AGE

According to JPMorgan Chase Institute (2019), a small business owner's age has an impact on
business success, but each demographic factor seems to present different statistical
trajectories. The effects of gender on small business performance are fundamentally different
from the effects of age. While firms with younger owners snowball but exit quickly, firms with
female owners are stable but grow slowly. By knowing this information, small business owners
or soon-to-be small business owners can better understand their unique challenges. (JPMorgan
Chase Institute, 2019)

Eitel, B. (n.d.). How Gender and Age Impact Small Businesses Today | Lendio.
Www.lendio.com. https://www.lendio.com/blog/gender-age-impact-small-
businesses/#:~:text=The%20researchers%20found%20that%20the%20gender
%20and%20the

In the study, Gender, Age, and Small Business Financial Outcomes, published by Diana
Farrell, Christopher Wheat, and Chi Mac (2019), companies founded by people over 55 were
more likely to survive for more than three years, even though the businesses might be smaller.
Young business owners start 1/3 of new firms, and these firms rapidly grow if they survive. On
the other hand, new firms founded by older business owners are more likely to survive, but they
may not be as dynamic: they grow more slowly and are the least likely to hire employees. The
researchers theorized that older founders might have had savings that could better handle the
cash flow crunches that often tank newer small businesses.

Farrell, D., Wheat, C., & Mac, C. (2019, February 7). Gender, Age, and Small Business

Financial Outcomes. Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?

abstract_id=3355526

Entrepreneurs’ confidence in the future decreases with age. 64% of entrepreneurs

between the ages of 18 and 25 are confident or very confident, compared to 54% of those
between the ages of 55 and 65. As age increases, confidence in the success of one’s own
company decreases. The youngest entrepreneurs are 20 points more confident in their success
than their elders (Schwab, 2021).
https://www.intotheminds.com/blog/en/effects-age-business-creation/

It is clear that an owner’s age can have an impact on how well their company
performs. You can also remark that a person’s age reflects their experience, which implies that
their age influence how they think and how they decide in a workplace.

NATURE OF BUSINESS
According to the study conducted by Indeed Editorial Team (2020), it's important to
put careful consideration into the type of business structure if planning to have or considering to
start up a new business venture. For example, consider what is high in demand products or
services for the target market in order for the business to have its good run and avoid
bankruptcy.
https://www.indeed.com/career-advice/career-development/types-of-business
It is important to choose the right type of business entity because it will serve as the
basis for the operation of the company in terms of management, financial arrangements,
taxation issues, and protection from liabilities. In other words, not considering the types of
business entity will definitely put the said business at risk (Tamplin, 2022).
https://learn.financestrategists.com/finance-terms/business-entity/
According to Bureau of Labor Statistic (2019), there are instances that the failure
rate varies according to the types of business. In other words, ocassionally, economic factor is
not solely the reason why some businesses fail, it is the nature of business itself that put the
business in distressed.
https://www.freshbooks.com/hub/startup/what-percentage-of-businesses-fail-first-year
As it turned out in above-stated related literature and studies, it states that business
failure on small businesses actually vary depending on the types of business they have. The
more high in demand that the business offers, the more profit the business will gain.

ESTIMATED CAPITAL
Capital is the money businesses use to finance their operations. The cost of capital
is simply the interest rate it costs the business to obtain financing. Capital for very small
businesses may just be credit extended by suppliers, such as an account with a payment due in
30 days. For larger businesses, capital may include longer-term debt such as bank loans, or
other liabilities (Carlson, 2019).
https://www.thebalancemoney.com/cost-of-capital-for-a-business-393132
 To safeguard a new or established business, it is necessary to understand what
can lead to business failure and how each obstacle can be managed or avoided altogether. The
most common reasons small businesses fail include a lack of capital or funding, retaining an
inadequate management team, a faulty infrastructure or business model, and unsuccessful
marketing initiatives (Horton, 2022).
https://www.investopedia.com/articles/personal-finance/120815/4-most-common-
reasons-small-business-fails.asp
Accurately estimating the capital required to start a company is critical because
running out of capital can cause the company to fail in its very early stages. With careful
estimates based on sound assumptions, the chances of a cash shortfall are reduced (Chron,
2021).
https://smallbusiness.chron.com/estimate-start-up-capital-starting-business-1859.html
With all the studies being conducted, it state that capital has a huge role in every
small business for the reason of it is the key why businesses were able to operate. It is visible
that lack in capital or funding is quite one of the factor that affect business operation in a way
that it can not acquire necessary resources for business to continue its operation.

LOCATION
According to Entreprenuer Media, Inc (2022), research reveals that the location
of a business is one of the most important factors contributing to its success. It plays a crucial
role in the way a business is perceived by the audience or customers. Businesses most often
fail because of poor management, but sometimes choosing the wrong location is a factor.
https://www.entrepreneur.com/encyclopedia/location
Location plays a huge role in attracting and retaining the best employees, many
of whom keep a close eye on where they’re based in order to optimize work-life balance. Good
location decisions can significantly boost a company’s long-term performance. Poor ones can
cost millions in lost talent, productivity and capital (Lasalle, 2022).
https://www.us.jll.com/en/views/seven-reasons-location-important#.Yz9zsdFW784.mailto
Location is the unofficial “make or break” point of a small business. The
importance of location depends on the type of business for example, if the business is
restaurant, consider downtown location that have a parking space and consider a clean
surroundings. A bad location can cause the business to fail because of low demand of
costumers due to location inconveniency while a good location can help give the business that
extra edge it needs to be successful because first hand it is accessible, good, comfortable and
ideal for everyone (Isidro, 2014).
http://www.powerhomebiz.com/starting-a-business/open-a-business/finding-the-right-
location-for-your-small-business.htm
It was clearly evident that location plays a vital role in a business. According to
different studies using different research instrument, it shows that choosing a bad location for a
business could significantly increase the chances of business to fail. Inaccessible and
inconvenient area for the target market will cost nothing but a negative impact on sales that
potentially can lead to business failure.

YEARS IN OPERATION

The result of the analysis showed that age negatively affects firm’s performance. As firms get
older, benefits of their accumulated knowledge in all crucial aspects of the business
(technology, supply channels, customers relations, human capital and financing costs) become
overcome with their inertia, inflexibility and osseous by accumulated rules, routines and
organizational structure.
Microsoft Word - 618681-fo (ibimapublishing.com)

Most small businesses take at least 2 to 3 years to be profitable and become

truly successful once they’ve hit the 7 to 10 year mark. Most small businesses take years to be
successful, despite the overnight success of companies like Facebook. Statistics show that
successful small businesses are built over years, not months, according to Forbes.
https://www.forbes.com/sites/siimonreynolds/2012/09/19/why-building-a-great-business-
takes-time/
Company age plays a crucial role in determining the causes of failure. Many
factors that lead to the failures of younger firms may be less relevant to older companies,
because business owners increase their managerial abilities as they actually run their
businesses and get to know their real costs and necessary income better year-by-year
(Jovanovic, 1982).
https://scholar.google.com/citations?
view_op=view_citation&hl=en&user=YBMCy6QAAAAJ&citation_for_view=YBMCy6QAA
AAJ:u5HHmVD_uO8C
Older businesses face different problems than young businesses, especially
because older organizations have already developed managerial methods as well as planning
and control instruments, and they therefore more likely fail from causes besides operational
problems in management or administration (Thornhill and Amit, 2003).
https://scholar.google.com/scholar_lookup?title=Learning%20about%20failure%3A
%20bankruptcy%2C%20firm%20age
It is evident that years of operation affect the business successful rate and its
failures, it shows that the more a business last long it will encounter more reason for it to fall.
Every year of operations always gave a tendency for a business to fall. In our present time,
business owners have ecountered more reasons for their business to fail specially that Covid-19
pandemic start.
NUMBER OF STAFF
According to OECD (2022), Employees are all people covered by a contractual
arrangement, working in an enterprise and receiving compensation for their work. Enterprises
can be classified as small or medium sized (less than 250 employees) or as large (250 or more
employees). This indicator is measured as the number of employees in manufacturing.
https://data.oecd.org/entrepreneur/employees-by-business-size.htm
Employees is very important because they can provide crucial insights into the
overall customer experience. But they are often overlooked or neglected, and most companies
do not view them as valuable assets – either in terms of providing insights into the customer
experience, or as brand ambassadors (Eloise, 2019).
https://www.coriniumintelligence.com/insights/are-employees-more-important-to-your-
business-than-customers
In 2021, High employee turnover has a direct impact on company revenue and
profitability. The impact of high staff turnover includes decreased productivity, increased
recruitment costs, avoidable time spent on training new employees, and lost sales. And bad
staff turnover happens due to negative triggers at an unexpected rate.
https://www.hrprofilingsolutions.com.au/blogs/aus-blog/employee-turnover-causes-
effects-strategies/
With all the studies being conducted, it state that it is very important to get the
right employees on board to ensure the grow with everyone, contributing to overall success as a
business. Within total employee involvement, team members are encouraged to learn more
about their organization, contribute ideas, feel more engaged, and look for new opportunities
that will help the organization be more competitive and effective.