Why SME’s go bankrupt is a topic that fosters a lot of myths. I attended last week a workgroup at the University of Liege (Belgium) organized by entrepreneurship researchers from Aachen, Maastricht, Eindhoven, Hasselt (B) and Liege (B). Bankruptcies were discussed based on real, tangible data.
The discussions were for some of them pretty technical and academic by nature but one of them deserves to be know from a larger audience. It is the work of Nathalie Crutzen who obtained her PhD from the University of Liege in 2009 for her work on the bankruptcy of sme’s. As part of her research work Nathalie attended the sessions of the Court of Commerce of Liege and came to the following conclusions (quote from her presentation).
There are three sources of failure :
- Firms with deficiencies in strategic management (28%) Deficient management of the interrelation between the firm and its environment (market/environment analysis, anticipation, adaptation, strategy)
- Firms with deficiencies in operational management (37%) Deficiencies in finance/accounting, administration, day-to-day management management(planning, control, human resources management), etc.
- Totally badly-managed firms (26%) Basically a combination of 1 and 2
Nathalie kindly accepted to make her Powerpoint presentation available. You’ll find it below.
Posted in Entrepreneurship.