Furthermore, specific factors affecting probability for a firm to fail identified (Storey, 1994b). These are businesssize, age, property, activity sector, former performance, personnel, geographical location, business type, macroeconomic environment, government funding (subsidies) and some other reasons.
It is commonplace for researchers that failure is closer in the early years of businesses and in particular
immediately after their launch, with failure rates ranging between 50 and 80% in first five years of their life.
Business failure factors divided into two categories (Murphy, 1996): environmental factors and symptoms of
management disability. Apart from environmental factors, there are three categories of failures mentioned:
functional knowledge, managerial skills and managerial behaviour.
Factors affecting smes’ size such as characteristics of entrepreneur, characteristics of enterprise, management strategies, and external environment’s influence constitute elements of a successful or non-successful business
(Carter & Jones-Evans, 2006). The latter, by some writers such as Storey (1994b), is not considered as a distinct factor, but seems to separate large firms from smes, concerning their ability to control these influences.