Diversification Patterns Among Small Businesses

Journal of Small Business Management, (1990), 28:4, pp. 60-70

Posted: 9 May 2016

See all articles by Monty Lynn

Monty Lynn

Abilene Christian University

N. L. Reinsch

Georgetown University - Department of Management

Date Written: October 1, 1990

Abstract

Questionnaire responses from 91 owner-managers of diversified businesses in Texas were studied to identify diversification patterns among owner-managed small businesses. The results suggest that financial growth is the usual reason for diversifying and that owner-managers are more likely to start rather than to buy or inherit a second business. Respondents tended to operate relatively distinct businesses rather than closely related, highly integrated ones and to have little experience in the new business area. Although a diversification frequently shared accounting/consulting services among its business lines, no other resource was shared by as many as half of the diversifications. Most of the diversifications studied were profitable, and in most cases the owner would make the same decision again to diversify.

Keywords: Diversification, small business

JEL Classification: L20, L23

Suggested Citation

Lynn, Monty and Reinsch, N. L., Diversification Patterns Among Small Businesses (October 1, 1990). Journal of Small Business Management, (1990), 28:4, pp. 60-70, Available at SSRN: https://ssrn.com/abstract=2776730

Monty Lynn (Contact Author)

Abilene Christian University ( email )

ACU Box 29325
Abilene, TX 79699
United States
325-674-2593 (Phone)

N. L. Reinsch

Georgetown University - Department of Management ( email )

3700 O Street, NW
Washington, DC 20057
United States

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