Small businesses have "small business problems" with respect to technology, marketing power, financial ability etc. It is usually difficult for small business to survive and grow consistently. This study deals with the development of a model evaluating the business growth potential with special emphasis to small business.
In order to evaluate the growth potential of technology-oriented small business, evaluating dimensions were classified into entrepreneur's characteristics factor, technology factor, marketing factor, financial factor.
The procedures to develope the model were as follows
First, 34 indicators were selected and by the Pearson correlation analysis 11 indicators were deleted, and factor scores were calculated by weighting the others subjectly.
Secondly, Business Grocoth Potential Index (BGPI) was calculated by the multiple regression analysis of these factors. The result gives the following relationship.
BGPI =-42.044+0.418(ENTRE)+0.549(TECHN)+0.387(MKTIN)+0.237(FINAN)
Where ENTRE : Entreproneur's characteristic factor
TECHN : Technology factor
MKTIN : Marketing factor
FINAN : Financial factor
Thirdly, the scores of technology factor, marketing factor, financial factor, and BGPI were transformed into t-value (t=$Xi-\bar{X}/S, where \bar{X}$ : Sample mean, S: Sample standard deviation) in order to analize the relative status of the technology, marketing power, financial ability, and the business growth potential of a firm.
However, organizational factor, and the important variables of entrepreneur's characteristics factor were not incorporated into the model. Also, there remains some problems in dealing with time leg. Finally, the size of samples (n=20) was too small to support the model strongly.
