Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center
Small business is the backbone of the U.S. economy; when the financial literacy skills of entrepreneurs fall short of those needed to operate a successful business, it is more than the individual business at risk. In 2012, 14 small businesses requesting growth-acceleration consulting services from t...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
National Numeracy Network
2014-01-01
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| Series: | Numeracy |
| Subjects: | |
| Online Access: | http://scholarcommons.usf.edu/numeracy/vol7/iss1/art3/ |
| _version_ | 1811201038799077376 |
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| author | Pearl Dahmen Eileen Rodríguez |
| author_facet | Pearl Dahmen Eileen Rodríguez |
| author_sort | Pearl Dahmen |
| collection | DOAJ |
| description | Small business is the backbone of the U.S. economy; when the financial literacy skills of entrepreneurs fall short of those needed to operate a successful business, it is more than the individual business at risk. In 2012, 14 small businesses requesting growth-acceleration consulting services from the Florida Small Business Development Center at the University of South Florida were assessed financially as part of the service provided by the Center. Financial ratios were used to analyze the business’s financial condition. While performing the financial analysis of these firms, we also surveyed the business owners to determine their level of financial understanding and their use of financial statements in making management decisions. We found a strong association between the small businesses' financial strength and the business owners’ habits of mind with regard to their financial statements: for 7/14 of the businesses, the business owner did not regularly review financial statements, and 6/7 of those businesses were experiencing financial difficulties; conversely, 7/14 of the businesses in the study were experiencing financial difficulties, and for 6/7 of them, the business owner did not regularly review the financial statements. |
| first_indexed | 2024-04-12T02:15:09Z |
| format | Article |
| id | doaj.art-f39cdf5ca5674e49ae7f3eb20ebb2b20 |
| institution | Directory Open Access Journal |
| issn | 1936-4660 1936-4660 |
| language | English |
| last_indexed | 2024-04-12T02:15:09Z |
| publishDate | 2014-01-01 |
| publisher | National Numeracy Network |
| record_format | Article |
| series | Numeracy |
| spelling | doaj.art-f39cdf5ca5674e49ae7f3eb20ebb2b202022-12-22T03:52:17ZengNational Numeracy NetworkNumeracy1936-46601936-46602014-01-01713http://dx.doi.org/10.5038/1936-4660.7.1.3Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development CenterPearl Dahmen0Eileen Rodríguez1University of South FloridaUniversity of South FloridaSmall business is the backbone of the U.S. economy; when the financial literacy skills of entrepreneurs fall short of those needed to operate a successful business, it is more than the individual business at risk. In 2012, 14 small businesses requesting growth-acceleration consulting services from the Florida Small Business Development Center at the University of South Florida were assessed financially as part of the service provided by the Center. Financial ratios were used to analyze the business’s financial condition. While performing the financial analysis of these firms, we also surveyed the business owners to determine their level of financial understanding and their use of financial statements in making management decisions. We found a strong association between the small businesses' financial strength and the business owners’ habits of mind with regard to their financial statements: for 7/14 of the businesses, the business owner did not regularly review financial statements, and 6/7 of those businesses were experiencing financial difficulties; conversely, 7/14 of the businesses in the study were experiencing financial difficulties, and for 6/7 of them, the business owner did not regularly review the financial statements.http://scholarcommons.usf.edu/numeracy/vol7/iss1/art3/Small businessentrepreneurshipfinancial literacyfinancial statementsfinancial ratiosquantitative literacy |
| spellingShingle | Pearl Dahmen Eileen Rodríguez Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center Numeracy Small business entrepreneurship financial literacy financial statements financial ratios quantitative literacy |
| title | Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center |
| title_full | Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center |
| title_fullStr | Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center |
| title_full_unstemmed | Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center |
| title_short | Financial Literacy and the Success of Small Businesses: An Observation from a Small Business Development Center |
| title_sort | financial literacy and the success of small businesses an observation from a small business development center |
| topic | Small business entrepreneurship financial literacy financial statements financial ratios quantitative literacy |
| url | http://scholarcommons.usf.edu/numeracy/vol7/iss1/art3/ |
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