addresses how findings corresponded to the topic and research questions. In addition, the researcher identifies any outliers or discrepancies that emerged during analysis. Findings of these analyses are noted below for each research question.

Results

Research question 1

How do small business owners perceive the relationship between management and leadership skills and small business success or failure? Three major themes evolved from this question, including communication, cooperation and separation of responsibilities. Table 4.2 shows the distribution of responses by the participants in this study.

Major theme 1. The first major theme was communication. Two of the 10 participants (25 percent) cited communication as the link between management and leadership skills. Both P9 and P6 cited the importance of communication for both managers and leaders. As P9 explained, communication is also a part of cooperation:

P6 also cited communication; however, this participant also explicitly pointed to the fact that managers and leaders must not only have communication skills, but also communicate among each other, as well as with their employees:

An estimated 28,443,856 small businesses in the United States employ about 56.1 million of the nation's private workforce (Office of Advocacy, 2015). The combined total revenue of small businesses accounts for more than 50 percent of the gross domestic product (GDP) of the United States (Nickels, McHugh, & McHugh, 2015). The three industries with the highest small business employment include health care and social assistance, accommodation and food services, and retail trade. The three most common industries for small employer firms across the United States include professional, scientific and technical services; other services (except public administration); and retail trade (Office of Advocacy, 2015).

While small businesses are responsible for producing the majority of the GDP, many small businesses do not survive past the first years of operation. For example, 40 percent of new business ventures fail in their first year, 60 percent in their second year and 90 percent in their first 10 years of existence (Radipere & Van Scheers, 2014). In the retail trade industry, approximately 17 percent of new business ventures fail within their first year, 34 percent in their first three years and 43 percent in their first five years of existence (U.S. Bureau of Labor Statistics, 2015).

The results of this study could help identify management and leadership skills that contribute to the success and failure of small businesses. This information could help small business owners develop a winning strategy that combines the roles of management and leadership. The researcher explored the perspectives and experiences of current and former small business owners regarding the leadership and management skills that affect the survival of small business ventures. Participants in this study included individuals whose small businesses have failed, as well as individuals whose companies have remained in business for at least 10 years. Perspectives of individuals whose businesses span a wide timeline allowed for better insight and comparison of company elements.

The researcher discusses the following details to illuminate the research topic further: (a) background of the study, (b) problem statement, (c) purpose of the study, (d) research questions, (e) advancement of scientific knowledge, (f) significance of the study, (g) rationale for methodology, (h) nature of the research design for the study, (i) definition of terms and (j) assumptions, limitations and delimitations. The chapter ends with a summary and an overview of the remainder of the proposal.

Introduction

In today's economy, there has been a shift from large business to small business operations. The Small Business Administration (SBA) defines a small business as one that is “independently owned and operated” (Nickels, McHugh, & McHugh, 2015, p. 162). Next, a small business is not a dominant competitor in its business field of operation. Finally, a business operation is only classified as a small business when it meets certain standards of size, employment and annual revenue. While a small business operation competes in the same market as large corporations, a small business will only be able to control a small portion of the total market share and revenue earned by the industry. As a result, a small business is considered “small” to the other companies and competitors in its industry.

There are currently over 28 million small businesses in the United States. The combined total revenue of small businesses accounts for “over fifty-percent of the gross domestic product (GDP) of the United States” (Nickels et al., 2015, p. 163). Small businesses in the domestic market have helped to improve the economy and quality of life. First, small businesses have generated an increase of new jobs and career paths for current and future employees in the business market. Next, small businesses are responsible for employing the majority of individuals who work in the private sector. Third, small businesses provide many employees with their first position in the workforce. Finally, small businesses are able to offer new advantages that large corporations are unable to produce by focusing on niche markets and providing a high level of customer service and response to new opportunities in the market.

While small businesses are responsible for producing the majority of the GDP, many small businesses do not survive past the first years of operation. This situation is due to many factors. First, small businesses can close in order to change business types that will cause the existing business to technically be reported as a failure. Next, a small business owner can decide to leave a small business in order to pursue a new opportunity in the market. This situation will also result in the failure of the existing small business. Third, the small business owner can choose to retire. As a result, the small business is unable to live past the life span of the individual and will fail.

Introduction

The global economy is now primarily composed of small businesses. This situation is due to the large corporation's inability to meet the dynamic and changing needs of the market and global economy. While large corporations are able to provide some stability in the business market, small companies have the ability to offer customized goods and services in new niche market segments. Small businesses currently produce approximately 80 percent of the new jobs within the United States and the foreign markets. Next, small businesses help to improve the economy by increasing the employment rate and to offer individuals new employment opportunities and growth in new industries.

Individuals have become entrepreneurs and have started small businesses based on their new innovative ideas for goods and services. The estimated 28 million small businesses in the United States employ about 56.1 million of the nation's private workforce and account for 54% of all U.S. sales (Office of Advocacy, 2015). While small businesses have grown to produce more than half of the gross domestic product (GDP), the majority of small businesses fail within the first five years of operation. The main reason for the high failure rate of small businesses is the owner's inability to perform both the management and leadership roles in each key aspect of the daily business operation. The small business owner suffers from limited business knowledge, experience and financial resources that are successfully required to compete in the global market.

Since small business owners are required to invest their working resources in sustaining their business operation, they have a limited amount of time and capital remaining to earn a traditional business degree or attend any form of leadership and management training that is required to help them become proficient in all aspects of the business process. In order to help small business owners succeed beyond the five-year benchmark, a leadership and management resource guide that enables the business owner to gain the necessary on-the-job training and resources is required to ensure the success of their business.

The complete management and leadership resource guide (CMLRG) for the small business owner will provide a new paradigm that will enable the small business owner to receive the same education and business knowledge as a traditional degree program but at a fraction of the time and cost.

Introduction

The purpose of this qualitative interpretative phenomenological analysis (IPA) was to identify areas of leadership and management that affect the success and failure of small businesses. The results of this study might help new or future small business owners improve their management processes and leadership methods to achieve success. This chapter details the methodology followed in the conduct of the study. Specifically, the chapter contains specific information on the procedures the researcher followed in the recruitment of participants, data collection and data analysis. The chapter also contains details on the researcher's role in the study, the instruments used and the steps taken to ensure ethical responsibility.

The researcher identified the IPA research approach as the most appropriate and suitable design. In IPA studies, the researcher aims to develop a deep understanding of the meanings that individuals attach to specific experiences from their own perspective (i.e., description and interpretation; Gill, 2015). IPA researchers focus on creating a highly detailed idiographic account through the participants’ own interpretative description of experience (Gill, 2015; Pietkiewicz & Smith, 2014). This researcher recognized the uniqueness of the contexts and circumstances of each business owner; thus, the aim of this study required an idiographic account, not a nomothetic solution to the issue of business success and failure.

Specifically, the researcher utilized the IPA approach to address the following research questions:

R1. How do small business owners perceive the relationship between management and leadership skills and small business success or failure?

R2. What do small business owners identify as management problems that lead to success or failure?

R3. What do small business owners identify as leadership problems that lead to failure?

R4. How do small business owners perceive the need for management and leadership skills to succeed in the small business arena?

Small businesses include independently owned and operated companies, which are not dominant competitors in the business field of operation. The specific phenomenon or issue investigated in this study included the high failure rate of small businesses in the United States. This phenomenon was investigated through the phenomenological research tradition, which emphasizes individual's interpretations of experiences and the creation of meaning based on such interpretations (Reiners, 2012).

The complete management and leadership resource guide (CMLRG) for the small business owner will provide a new paradigm that will enable the small business owner to receive the same education and business knowledge as a traditional degree program but at a fraction of the time and cost. The CMLRG will enable the small business owner to gain a complete understanding of each business function and how each function will be impacted by both the shortterm management and long-term leadership decisions of the small business owner. The small business owner will be able to simultaneously perform the dual roles of a leader and manager that are required to compete in today's global market with the new resource guide that is designed to give the individual a competitive and strategic advantage over the competitors in the market.

The CMLRG will use new training and course modules that will define the major topics, goals and objectives of various key areas that include accounting, business law, economics, entrepreneurship, ethics, financial management, human resources, management principles, marketing, organizational behavior, planning, statistical and quantitative analysis using asynchronous learning. Asynchronous means that “things are happening at the different times” compared to traditional synchronous learning where things happen at the same time (Vai & Sosulski, 2016, p. 14). An asynchronous learning method will enable the individual to access the material from the various modules at any point in time. As a result, the small business owner will understand these multiple aspects of operating a small business from the perspective of both the manager and leader in order to develop a unique strategic plan that incorporates the principles of management and leadership. Each of the unique modules will include a description of the business function, general purpose of the function and objective for the role of the management and leadership responsibilities of the small business owner.

Each module is designed to help the small business manager to gain a detailed understanding of the specific business function. Once all of the modules are completed, the small business owner will then be able to complete a comprehensive strategic audit for their company. The strategic audit will enable the individual to gain a detailed management and leadership understanding of each business function. This small business owner will then be able to combine their knowledge and to develop a strategic audit that is designed to help their individual small business.