The Effects of Environmental Uncertainty on Young and Small Businesses

Entrepreneurs face a wide variety of uncertainties in managing new or small businesses. Uncertainty can potentially magnify the liability of newness faced by younger businesses, as well as the challenges that smaller businesses face in having adequate resources to maintain performance. Here we present a model of environmental uncertainty tied to industry, geographic and macro-level effects. We hypothesize a moderating effect of uncertainty upon both new and small business performance, and present a pilot test of the model using NFIB data that supports one of our two hypotheses.