Abstract
Each year in the United Kingdom over 300 000 businesses have set up, and 300 000 have closed down. Half of these new businesses cease trading within three years of being created, lowering small businesses average life down to five years.
Among the failed businesses, only 10% close involuntary due to bankruptcy, and the remaining 90% close because the business was not successful, did not provide the return on investment desired, or was too much work for their efforts. Those shut-downs often put owners in difficult positions, mainly when they have resorted to borrowings, and have opted for unlimited liabilities status. As well as its devastating financial consequences, small business failure affects entrepreneurs' self-confidence and well being. Moreover, these impacts do not simply concern those who are responsible for the business; they have also serious effects on their families and relatives. Furthermore, those who decide to launch a new business following the shut-down of their enterprise, often tend to be considered with distrust, and face great difficulties to finance their new projects.
