Whitman School of Management at Syracuse University
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Critical Problems of Rural Small Businesses: A Comparison of African-American and White-Owned Formation and Early Growth Firms
Vol. Volume 10, Number 3 December/2005

Michael L. Harris, W.Lee Grubb III and Frederic J. Hebert
This study investigated the critical problems encountered by African American and White-owned formation and early growth firms in rural businesses. Analyses were conducted to determine the most critical types of problems encountered by these businesses and the relationship between the types of problems reported and the owner’s race and firm’s developmental stage.  Strategic problems were the most critical problems by business owners in the sample, regardless of race or developmental stage, followed by administrative and operations.  Although no significant relationship was found between the type of problems and the owner’s race, a significant relationship was found between problem type and the firm’s developmental stage, such that businesses in the formation stage are more likely to encounter strategic problems and early growth firms more often experience administrative problems.