Small firms and businesses have been increasing in terms of their development for the past two decades. The trend toward the growth of small enterprises and businesses is forecasted to grow and a steady pace in the following years as well. The main reason for this is the use of the entrepreneurial approach towards the management of the businesses and firms. The approach has enabled the small businesses to take higher risks for higher profits while being innovative in terms of their operations and their marketing strategies.
Some of the factors that can directly affect the growth and the success of the micro and small firms are the age of the firms, the size of the firms, the growth that they have been facing in the past and the industry type in which they are operating. Aside from this the human resource, the technology and the management at the firm can also directly affect the success and growth of the firm in the following years. “Factors influencing where firms are within the developmental framework are posited, including the entrepreneur’s psychological profile, lifecycle stage of the business, and descriptive characteristics of the venture. It is also proposed that the implementation of ethical structures will impact perceptions of the clarity and adequacy of the ethical standards of the firm and the firm’s preparedness to deal with ethical challenges as they arise.” (Morris et al., 2002) Additionally the risk bearing capacity and the capability of the business, the key employees and management at the company are also crucial success factors.
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