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Small Business Growth Characteristics

Author

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  • Calvin M. Boardman
  • Jon W. Bartley
  • Richard L. Ratliff

Abstract

Financial characteristics are presented for small firms whose sales increased at a rate greater than the inflation rate over the period 1974–1979. It is noted that these characteristics differ somewhat depending on whether they were a retailer, manufacturer or wholesaler. A growing small firm is generally characterized as one which increases its leverage, decreases its liquidity and incurs a heavy investment in operational assets. Interestingly, it is also shown that these same characteristics, if taken to extremes, are typical of the failed companies in the sample. The reward of growth is success; the risk of growth is failure.

Suggested Citation

  • Calvin M. Boardman & Jon W. Bartley & Richard L. Ratliff, 1981. "Small Business Growth Characteristics," Entrepreneurship Theory and Practice, , vol. 5(3), pages 33-43, January.
    • Handle: RePEc:sae:entthe:v:5:y:1981:i:3:p:33-43
    DOI: 10.1177/104225878100500307
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    References listed on IDEAS

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    1. Robin Marris & Adrian Wood (ed.), 1971. "The Corporate Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-01110-0, December.
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    1. James J. Chrisman & Alan Bauerschmidt & Charles W. Hofer, 1998. "The Determinants of New Venture Performance: An Extended Model," Entrepreneurship Theory and Practice, , vol. 23(1), pages 5-29, October.
    2. Amir Sasson, 2008. "Exploring Mediators: Effects of the Composition of Organizational Affiliation on Organization Survival and Mediator Performance," Organization Science, INFORMS, vol. 19(6), pages 891-906, December.
    3. Stewart Thornhill & Raphael Amit, 2003. "Learning About Failure: Bankruptcy, Firm Age, and the Resource-Based View," Organization Science, INFORMS, vol. 14(5), pages 497-509, October.
    4. Thornhill, Stewart & Amit, Raphael, 2003. "Comprendre l'echec : mortalite organisationnelle et approche fondee sur les ressources," Direction des études analytiques : documents de recherche 2003202f, Statistics Canada, Direction des études analytiques.
    5. Richard G. P. McMahon, 2001. "Growth and Financial Profiles Amongst Manufacturing SMEs from Australia's Business Longitudinal Survey," Entrepreneurship Theory and Practice, , vol. 26(2), pages 51-61, December.
    6. Thornhill, Stewart & Amit, Raphael, 2003. "Learning from Failure: Organizational Mortality and the Resource-based View," Analytical Studies Branch Research Paper Series 2003202e, Statistics Canada, Analytical Studies Branch.

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