The Business Launch Decision: An Empirical Investigation of Reasons for Not Starting a New Business

  • Howard E. Van Auken Iowa State University

Abstract

This article presents  the results of a survey that examined the business launch decision.  All of the individuals in the study al/ended a workshop on how to evaluate a business idea and launch a new venture. All of the individuals who all ended the workshop were interested in, but decided against, launching a new venture. The results of the study indicate that time constraints, availability of capital, and risk tolerance are perceived as significant obstacles by potential new business owners. Significant differences in the ranking of obstacles were found relative to whether the individuals believed that the obstacles to launch could be overcome, age of the respondent, and whether the individuals had previously owned a business. In addition, individuals who were more highly educated and had previous business ownership were less likely to launch a new business subsequent to the workshop. The results of the study can be used by service providers and consultants who develop training programs that assist individuals in the screening of business ideas and launching of new firms. The results of the study also can be incorporated into college curriculum to provide students with insight into obstacles impacting on business launch.

References

Bhave, M., ( 1 994). A process model of entrepreneurial venture creat ion. Journal of Business Venturing, 9, 223-242.
Bird, B (1992). The operation of intentions in time: The emergence of the new venrure. Entrepreneurship: Theory and Practice, 1 7, ( I ), 1 1-20.
Bull, I., & Willard, G. ( 1993). Towards a theory of entrepreneurship. Journal of Business Venturing, 8, 183-195.
Campbell, C. (1992). A decision theory model for entrepreneurial acts. Entrepreneurship: Theory and Practice, (I ) 21-27.
Caner, N., Ganner, W. & Reynolds, P. ( 1 996). Exploring stand-u p event sequences. Journal of Business Venturing. 1 1 151-166.
Chrisman, J., Hoy F. & Robinson, R. ( 1 987). New venture development: The costs and benefits of public sector assistance. Journal of Business Venturing, 2, (4) 315-328.
Eisenhauer, J. (1995). The entrepreneurial decision: Economic theory and empirical evidence. Entrepreneurhsip: Theory and Practice, 67-79.
Gatewood, E., Shaver, K. & Ganner, W (1995). A longirudinal study of cognit ive factors influencing start-up behaviors and success at venture creation. Journal of Business Venturing, 10, 371-391.
Greenberger, D., & Sexton, D. ( 1988). An interactive model of new venture initiation. Journal of Small Business Management, 26,( 3) 1-7.
Hansen, E. & Allen, K. ( 1992). The creation corridor: Environmental load and pre­ organization information-processing. Entrepreneurship: Theory and Practice. 1 7, (1) 57-65.
Herron, L., & Robinson, R (1993). A strucrural model of the effects of entrepreneurial characteristics on venture performance. Journal of Business Venturing, 8 281-294.
Herron, L., &. Sapienza, H. (1992). The Entrepreneur and Initiation of New Venture Launch Activities, Entrepreneurship: Theory and Practice, 17, ( I ), 49-55.
Hisrich, R. & Peters,M. (1998). Entrepreneurship, 4ih ed., Boston, MA :Irwin McGraw-Hill Publishers.
Katz, J. ( 1 992). A psychosocial cognitive model of employment status choice. Entrepreneurship: Theory and Practice, 1 7, (I ), 29-36.
Kean, R., Gask ill, L,. Leisstritz, L., Jasper, C., Shoop, H., Jolly L. & Sternquist, B. ( 1 998). Effects of community characteristics, business environment, and competitive strategies on rural retail business performance. Journal of Small Business Management, 36, (2), 45-57.
Kuratko, D. & R. Hodgetts (1998). Entrepreneurship: A contemporary approach, 4th ed., Dryden Press, Fon Wonh, TX.
Kuratko, D., Hornsby J. & Naffziger, D. (1997). An examination of owner's goals in sustaining entrepreneurship. Journal of Small Business Management, 35, (1), 24-33.
Learned, K. (1992). What happened before the organization? A model of organizational formation. Entrepreneurship: Theory and Practice, 1 7, (I ), 39-48.
Naffziger, D., Hornsby J. & Kuratko, D. ( 1994). a proposed research model of entrepreneurial motivation. Entrepreneurship: Theory and Practice. 1 8, (3) 29-42.
Reynolds, P., ( 1 994, August). Reducing Barriers to Understanding New Firm Gestation: Prevalence and Success of Nascent Entrepreneurs. Paper presented at the Academy of Management Meeting, Dallas, TX.
Starr, J. & Fondas, N. (1992). A model of entrepreneurial socialization and organizational formation, Entrepreneurship: Theory and Practice, 67-76.
Timmons, J., (1999). New venture creation, 4ih ed. Chicago, I L: Irwin.
Published
1999-06-17
How to Cite
VAN AUKEN, Howard E.. The Business Launch Decision: An Empirical Investigation of Reasons for Not Starting a New Business. Journal of Small Business Strategy, [S.l.], v. 10, n. 2, p. 43-55, june 1999. ISSN 2380-1751. Available at: <http://libjournals.mtsu.edu/index.php/jsbs/article/view/414>. Date accessed: 25 may 2018.
Section
Articles