Factors Contributing To Failure Of Business: A Case Study Of SME In Singapore

Background of the study

This research has aimed to identify and examine the different factors responsible for failure of small-scale organizations.  Singapore has been chosen as the area of context, where the study will analyse the failure reasons for the small-scale companies in Singapore. The researches conducted in the past have only considered either the extrinsic or the intrinsic factors of business failure. However, in this study both this aspect will be taken into consideration while analysing the failure in business.

Small enterprises face many difficulties in sustaining a business and as the number of start-up organizations have increased due to free trade and globalization, the failure rates are quite high for the companies in their nascent stages.  In developing and advanced developing countries small-scale business, represent a majority of the business sectors, so small-scale organizations have a significant contribution to make to the growth of the economy of the developing nations (Nummela, Saarenketo and Loane 2016).  Therefore, in order to promote the development and growth of the small-scale enterprises, governments develop instruments and model for providing both non-financial and financial support to the sector. Even though, the support in majority of the developed nations are highly, the failure rate of the small-scale organizations globally is high. It has been seen that 50% of the all the new businesses fail within five years of time, which means almost of the new companies, half of them fail (Fatoki 2014). This is one of the biggest areas of concern for the economy of any nation as the small-scale organizations are responsible for stimulating growth.

Singapore has always relied majorly on its position as an entrepot-trading centre for developing their economy.  Therefore, initially after the independence the economy of Singapore was dependent on foreign direct investment, export and infrastructural growth. The free trade established in Singapore was one of the main drivers of economic growth in the country and small-scale organizations did not have any significant role to play (Syahputra and Soesanti 2017). The small-scale organizations had been the local links to multinational companies by supporting them in effective supply chain management. This facilitated the small-scale organizations in knowledge transfer and technology transfer which improved the operations of the smaller companies. The recession that the country faced in the year of 1985 made the government change the role of the SMEs in economic stability and growth (Mas.gov.sg 2018). Therefore, the Asian crisis shifted the focus of Singapore on an economy-based knowledge where both technology and expertise had become essential for the sustainability of the small-scale organizations.  The role of entrepreneurs has changed significantly in the 21^st century where the SMEs have been responsible for adding value to the value chain by using innovation. These strategies have been able to transform the economy completely and the market in Singapore can be compared to United States due to its market competitiveness.  

Research aim and objective

However, even though the market economy has transformed and the SMEs play a significant role, the failure rates of the new organizations have not decreased. The major problem is the fact that it is extremely difficult to predict the success or sustainability of any business due to the fast-changing nature of businesses and consumer demands. The recovery in the SME sector is quite weak as they have minimal access to capital (Rodan 2016). However, the case is not the same in countries Singapore as the government has provided enough opportunity to them and the SMEs can sustain easily. However, this is not the case for almost percent of the small-scale organizations.  A report suggested that 81% of the SMEs in Singapore are not fit for financing. The majority of the SMEs incur heavily losses in the initial phases and the competition in the market is high (Mas.gov.sg 2018). However, are these factors enough to justify the reason that the companies fail. Therefore, a thorough analysis of the SMEs in Singapore will have to examined to evaluate the different factors that are causing the failure of start up coming in advanced developing countries like Singapore. Moreover, there has been significant slowdown in the domestic economy which is expected to affect the small-scale organizations. This topic still requires in depth analysis as the situations are different for developed countries and developing countries (Rodan 2016).  The importance of innovation and creativity will also be measured to check the increase in difficulties for the small-scale organizations.

The study has aimed to examine and identify the different external and internal factors for small scales that causes failures in business.  This will initially examine the major intrinsic and extrinsic factors causing the failure of the small-scale enterprises in Singapore. The research will examine the common errors made in strategizing and forecasting, and developing remedial actions essential for improving the business growth in small-scale organizations in Singapore.  Lastly, the study has also depicted the insufficiencies in skills, expertise and knowledge that has contributed to the failure of small-scale businesses. The findings and results developed has been used to generate guides for the small-scale organizations for maintaining sustainability in the market.

The objective of the study are as follows:

• To examine the main intrinsic and extrinsic contributing factors of business failure
• To understand the common flaws of forecasting, strategizing and executing remedial action that hold back the business growth
• To identify the deficiencies of knowledge and skills that contribute to business failure.

• What are the profiles of failed and / or suffering business?
• What are the contributing factors in the business failure?

H₀₀: There is no significant impact of financial factors on business failure in small-scale organizations

H₀₁: There is significant impact of financial factors on business failure in small-scale organizations

H₀₂: There is no significant impact of management factors on business failure in small-scale organizations

Research Question

H₁₂: There is significant impact of management factors on business failure in small-scale organizations

H₀₃: There is no significant impact of political changes on business failure in small-scale organizations

H₁₃: There is significant impact of political changes on business failure in small-scale organizations

Success of businesses is focussed on the entrepreneur’s viewpoint, management acumens along with business exposure before commencing business along with business strategy in maintaining sustainability of the companies. It was observed from a market survey conducted by Arasti, Zandi and Bahmani (2014) that services and products those are deemed to be offered is highly important. Proper market segmentation along with targeting is one of the major functions of small businesses strategies which offer the managers with an insight to create a breakthrough and ensuring success (Liu, Wright and Filatotchev 2015). Considering the same, the literature review is focussed on explaining the major factors that causes failure in SMEs in Singapore.

Basuony (2014) defined business failure to be the termination of any business activity or resulting in great loss. Moreover, voluntary exit along with leftover liabilities, for instance, property, bank loan along with de-mobilization costing is also deemed to be within the business failure framework. Business organizations are often referred to the private limited organizations, sole proprietors along with limited liability partnerships (LLP). Camacho?Miñano, Segovia?Vargas and Pascual?Ezama (2015) revealed that smaller companies dealt with certain disadvantages at the time of competing with certain large companies. Moreover, majority of the organizations those are newly established that is for more than five to ten years are likely to experience the issue of business failure (Mageswari, Sivasubramanian and Dath 2015). Such situation might arise because of these organizations expansion decision and increase in the economic parameters because of strong market demand. Collett, Pandit and Saarikko (2014) also added that expanding organizations scale along with facility in order to cater an increased market share is an effective strategy but the managerial expertise to manage a bigger operation scale is coherent as attrition rate along with retaining talent is a major concern for leaders.

Eniola and Entebang (2017) indicated that financial health or cash flow can be vital at times at the time credit terms and debts are not supervised in a better manner and in such scenario budgeting serves as a vital aspect in many new projects along with product launches. Business foresight on recognising upcoming slowdown trends, business competitions along with effective first-hand networks to realise policy changes can facilitate the leaders of organizations in developing and implementing mitigating strategies to decrease drastic impacts of failure. Erol and Atmaca (2016) elaborated that there are several severe consequences those can be faced in case business operations of SMEs fail. Failure to understand the competition in the industry is observed to affect the company’s business that might result in the company failure (Parnell, Long and Lester 2015).

Research hypothesis

Moreover, certain negative impacts of business failure are bankruptcy that can affect the overall economy of the nation. In addition, the failed business is also deemed to have powerful impact on its owners along with affecting the employees working in the companies. In contrast, explained that once business failure takes place in the SMEs, the employees turn out to be redundant (Gupta, Gregoriou and Healy2015). For this reason the corporate bankruptcies impacts the ones those operate the businesses along with the people those rely on these companies for their living. Moreover, this is also gathered to contribute to serious economic and social issues particularly for the employees those reside within the poor areas in which unemployment rates are quite high and finding a job is quite difficult (Tong 2014).

Gray and Jones (2016) revealed several reasons for business failure in SMEs that includes incompetency and lack of expertise of the management along with market, product and service issues. Certain other factors contributing to the business failure of SMEs are explained under:

• Incompetency along with lack of experience of management- Gupta, Gregoriou and Healy (2015) indicated that more than 90% of the business failures of SMEs take place because of incompetency along with absence of staff experience. Management issue serves that the major factor for business failure. Moreover, the accounting acumens are considered to be vital in the scope of management for the reason that it can facilitate the company in recognising don sloping business trends. Meyer and Meyer (2017) added that management employees are not equipped with necessary skills and expertise in order to advise the leaders on interpreting, effective contingency planning along with investment diversion in order to deal with the likely risks.
• Market, product and service issues- In consideration to the product and service aspects, timing along with marketing design is observed to be important in case the strategic marketing is concerned. Scherger, Vigier and Barberà-Mariné (2014)stated that implementing faulty marketing along with distribution channels serves as major contributors of business loss or failures. Several SMEs have also established it over many years and have also anticipated the mindsets of close working relationships with less major consumers and neglecting other consumer markets and targets (Feeny, Iamsiraroj and McGillivray 2014). In contrast, indicated that increased dependence on few major accounts might result in crisis when strong competition is erupted at the time of economic slowdown. Sustaining a healthy financial status is another uphill task, inadequate funds along with improper anticipations regarding debts those are indicators those are taken for granted at the time the business is prospering (Massaro et al. 2016). Organization is observed to fail gradually and not immediately by latency effects in which one episode of negligence results in organizational failure.  
• Inadequate capital for sustainability- Simón-Moya, Revuelto-Taboada and Ribeiro-Soriano (2016) explained that dealing with business risk by means of implementation of mitigating measures to owner the chances of business failure is a vial daily task that is mistaken as a quarterly chore. In addition, detailed fund monitoring along with debts serve as a major strategy of decreasing business risks along with sustaining business operations those are associated with major business conducts of the SMEs.  Gupta,Gregoriou and Healy (2015) added that profit margin is also reflected in the fraction of debts attained by these companies and the SMEs are observed to fail because of attaining insufficient funds available in handling operating expenses. For this reason, the initial start-up and credit term funds must be designed in a better manner to attain a sustainable situation for the consumers along with the companies.
• No previous knowledge of targeting or market segmentation- Weaknesses that result in business failure is revealed in the research ofKesting and Günzel-Jensen (2015) that revealed underestimating the importance of management skills in comparison to the technical ones contributes to business failure. Moreover, lack in sufficient product knowledge along with marketing strategies of managers along with internal capability in its accounting aspects like cash flow, working capital and project budgeting analysis. Lukason and Hoffman (2015) also elaborated that strategic marketing acumens include targeting and marketing segmentation that is needed by key success factors on consumer behaviour and must be realised clearly before offering certain services to the market.
• Economic downturn resulting in business failure- Meyer and Meyer (2017) explained in their research that business failure is associated with certain contributing areas associated with leaders incompetency in order to analyse the impacts of interest rates on business conducts of SMEs. Another major factor that is observed to contribute to business failure is that managers certain forecasting capabilities and becomes to pessimistic of the market trends. Scherger, Vigier and Barberà-Mariné (2014) stated that few managers have the ability to conduct forecasting analysis but the parameters of macro forecast do not encompass the neighbouring nation’s financial trends along with political affairs on local businesses.

These researchers also highlighted in their study that there exist no sign of economic recession and are also suggested the ways in which companies can pre-plan prior the economic slowdown (Huat 2016). In contrast, revealed that this can also be done through attracting resources by regular marketing strategies implementation during economic slowdown and maintaining better price to deal with misinterpretation of compromising the quality of services (Simón-Moya, Revuelto-Taboada and Ribeiro-Soriano 2016). In addition, certain factor such as use of opportunity to realise necessary consumer needs and expectations to offer services and products as per their demands. Catering needs of the market can make its products successful in the market and can decrease the chances of business failure of SMEs (Wood et al. 2014).

• Policy changes from the behalf of governing stakeholders- Tobback et al. (2017) highlighted in their research that the SMEs might be considerably prejudiced and impacted by certain opinionated associations of the powerful stakeholders from certain political factors rather than the owners and management of SMEs. Uwonda and Okello (2015) signified in their research that the special effect of political power that is held by the non-financial stakeholders in the company is prevalent along with their impacts of employee salary and shareholders monetary shares (Arham 2014). Such relationships are not just important for recognising the mechanisms on which the political power of shareholders can impact and Change Company value but are also concerned with new policies developed by policy makers.
• Existence of high price competition- Walsh and Cunningham (2016) stated that price serves as a vital consideration for consumers and for the same the SMEs have to differentiate its services from its major rivals to sustain its market position. Specialization within a specific area will put the SMEs in favour of fierce competition. The internal capabilities along with infrastructure of these companies are also vital for the companies as its effectiveness can facilitate in addressing the risks of business failure (Grandinetti 2016).

Williams (2016) defined that in explaining the concept of small business failure through implementation of suitable theory that is generally represented by a single or sequence of hypotheses which explain the event that is to be researched. In the context of this specific research, the events refer to the failure of small businesses though following the Hazard modelling theories along with models employed to understand the reasons of small business failure along with predicting business failure in defied course of action. Wolmarans and Meintjes (2015) also agreed on the fact that small business failures generally shut down due to actions such as bankruptcy, foreclosure or voluntary withdrawal from the businesses with financial loss to the creditors. It has also been revealed from the study that the risks factors those impacts the small business failure as because of lack business knowledge, capital, lees market share along with economic downturn (Sam and Sharma 2015). This also facilitates in maintaining best practices of businesses procedure is not guaranteed formula for success and considerably decrease the risk of business failure. According to the views presented by Zaridis and Mousiolis (2014) the hazard model also considered as cox regression models are considered for survival evaluation along with prediction of business failure. These models are observed to determine the aspects that results in causing failure of small businesses focussed on the detrimental effect over the business ages along with predicting certain business failures through use of the company’s financial statements (Siddiqui 2016).

Literature review

As per the views presented by Motilewa et al. (2015) it has been revealed that hazard models have certain advantages like having the capability to stipulate a sustainable business. Poor business management leads to inefficiencies which results in internal failures that are further impacted by certain environmental uncertainties. These researchers also revealed that to address the risk of business failure the entrepreneurs of the SMEs in Singapore must not disregard the importance of strategic planning (Cho and Križnik 2016). as far as the small business organizations are concerned it can be stated that there are a series of issues that recently the Singaporean market is suffering with in order to provide better framework for the small business organizations. In this regard, the common problem can be identified as the incompetency in managing employees and inadequate decision making. According to Hung, Hung and Lin (2015) it can be argued that the lack of professionalism can be seen in case of Singaporean small companies that affect the business establishment in that country. Moreover, it was intertwined with the aspect of lack of expertise and the bereft of understanding. On the other hand, Zaridis and Mousiolis (2014) advocated that the planning and executions have a major role in the success of the organization. From that point of view, in the Singaporean market the small business organizations are failed due to their lack of implementation of effective plans.

As a matter of fact, research Zhao, Yeung, Huang and Song (2015) considered that the inadequate market research and lack of capital facilitated a great deal of problems for the SMEs to establish their business profoundly and sustain it effectively. It can be stated that lack of good plan was an obstacle for the progress of the small-scale business organizations exists in Singapore (Yeung 2017). Besides his, it can be asserted that intense competition can be a problem from the small organizations to enter and retain into the intense competitive market. the domination of the giant and big companies fostered so much pressure on the small companies that they could not bear it. in his research Newby, Nguyen and Waring (2014) advocated that the monopoly of the giant companies is a sheer example of the capitalism. As a result of that it became impossible for the small business houses to compete and in the end succumbed into huge loss. The Singaporean market is a right example of such example and it is obvious for the small business organizations to retain there (Chand, Patel and White 2015).

Concept of Business Failure

Evaluation of several researches from scholarly articles and journals, it has been gathered that in carrying out research on the factors those contribute towards business failure of SMEs there exist a gap in evaluating the profiles of failed or suffering businesses (Kesting and Günzel-Jensen 2015). Moreover, very limited research is observed to be present on the aspects those cause business failure in companies of Singapore (Eneh 2017). The existing research on business failure of SMEs has focused on carrying out a detailed research on the intrinsic and extrinsic contributing factors related with the business failure. Most of those studies also had a limitation in realising common flaws in forecasting, strategising along with implementing remedial action that affects business growth (Lukason and Hoffman2015).  In addressing this identified research gap, the current research will explain the aspects those impact business failure of the SMEs in Singapore majorly focussing on the financial, psychological, political changes and price competition factors (Vadaketh and Low 2014). It will also consider a specific case study of two SMEs in Singapore including Company A and Company B along with analysing the knowledge and skills deficiencies that can result in business failure.

Research methodology defines the framework for gathering raw data and systematically using it reach the objective of the study. The research design, methods and approaches are described in detail in the study. The research methodology will follow the Saunders research onion and each of the layer will uncover the different methods used in each step. The methodology is chosen based on the goal of the study and based on the goals research method can be experimental, Quasi-experimental, Correlational method, Survey method, Case study method and Observational method. The main goal of the study explanation of the phenomenon so experimental method will be used in the study.  

Research philosophy defines the assumptions made the researcher while conducting the research. However, it also defines the personal belief of the researcher regarding the use of different tools and instrument while collecting and analysing data. The different research philosophies are interpretivism, realism, pragmatism and positivism (Taylor, Bogdan and DeVault 2015). However, in this study, pragmatism has been chosen as the research philosophy as mixed method analysis will be used. Pragmatism accepts concepts whose relevancy can be proven by actions which facilitates in conducting both subjective and objective analysis of data.  

The different types of research approaches used in research are inductive, deductive and abductive approach. In this current study, as both qualitative and quantitative analysis has to be conducted in a structured manner deductive approach is the best suited approach (Flick 2015). Deductive approach will facilitate in testing the hypothesis based on the theories discussed in the literature review section.

The two types of research design chosen in business research are conclusive and exploratory research design. The exploratory research design is used for exploring data to conduct analysis but does not aim to draw specific conclusion. In conclusive research design, specific conclusions are drawn based on the theories and phenomenon are described. Conclusive research design can be divided into descriptive and causal research design where the descriptive research design will describe the behaviour and causal research will measure the association between both the independent and the dependent variable (Meyers, Gamst and Guarino 2016). However, in this study, sequential explanator research design has been used as it facilitates in conducting mixed method analysis of the data. In sequential explanatory research design, the quantitative analysis has been conducted at first and the results from the quantitative data analysis will be compared with the results of the qualitative analysis (Abdulkadiro?lu et al. 2017). The results obtained from the qualitative analysis has validated the result obtained through quantitative analysis.

In this study, primary data will be collected in a structured and semi structured manner to collect both quantitative and qualitative data (Palinkas et al. 2015). The quantitative data will be collected through surveys consisting of structured close ended questions that will be asked to the employees working in small scale organizations in Singapore. The qualitative data will be collected by conducting semi structured interviews with managers and higher-level officials in small scale organizations. The quantitative data will be analyzed using statistical tool such as SPSS for generating the frequency tables, graphs, cross tabulation, correlation, chi square, regression and t-test to prove the hypotheses developed (Quinlan et al. 2019). The qualitative data will be analyzed using coding where open coding and axial coding will be used. The open coding will be used to convert the raw data in specific data based on patterns and theories. Axial coding will be used to analyze the streamlined data to generate relevant findings.

Reliability defines the ability of the research instruments to reproduce the same results using different data sets. Initially after collecting the data Cronbach’s Alpha has been calculated to check the reliability of the data. The study has also used test retest reliability to use different data sets to check whether same results are drawn or not. Pilot testing has been used to check the pre-questionnaire design (LoBiondo-Wood and Haber 2014). Validity is more significant than reliability as the results can be precise but unless they are accurate and significant, they hold no meaning. The study has used construct validity to check whether the prescribed methods and instruments have been used or not. It also checked the accuracy of the results generated from specific methods used.

The study has taken permission from the organizations and respondents before conducting the research by ethical checklist and consent forms. The anonymity of the respondents has been kept and has been given top most priority to protect the privacy of the respondents. The data collected will be destroyed after the study is completed and the respondents have been made aware of the objective and purpose of going through this project (Dingwall et al. 2017). The respondents participated of their free will and they have not been forced to take part. The questionnaires and surveys have not used any abusive, offensive or discriminatory language that may hurt the sentiments of any specific community.  

This chapter has critically evaluated the impact of different factors on failure of business in Small scale organization. The survey has been conducted with 50 employees working in different small organizations belonging to different industries. The respondents chosen in the study are of Singaporean nationality.

Reliability Statistics
Cronbach’s Alpha	Cronbach’s Alpha Based on Standardized Items	N of Items
.983	.983	52

Table 1: Reliability testing

(Source: As created by author)

The Cronbach’s Alpha is used for testing the internal consistency of the data collected and conduct test re test reliability.  As per the thumb rule, the value of alpha is good if it is greater than 0.7 and in this given study the value of alpha is greater than 0.7 and has a value of 0983. This shows that the data collected is reliable and can be used for conducing the analysis in the research because the internal consistency of the data collected is high.

ANOVA with Friedman’s Test and Tukey’s Test for Nonadditivity
	Sum of Squares	df	Mean Square	Friedman’s Chi-Square	Sig
Between People	1428.519	49	29.153
Within People	Between Items	230.250	51	4.515	9.110	.000
Residual	Nonadditivity	62.370a	1	62.370	132.472	.000
Balance	1176.091	2498	.471
Total	1238.461	2499	.496
Total	1468.712	2550	.576
Total	2897.230	2599	1.115
Grand Mean = 2.04
a. Tukey’s estimate of power to which observations must be raised to achieve additivity = 2.431.

Table 2: Tukey Test

(Source: As created by author)

Tukey’s test of non additivity shows that the interaction between the block factor and the treatment and is highly significant. Therefore, the data does not have to be changed as the collected data set is reliable.

Demographic questions 

	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
Gender	50	1	1	2	1.42	.071	.499	.249
Age	50	4	1	5	3.12	.189	1.335	1.781
Type of business ownership	50	2	1	3	1.94	.112	.793	.629
Highest educational qualification	50	4	1	5	3.12	.191	1.350	1.822
courses attended	50	3	1	4	2.54	.157	1.110	1.233
Valid N (listwise)	50

Table 3: Descriptive statistics

(Source: As created by author)

	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
No of employees	50	3	1	4	2.66	.155	1.099	1.209
Type of business	50	3	1	4	2.66	.168	1.189	1.413
mentored by successful business	50	1	1	2	1.58	.071	.499	.249
Business plan	50	1	1	2	1.44	.071	.501	.251
Business plan review	50	2	1	3	1.92	.124	.877	.769
Valid N (listwise)	50

Table : Descriptive statistics

(Source: As created by author)

Descriptive Statistics
	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
insufficient leadership skills	50	3	1	4	2.04	.143	1.009	1.019
leaders are overloaded with work	50	3	1	4	1.92	.151	1.066	1.136
ineffective and inefficient  communication with consumers, suppliers and stakeholders	50	3	1	4	2.00	.146	1.030	1.061
lack of professional expertise	50	3	1	4	1.98	.147	1.040	1.081
over-price and underprice	50	3	1	4	1.92	.151	1.066	1.136
bankruptcy and caveat	50	3	1	4	2.00	.146	1.030	1.061
Delay in payment collection	50	3	1	4	1.98	.147	1.040	1.081
lack of marketing plans	50	3	1	4	2.06	.141	.998	.996
Lack of financial planning	50	3	1	4	1.90	.152	1.074	1.153
Legal action taken against organization	50	3	1	4	2.02	.144	1.020	1.040
high fixed cost	50	3	1	4	2.00	.146	1.030	1.061
lack of business management experience among the leaders and managers	50	3	1	4	1.96	.148	1.049	1.100
ineffective and inefficient communication with employees	50	3	1	4	1.94	.150	1.058	1.119
Changes in government policies	50	3	1	4	1.94	.150	1.058	1.119
Over reliant on big accounts and very little market share	50	3	1	4	1.90	.152	1.074	1.153
Valid N (listwise)	50

Table 4: Descriptive statisticsss

(Source: As created by author)

Correlations
	insufficient leadership skills	leaders are overloaded with work	ineffective and inefficient  communication with consumers, suppliers and stakeholders	lack of professional expertise	over-price and under-price	bankruptcy and caveat	Delay in payment collection	lack of marketing plans	Lack of financial planning	Legal action taken against organization	high fixed cost	lack of business management experience among the leaders and managers	ineffective and inefficient communication with employees	Changes in government policies	Over reliant on big accounts and very little market share
insufficient leadership skills	Pearson Correlation	1	.819**	.805**	.798**	.800**	.824**	.817**	.747**	.776**	.792**	.824**	.753**	.843**	.824**	.832**
Sig. (2-tailed)		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
leaders are overloaded with work	Pearson Correlation	.819**	1	.855**	.827**	.856**	.799**	.827**	.791**	.884**	.827**	.873**	.800**	.792**	.810**	.902**
Sig. (2-tailed)	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
ineffective and ineffecient  communication with consumers, suppliers and stakeholders	Pearson Correlation	.805**	.855**	1	.819**	.836**	.750**	.838**	.794**	.849**	.796**	.827**	.774**	.805**	.880**	.867**
Sig. (2-tailed)	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
lack of professional expertise	Pearson Correlation	.798**	.827**	.819**	1	.790**	.895**	.755**	.827**	.839**	.789**	.819**	.841**	.834**	.797**	.875**
Sig. (2-tailed)	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
over-price and under-price	Pearson Correlation	.800**	.856**	.836**	.790**	1	.781**	.845**	.810**	.849**	.827**	.818**	.837**	.828**	.883**	.902**
Sig. (2-tailed)	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
bankrupcy and caveat	Pearson Correlation	.824**	.799**	.750**	.895**	.781**	1	.819**	.834**	.812**	.796**	.827**	.831**	.899**	.768**	.830**
Sig. (2-tailed)	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Delay in payment collection	Pearson Correlation	.817**	.827**	.838**	.755**	.845**	.819**	1	.827**	.875**	.847**	.838**	.804**	.871**	.852**	.839**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
lack of marketing plans	Pearson Correlation	.747**	.791**	.794**	.827**	.810**	.834**	.827**	1	.824**	.841**	.853**	.879**	.815**	.796**	.824**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Lack of financial planning	Pearson Correlation	.776**	.884**	.849**	.839**	.849**	.812**	.875**	.824**	1	.840**	.849**	.848**	.857**	.875**	.894**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Legal action taken against organization	Pearson Correlation	.792**	.827**	.796**	.789**	.827**	.796**	.847**	.841**	.840**	1	.855**	.840**	.815**	.852**	.822**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
high fixed cost	Pearson Correlation	.824**	.873**	.827**	.819**	.818**	.827**	.838**	.853**	.849**	.855**	1	.812**	.805**	.824**	.867**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
lack of business management experience among the leaders and managers	Pearson Correlation	.753**	.800**	.774**	.841**	.837**	.831**	.804**	.879**	.848**	.840**	.812**	1	.844**	.825**	.812**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
ineffective and ineffecient communication with employees	Pearson Correlation	.843**	.792**	.805**	.834**	.828**	.899**	.871**	.815**	.857**	.815**	.805**	.844**	1	.854**	.839**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Changes in government policies	Pearson Correlation	.824**	.810**	.880**	.797**	.883**	.768**	.852**	.796**	.875**	.852**	.824**	.825**	.854**	1	.821**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
Over reliant on big accounts and very little market share	Pearson Correlation	.832**	.902**	.867**	.875**	.902**	.830**	.839**	.824**	.894**	.822**	.867**	.812**	.839**	.821**	1
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50	50	50	50	50
**. Correlation is significant at the 0.01 level (2-tailed).

Table 5: Correlation Matrix  

(Source: As created by author)

The above correlation matrix shows that majority of the respondents have agreed to the questions and they have considered the above mentioned factors as crucial factors that results in failure of businesses. The different aspect of management necessary to sustain the businesses have been identified.  There is high level of correlation among all the factors which shows one factor will lead to another factor which will result in failure of businesses in the organization.  The insufficient leadership skills will cause factors such as ineffective and inefficient communication with the consumers and inaccurate pricing of the services and products. The leader guides the organization and sets up a structure where they instruct the workforce to manage different aspects of the organizational operations. However, lack of skills among the leaders will cause the organization to falter due to mismanagement.  The feasibility of a business depends upon the fixed costs and the ability of the organization to fulfill the market gap. However, lack of skills and farsightedness among different leaders will result in failure of the business as there are unable to evaluate the fact that business concept is not feasible. Moreover, in advanced developing countries like Singapore, the competition in the small scale organizations are high and majority of the business organization fail due to the lack of ability in developing innovative and creative products that addresses market needs. Moreover, the businesses fail due to the inability of the leaders to assess the business plan effectively and use the cost benefit analysis to understand the effectiveness of the business plan.  This is clearly reflected in the correlation analysis where majority of the values are significant at confidence of 0.01.

Hypothesis

H₀₂: There is no significant impact of management factors on business failure in small-scale organizations

H₁₂: There is significant impact of management factors on business failure in small-scale organizations

The above mentioned hypothesis aimed to examine whether psychological factors have impact on the failure of the organizations or not. As per the correlation and the opinions of the respondent it has been seen that management factors play a great role in business roles. There has been significant increase in the level of competition between the different organizations and managing the organization effectively to reduce the initial costs and improving the profit margin is more important for small scale organizations.  The correlation value in all the cases is almost close to 1 or greater than 0.8. This signifies strong positive correlation among the variables and this means that with increase in one value of one variable, there will be significant increase in the value of the other variables. Therefore, this a business does not fail due to a single issue but series of issues led to failure of any business organizations

Descriptive Statistics
	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
inadequate financial accounting skills	50	3	1	4	2.02	.144	1.020	1.040
no urgency in debt collection from consumers	50	3	1	4	2.04	.143	1.009	1.019
Using business funds for personal use	50	3	1	4	1.86	.154	1.088	1.184
No recording of cash flow	50	3	1	4	1.96	.148	1.049	1.100
No adequate control of resources	50	3	1	4	2.06	.141	.998	.996
unreasonable credit term	50	3	1	4	2.04	.143	1.009	1.019
insufficient initial startup fund	50	3	1	4	2.00	.146	1.030	1.061
inadequate market trend forecasting	50	3	1	4	2.00	.146	1.030	1.061
Valid N (listwise)	50

Table 6: Descriptive statistics

(Source: As created by author)The descriptive statistics show that majority of the respondents have agreed to the factors causing the failure of businesses.  The mean shows that average respondents have agreed to the respondents and the frequency distribution of the data depicts the same thing where there is a clear majority that have considered these factors crucial for failure of businesses.

Correlations
	inadequate financial accounting skills	no urgency in debt collection from consumers	Using business funds for personal use	No recording of cash flow	No adequate control of resources	unreasonable credit term	insufficient initial start up fund	inadequate market trend forecasting
inadequate financial accounting skills	Pearson Correlation	1	.832**	.848**	.840**	.781**	.772**	.835**	.777**
Sig. (2-tailed)		.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
no urgency in debt collection from consumers	Pearson Correlation	.832**	1	.879**	.811**	.788**	.780**	.805**	.785**
Sig. (2-tailed)	.000		.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
Using business funds for personal use	Pearson Correlation	.848**	.879**	1	.853**	.853**	.823**	.837**	.874**
Sig. (2-tailed)	.000	.000		.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
No recording of cash flow	Pearson Correlation	.840**	.811**	.853**	1	.821**	.811**	.812**	.850**
Sig. (2-tailed)	.000	.000	.000		.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
No adequate control of resources	Pearson Correlation	.781**	.788**	.853**	.821**	1	.869**	.853**	.834**
Sig. (2-tailed)	.000	.000	.000	.000		.000	.000	.000
N	50	50	50	50	50	50	50	50
unreasonable credit term	Pearson Correlation	.772**	.780**	.823**	.811**	.869**	1	.805**	.864**
Sig. (2-tailed)	.000	.000	.000	.000	.000		.000	.000
N	50	50	50	50	50	50	50	50
insufficient initial start up fund	Pearson Correlation	.835**	.805**	.837**	.812**	.853**	.805**	1	.827**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000		.000
N	50	50	50	50	50	50	50	50
inadequate market trend forecasting	Pearson Correlation	.777**	.785**	.874**	.850**	.834**	.864**	.827**	1
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
**. Correlation is significant at the 0.01 level (2-tailed).

Table 7: Correlation matrix

(Source: As created by author)

Financial failure is a common factor for the small scale organizations in the initial phase of the startup due to the limit funds they have. In developed countries, the market is highly competitive and even in the small sector, the competition is high, which means the sustainable competitive advantage is difficult to attain. This is the reason that the percentage of the business failure in Singapore is high and more than half of the organizations fail to grow.  The management of the financials of any organization is key for the first 5 years of their commencement as they have to consider their long term sustainability. The organization cannot make a risky move at the initial stages of their operations as they have limited amount of capital and they have to spend it carefully and keep a certain amount of capital for emergency purposes. Therefore, a thorough understanding of the balance sheet, cash flow, income statement and the cost benefit analysis will result in making effective business decisions for companies.  The inadequacy in financial accounting skills will result in lack of understanding of the financial requirements of the organization. This means that the organizational resources will not be used effectively by the workforce due to the lack of guidance from the financial head.  The responsibility of the financial team is not only management of the organization but also forecasting the current and future trends in the market. In the above correlation matrix, it has been seen that all the variables are correlated with each other and is significant at 99% of confidence interval. This shows that all these factors are responsible for effective management of the finances of the company and the prime objective of any company is to maintain their liquidity and revenue generation streams so that the organization can continue their operations.

Hypothesis

H₀₀: There is no significant impact of financial factors on business failure in small-scale organizations

H₀₁: There is significant impact of financial factors on business failure in small-scale organizations

The hypothesis is examining the impact of the financial factors on business failure in small scale organizations. The correlation matrix shows that the above mentioned financial factors are significantly important and have degree of association among them. In majority of cases, the correlation values are greater than 0.7 which shows positive relationship between variables. Moreover, it also indicates that these variables are directly proportional to each other which means with increase in one factor, there will be increase in another factor. Therefore, this also shows that failure in one area causes the failure in other areas. As per the correlation matrix, it has been that lack of financial skills among the results in inappropriate recording to cash flows. It will also affect the control of resources by the workforce due to wrong calculation of the resources requirement. A startup company cannot waste their resources as it affects the liquidity of the company and in case of small scale organizations losses are difficult to cover due to the high debt equity ratio of these companies.

Descriptive Statistics
	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
Decrease in demand of products or services	50	3	1	4	1.96	.148	1.049	1.100
too many competitors selling the same product	50	3	1	4	2.02	.144	1.020	1.040
intense price cutting competition	50	3	1	4	2.00	.146	1.030	1.061
Not clear about consumer needs and expectation	50	3	1	4	1.92	.151	1.066	1.136
lack of product differentiation across market	50	3	1	4	2.00	.146	1.030	1.061
No market benchmarking of product pricing	50	3	1	4	2.10	.138	.974	.949
Lack of control on the number of similar products	50	3	1	4	2.00	.146	1.030	1.061
No stringent requirement to restrict unethical business dealing	50	3	1	4	2.16	.132	.934	.872
Valid N (listwise)	50

Table 8: Descriptive statistics  

(Source: As created by author)

Correlations
	Decrease in demand of products or services	too many competitors selling the same product	intense price cutting competition	Not clear about consumer needs and expectation	lack of product differentiation across market	No market benchmarking of product pricing	Lack of control on the number of similar products	No stringent requirement to restrict unethical business dealing
Decrease in demand of products or services	Pearson Correlation	1	.821**	.831**	.837**	.812**	.843**	.831**	.819**
Sig. (2-tailed)		.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
too many competitors selling the same product	Pearson Correlation	.821**	1	.777**	.809**	.816**	.861**	.816**	.854**
Sig. (2-tailed)	.000		.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
intense price cutting competition	Pearson Correlation	.831**	.777**	1	.818**	.827**	.813**	.808**	.806**
Sig. (2-tailed)	.000	.000		.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
Not clear about consumer needs and expectation	Pearson Correlation	.837**	.809**	.818**	1	.799**	.774**	.911**	.854**
Sig. (2-tailed)	.000	.000	.000		.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
lack of product differentiation across market	Pearson Correlation	.812**	.816**	.827**	.799**	1	.874**	.827**	.827**
Sig. (2-tailed)	.000	.000	.000	.000		.000	.000	.000
N	50	50	50	50	50	50	50	50
No market benchmarking of product pricing	Pearson Correlation	.843**	.861**	.813**	.774**	.874**	1	.752**	.880**
Sig. (2-tailed)	.000	.000	.000	.000	.000		.000	.000
N	50	50	50	50	50	50	50	50
Lack of control on the number of similar products	Pearson Correlation	.831**	.816**	.808**	.911**	.827**	.752**	1	.806**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000		.000
N	50	50	50	50	50	50	50	50
No stringent requirement to restrict unethical business dealing	Pearson Correlation	.819**	.854**	.806**	.854**	.827**	.880**	.806**	1
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50
**. Correlation is significant at the 0.01 level (2-tailed).

Table 9: Correlation Matrix

(Source: As created by author)

The findings of the correlation matrix is same in this scenario as seen in the previous correlation matrices. The majority of the values are close to 0.8 which means that degree of correlation is high and positive in nature. Therefore, it is essential to understand that the external market factors have significant impact on the organization and is essential for the companies to assess the market conditions and identify gaps to develop products that will address the current needs of the consumers. However, it is also essential to conduct a feasibility study to check the viability of the venture before entering the market. Creativity and innovation are major factors that helps in managing the sustainability of the organizations in the current market by product differentiation or cost leadership. This shows that in order to add value to the products and services is one of the key aspects for the organization in sustainable development.  However, in a market like Singapore, some of the factors are not significant due to the growth of the small scale industry and support that the government has provided for the growth of the industry.

H₀₃: There is no significant impact of political changes on business failure in small-scale organizations

H₁₃: There is significant impact of political changes on business failure in small-scale organizations

Political stability is one of the key drivers of the macro economy and it affects the other macro-economic factors. In a country, like Singapore, the macro economy is strong due to the political stability they have achieved in the previous years. The government develops and amends the policies of the business environment for the small scale and large scale companies.  The changes in the political aspects affects the macro environment as with change in government, there are some new policies and rules placed by the new government and it is difficult for the companies to change in the political environment. This proves the hypothesis that political changes affects the businesses and they fail.

Descriptive Statistics
	N	Range	Minimum	Maximum	Mean	Std. Deviation	Variance
Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error	Statistic	Statistic
Steep price competition	50	3	1	4	1.88	.153	1.081	1.169
strict business licensing procedures during the preliminary stages	50	3	1	4	1.90	.152	1.074	1.153
No credit term for new entrants	50	3	1	4	2.04	.143	1.009	1.019
Bribary and corruption	50	3	1	4	2.00	.146	1.030	1.061
rising rental causes	50	3	1	4	1.88	.153	1.081	1.169
rising manpower costs	50	3	1	4	2.00	.146	1.030	1.061
No minimum price of the product	50	3	1	4	2.08	.140	.986	.973
lack of enforcement  on unethical practices	50	3	1	4	2.06	.141	.998	.996
consumer demand for unreasonable dealing	50	3	1	4	2.04	.143	1.009	1.019
consumer delay in payments	50	3	1	4	2.00	.146	1.030	1.061
unreliable financial forecasts	50	3	1	4	2.00	.146	1.030	1.061
Valid N (listwise)	50

Table 10: Descriptive Statistics

(Source: As created by author)

Correlations
	Steep price competition	strict business licensing procedures during the preliminary stages	No credit term for new entrants	Bribery and corruption	rising rental causes	rising manpower costs	No minimum price of the product	lack of enforcement  on unethical practices	consumer demand for unreasonable dealing	consumer delay in payments	unreliable financial forecasts
Steep price competition	Pearson Correlation	1	.886**	.809**	.898**	.895**	.825**	.813**	.820**	.809**	.843**	.825**
Sig. (2-tailed)		.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
strict business licensing procedures during the preliminary stages	Pearson Correlation	.886**	1	.832**	.830**	.851**	.793**	.836**	.824**	.795**	.849**	.867**
Sig. (2-tailed)	.000		.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
No credit term for new entrants	Pearson Correlation	.809**	.832**	1	.805**	.809**	.844**	.817**	.848**	.820**	.805**	.864**
Sig. (2-tailed)	.000	.000		.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
Bribery and corruption	Pearson Correlation	.898**	.830**	.805**	1	.861**	.846**	.783**	.814**	.805**	.808**	.788**
Sig. (2-tailed)	.000	.000	.000		.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
rising rental causes	Pearson Correlation	.895**	.851**	.809**	.861**	1	.861**	.832**	.839**	.846**	.861**	.843**
Sig. (2-tailed)	.000	.000	.000	.000		.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
rising manpower costs	Pearson Correlation	.825**	.793**	.844**	.846**	.861**	1	.783**	.774**	.844**	.808**	.808**
Sig. (2-tailed)	.000	.000	.000	.000	.000		.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
No minimum price of the product	Pearson Correlation	.813**	.836**	.817**	.783**	.832**	.783**	1	.845**	.817**	.783**	.823**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000		.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
lack of enforcement  on unethical practices	Pearson Correlation	.820**	.824**	.848**	.814**	.839**	.774**	.845**	1	.828**	.814**	.814**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000		.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
consumer demand for unreasonable dealing	Pearson Correlation	.809**	.795**	.820**	.805**	.846**	.844**	.817**	.828**	1	.844**	.824**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000		.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
consumer delay in payments	Pearson Correlation	.843**	.849**	.805**	.808**	.861**	.808**	.783**	.814**	.844**	1	.808**
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000		.000
N	50	50	50	50	50	50	50	50	50	50	50
unreliable financial forecasts	Pearson Correlation	.825**	.867**	.864**	.788**	.843**	.808**	.823**	.814**	.824**	.808**	1
Sig. (2-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000	.000
N	50	50	50	50	50	50	50	50	50	50	50
**. Correlation is significant at the 0.01 level (2-tailed).

Table 11: Correlation Matrix

(Source: As created by author)

The economic factors have shown same results where all the factors are highly significant for the failure of the organization. The above mentioned are dependent on the government or the regulatory body of the operating country. The economic factors are macro-economic factors that are linked to the political economy. The changes in one factor will have similar impact on the other.

Questions	Remarks	Count
How long have you been working in this business?	I have been working in this business for the past two years. I have been working in this business for the past 6 month	1 1
Do you see any future potential business opportunities in Singapore? Please explain	Future business exist in the industry and it is expected to grow even further. Singapore has a strong support from the government in the small scale sector but due to the high competitiveness in the industry it is essential to develop products and services that are competitive to the other companies in the market.	2
What do you think are the factors leading to business failure? Please explain	The different factors leading to business failure are shortage of funds at the initial stage, lack of proper management skills which results in the mismanagement of tangible and intangible resources. Moreover, business feasibility and product feasibility are two key factors organizations have to consider when developing a new business. The sources of funding have to be reliable because shortage of funds is a common phenomenon in new companies.	2
Do you see the relationship between financial factors and business failure? Please explain	Yes, finances keep the business running and operating and with financial failure the company will seize to operate.	2
Do you see the relationship of psychological impact and business failure? Please explain	Yes, psychological factors have high impact on business failure as it affects the management of the organization. Lack of management among the organization results in operational failure.	2
Do you see the relationship of political impact and business failure? Please explain	Yes, political changes impact the business as political affects the other macro environmental factors such as economy and legal factors.	2
Do you see the relationship of price competition and business failure? Please explain	Cost leadership is a key strategy for majority of the small scale organizations for surviving in the industry. It is essential to examine the benchmark pricing of the industry so that they can set prices in comparison to other companies offering similar products. However, unique product value is a another factor based on product differentiation which can be used by the companies to gain competitive advantage without being in the price competition.	2
What are the fears an entrepreneur will have after business failure? Please explain	The major fear that the entrepreneurs feel is what they will do after the business is failed.  A failed business cannot be recovered and it is very tough and is only possible with external help.	2
What kind of courses would you suggest for an entrepreneur to attend before starting a business? Please explain	An entrepreneur should have adequate knowledge about each of the aspects of the business so that they can understand the needs of the organization and how resources should be effectively managed to reach an effective result.	2

Table 12: Coded data

(Source: As created by author)

Conclusions 

This chapter of the research has provided relevant conclusions based on the findings and analysis in the previous chapter. The objective set in the introduction chapter has been linked to the findings and analysis to draw and highlight the intrinsic and extrinsic factors that lead to the failure of the small scale organizations in Singapore.  It has already been established that Singapore has strong structure to support the growth of the small scale industries as it is an advanced developing country. However, the failure for the small scale organizations is a common phenomenon where the majority of the start-up companies are unable to sustain for at least for a time period of 5 years. The research has been able to identify both extrinsic and extrinsic factors that contribute effectively to the failure of business. The study has identified the deficiencies of knowledge and skill that contribute to the failure of business.

Objective 1: To examine the main intrinsic and extrinsic contributing factors of business failure

The findings of the study imply that both external and internal factors have contributed significantly to the failure of business in small scale organization. The management and financial aspect are the internal factors to the organization and market competition and the economic trends are the external factors. The lack of leadership skill is one of the key factor and it is crucial for organizations to have a dynamic personality and capabilities of handling pressure effectively. However, in majority of the cases, the budding entrepreneurs lack experience and skills to compete in such a highly competitive market.  The business leaders have to be practical so that they are able to evaluate the ability of the new venture to sustain in the market and the scope of the product in respect to the consumers. Similarly, the financial factor is one of the most reason that businesses fail. The businesses lack funding and liquidity at the initial stages of the business and lack of knowledge in financial management causes mismanagement of resources which results in bankruptcy in majority of the companies in the small scale industry. Similarly, the external factor such as competition in the market play a vital role in sustainability.  The new ventures needs to add value to their offerings in order to sustain in the market. However, in majority of the cases, the new ventures are unable to come up with unique strategies to address the gap in the market need. There are certain occasions where even though the gap identified is genuine but the scope of providing such products and service is not feasible due to the lack of development of the market.

Objective 2:

To understand the common flaws of forecasting, strategizing and executing remedial action that hold back the business growth

The inexperience of the new ventures often fail to consider few factors that are crucial for the viability of the business.  The first factor is inability to account for delays in payments which leads to wrong projection of revenue generation. It is essential to understand the payment cycle so that financially feasible projections are generated.  The next factor is inability to take account of the delays in the project and majority of the small scale companies lack the ability to understand the delay in project which would have a definitive impact of the financial projections.  Therefore, it is beneficial to include additional time into the project as buffer time facilitates in understanding the amount of expenses. The next factor is forecasting based on historical data and there are large number of companies using historical data for the projects for forecasting expenditure. The change in the external environment is sudden so the organization should keep buffer for every aspect and contingency plans in order to ensure that any deviation can be handled in terms of the contingency. These factors causes the loopholes in the strategic plan which results in delay on the remedial actions as the organization has not taken this factors and contingency into account while forecasting and analysing the possible scenarios.  The final factor is the inability of the business to forecast cash flows on regular basis. It helps the business in every phase of the business cycle so continuous forecasting is required to maintain sustainable competitive advantage.

Objective 3:

To identify the deficiencies of knowledge and skills that contribute to business failure

The small scale business have deficiencies of skills and knowledge due to which the failure rates of the organizations are high. Management and financial skills consist of loopholes in majority of the cases which leads to business failure. However, in certain cases, due to the inability of the organizations to cope with the changes in the market competition results also causes failure for majority of the small scale organizations.

Therefore, it is recommended that organizations should assess the external markets carefully before entering into the market. The entrepreneurs will have to develop effective business plans which provides in detail description of the different factors responsible for success of the business. In the long run, it is essential for the organizations to examine the market conditions and the current needs of the consumers. Creativity and innovation are two drivers that are necessary for the small scale companies to sustain in highly competitive advantage. They should use this creativity and innovation to develop economies of scale and cost leadership to improve their chances of sustainability in the long run.

The major limitation of the research is the fact that these findings are only applicable for the companies in Singapore. The findings will vary in different countries where the infrastructure for small scale industries are still underdeveloped. The causes of failure of business in those countries such as in African nations and South American nations. Moreover, the study has not covered the aspect for the developing countries in Asia where the market scenarios are different.

The study has developed the premises for future researches where the further extensive study where data from multiple companies can be collected to check the opinion of the large population. Moreover, using similar studies in other developing and under developed economies would provide different results due to the lack of infrastructure in those countries. 

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