Most small firms are born to stagnate or die. As we saw in Chapter 1, in the UK most do not grow to any size – almost two-thirds of businesses comprise only one or two people, and often the second person is the spouse. Some 95% of firms employ fewer than 10 employees and 99% fewer than 50 employees. From the VAT statistics we see that half of businesses cease trading within three years of being set up, although, as pointed out, this does not necessarily mean that the closure has left creditors unpaid, and it can be viewed in a positive light as part of the dynamism of the sector as it responds to changing opportunities in the marketplace. What is more, when the number of start-ups increases, the number of businesses ceasing to trade tends to do so as well. The pattern is broadly similar internationally. The younger and smaller the business, the more likely it is to cease trading – a conclusion supported by a review of 34 business closure studies from around the world (Storey and Greene, 2010). A cynical observer might conclude that, in such a turbulent environment, mere survival is a badge of success.
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