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Economic Analysis Letters

Open Access Journal Article

Five Common Finance and Accounting Problems of Start-Up Companies

by Derrald Stice a,* orcid ,  Earl K. Stice b  and  James D. Stice b
a
HKU Business School, University of Hong Kong, Hong Kong, China
b
Marriott School of Business, Brigham Young University, Provo, USA
*
Author to whom correspondence should be addressed.
JEA  2023 2(2):26; https://doi.org/10.58567/jea02020005
Received: 2 March 2023 / Accepted: 7 April 2023 / Published Online: 19 April 2023
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Abstract

You have a product or service for which the world has been waiting. You've scraped together enough cash to get your idea off the ground. You are confident that your business will succeed. And yet, it is often the case that a short time later you are out of business. Numbers from the U.S. Bureau of Labor Statistics indicate that about half of new businesses fail within the first five years. And with those business failures go the life savings and the dreams of the person who started the business. This article describes five finance and accounting pitfalls that should be avoided in order to increase the likelihood that a small business will succeed. Of course, the most common reason for a small business to fail is that customers don't want the product or service. But small businesses are also often killed because of predictable and preventable finance and accounting mistakes: insufficient capital, poor cash management, poor record keeping and controls, improper product pricing, and uncontrolled growth.

Keywords: Start-ups; Cash Flows; Sales Growth; Product Pricing; Internal Controls;
Copyright: © 2023 by Stice, Stice and Stice. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
Cite This Paper
APA Style
Stice, D., Stice, E. K., & Stice, J. D. (2023). Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis, 2(2), 26. doi:10.58567/jea02020005
ACS Style
Stice, D.; Stice, E. K.; Stice, J. D. Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis, 2023, 2, 26. doi:10.58567/jea02020005
AMA Style
Stice D, Stice E K, Stice J D. Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis; 2023, 2(2):26. doi:10.58567/jea02020005
Chicago/Turabian Style
Stice, Derrald; Stice, Earl K.; Stice, James D. 2023. "Five Common Finance and Accounting Problems of Start-Up Companies" Journal of Economic Analysis 2, no.2:26. doi:10.58567/jea02020005
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ACS Style
Stice, D.; Stice, E. K.; Stice, J. D. Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis, 2023, 2, 26. doi:10.58567/jea02020005
AMA Style
Stice D, Stice E K, Stice J D. Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis; 2023, 2(2):26. doi:10.58567/jea02020005
Chicago/Turabian Style
Stice, Derrald; Stice, Earl K.; Stice, James D. 2023. "Five Common Finance and Accounting Problems of Start-Up Companies" Journal of Economic Analysis 2, no.2:26. doi:10.58567/jea02020005
APA style
Stice, D., Stice, E. K., & Stice, J. D. (2023). Five Common Finance and Accounting Problems of Start-Up Companies. Journal of Economic Analysis, 2(2), 26. doi:10.58567/jea02020005

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