Business failure factors: Entrepreneurs’ perspective of failure experience

Abstract

This article aims at analyzing the factors which most contributed to business failure in the entrepreneurs’ perception. To achieve this goal, it was developed a brief overview about the concepts of entrepreneurship and their characteristics, as well as on business failure. This article is characterized as qualitative and exploratory research, conducted through semi-structured interviews with seven entrepreneurs who have experienced business failure. From the framework based on Longenecker et al. (1999) and Dotlich and Cairo (2003), three categories of analysis a priori were defined: behavioral characteristics, financial management and internal control, and market relations. After, a protocol was created, which served as the basis for the analysis of the categories that were performed using the analysis content technique. With respect to behavioral traits, arrogance and the omnipotence of the entrepreneurial activity were the ones that stood out as factors that led to failure. With regard to financial management and internal control, it is emphasized that the lack of technical knowledge and experience, and emotional stress can negatively influence the management of the business, while in the market relations category, it was observed that entrepreneurs do not bother to analyze the market environment, in order to identify market needs, but to meet their own desires. It is evident, then, that the most important factor that can lead to business failure, in the interviewed entrepreneurs’ view, is their own behavior.