COMMERCIAL HEALTH MONITORING OF ENTREPRENEURIAL FIRMS USING PROCESS CONTROL TECHNIQUES

The work of Scott, Bruce and Cooper on small firm growth and development is reviewed. It is shown that by adapting exponential smoothing forecasting procedures it is possible to monitor the commercial health of a small firm. This is achieved by ‘tracking’ key indicators and producing an exception message when a signal exceeds certain predetermined control limits. The procedure is equally effective for either a step or ramp change in the underlying input data. This suggested approach requires little sophistication in either data or technique and has a practical application to small firm management, while adding to our understanding of the process of growth of small businesses.