Factors Affecting Business Success of SMEs

This report analyzes the factors affecting the success of Small & Medium Enterprises (SMEs) in Bangladesh. It identifies three key factors: product and services, external environment, and management know-how, as crucial determinants of SME success. The research utilizes questionnaires, interviews, and statistical analysis to provide valuable insights for entrepreneurs and policymakers in Bangladesh.

Factors Affecting Business
Success Of
Small&Medium
Enterprises(Smes)

Contents
INTRODUCTION...............................................................................................................................3
Summary...........................................................................................................................................3
Strengths............................................................................................................................................3
Weakness...........................................................................................................................................4
CONCLUSION....................................................................................................................................4
REFERENCES....................................................................................................................................5

INTRODUCTION
The thesis is about the factors affecting small and medium enterprises business
success in underdeveloped country like Bangladesh. The objective of the research is to
identify the factors which are hindering the business of underdeveloped countries like
Bangladesh. The reason behind this thesis is to develop the understanding that how people
should start a business by keeping in mind the factors affecting to the success and hence to
decrease the risks of failure and increase the chance of success for commencing a new
business. The outcomes of this study prove to be useful for the entrepreneur’s and the policy
makers of the country. In this study the six factors are found which effects the success of
business. The research to find the outcome is being a framework of various theoretical as well
practical analysis.
Summary
The article is about the factors affecting the small and medium sized enterprises to the
success of the business. The research has been carried out by the scholar that in the success of
SMEs of the underdeveloped country such as Bangladesh there are some factors which
influences them (Ayuso, S. and Navarrete‐Báez, F.E., 2018). The factor includes
characteristic of SMEs, management and know-how, products and services, the way of doing
business and cooperation, resources and finance, and external environment. The significant
response from the private sector is remarkable and suggested that liberalisation must be
measure by the supplemented proactive policies to attain the desired goal due the intense
attention in the back drop of the various structural and trade policy. Small medium
enterprises stimulate private ownership, entrepreneurial skill and can quickly adopt the
changes in market demand supply (Bouazza, Ardjouman, and Abada, 2015). Therefore, the
dynamic environment causes more uncertainty in small and medium organization as compare
with the large organization. In this research there are some factors like services, management
know how ad external environment which effects the business success of SMEs in
Bangladesh. In this report the six hypothesis stated out of which four were accepted as per the
research. It has been founded that there are three factors that affect the success of
underdeveloped countries.
Strengths
The strength of this report will be the appropriate method used by the scholar to identify
the various factors that influences the small and medium sized industry. The researcher
has conducted this research with the help of interview and questionnaires. The
advantages of questionnaire Cost effective and inexpensive. Once a questionnaire is
designed it can be mass produced easily and distribution is also inexpensive. Generally
quick and easy to complete. Typically, they are short and easy to understand. Privacy
usually not an issue and issues easily resolved. Design flexibility (Ahmad and et.al.,
2015). Whereas the advantages of the interviews include the Good response rates. Being
in the room with the person results in very high response rates. More information is
usually provided. Subjects can elaborate on answers. Time taken can be longer and
follow up questions to responses can be used. The interviewer can help if there is a
question that isn’t understood by the subject. Therefore, researcher has uses the various
tools like SPSS, which is used to identify the results of the research. This software is the
biggest strength of the research report such as SPSS can develop new variables from

existing information. Therefore, it can provide the various types of analysis which are not
available in the package programs. The uses of SPSS can help in the manipulation of
data. The scholar has used various tools like reliability analysis, as reliability analysis,
frequency analysis, regression analysis, one-way ANOVA and T-test which proves very
beneficial in identifying the appropriate result of the research. Therefore, the research
topic is also very one important and a strength of this report. As it provides the
information to the public of Bangladesh to keep in mind the factors affecting the success
of business.
Weakness
The methods used for the research like questionnaires and surveys have various
weaknesses like the most serious drawback of this method it can be used effectively with the
advantages that only the educated people of underdeveloped countries can understand the
question well. This method do not prove practicable for those who are illiterate. Even if they
are educated there are number of people who are not interested in this particular enquiry
which conducted. the questionnaire after filling, number of them may supply incorrect
information. Therefore, this method applies the high degree of non-responsiveness and
consequently, the result based on the information supplied by small portion of the selected
individuals cannot regarded as reliable.at times (Ayuso and Navarrete‐Báez, 2018). The
informants are not willing to give written information in their own hand writing on certain
personal issues like income, profit of the organization and so on. On the other interviews
have also some weaknesses like this method can be used only for the intensive studies. So it
is not suitable for the extensive analysis and studies. Therefore, the major drawback of this
method is that it is absouloutly subjective in nature and its investigation success is largely
depending upon the intelligence skills techniques and diplomacy. If the investigator is not
intelligent, witty or skilful enough to understand verbal or non-verbal expressions of the
interviewing audience the result obtained will be not reliable for any analysis.
CONCLUSION
The researcher has attempted to identify the important factors that affects the business
success of small medium enterprise in Bangladesh. It has been identified that there are three
factors such as product and services, external environment’s and management know how are
most important elements or determinants which are influencing the success of the small and
medium sized enterprises. In the research it has been identified that the customers of
Bangladesh are being highly influenced by the innovative product and services provided to
them by the small medium sized enterprises. It is also find that many of the SMEs uses the
Porter’ Generic strategies which includes cost leadership, differentiation and focused for the
continuous success in Bangladesh. External Environment hypothesis accepted as social
network help entrepreneurs in Bangladesh to reduce risks and transaction costs. The Way of
doing Business & Cooperation hypothesis accepted as inter-firm cooperation contribute
positively to gaining organizational legitimacy.

REFERENCES
Books and Journals
Yeboah-Boateng, E.O. and Essandoh, K.A., 2014. Factors influencing the adoption of cloud
computing by small and medium enterprises in developing economies. International Journal
of Emerging Science and Engineering. 2(4). pp.13-20.
Ahmad, S.Z, and et.al., 2015. An empirical study of factors affecting e-commerce adoption
among small-and medium-sized enterprises in a developing country: Evidence from
Malaysia. Information Technology for Development. 21(4). pp.555-572.
Ismail, N.A. and King, M., 2014. Factors influencing the alignment of accounting
information systems in small and medium sized Malaysian manufacturing firms. Journal of
Information Systems and Small Business. 1(1-2). pp.1-20.
Bouazza, A.B., Ardjouman, D. and Abada, O., 2015. Establishing the factors affecting the
growth of small and medium-sized enterprises in Algeria. American International journal of
Social science. 4(2). pp.101-115.
Ayuso, S. and Navarrete‐Báez, F.E., 2018. How Does Entrepreneurial and International
Orientation Influence SMEs' Commitment to Sustainable Development? Empirical Evidence
from Spain and Mexico. Corporate Social Responsibility and Environmental
Management. 25(1). pp.80-94.