Several factors contribute to the success or failure of any institution. For SMEs, the ability to grow and develop is hinged on a few critical factors. These factors or bottlenecks include access to finance, lack of managerial skills, equipment and technology, regulatory issues, and access to international markets. Most research on SMEs presents the view that lack of capital is a strong limitation to SME growth.
Although SMEs often cite a lack of business finance as one of the most crucial factors contributing to growth and success, research has shown that lack of business finance can be considered a secondary rather than primary problem. The primary challenge lies within the business structures and relates to weak financial management and unskilled workforce. Other factors that some studies have revealed are the management skills and experience of the owner/manager.
The factors mentioned above are all within the SME's internal environment and are primarily controllable by the SME's owner and managers. Besides, the implementation of proper corporate governance processes can reduce the impact of these constraining internal factors on the SMEs. Each factor will be discussed in subsequent blog posts, with suggested solutions.
Join the conversation and let me know what factors limit your growth or affect your survival the most.
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