An Empirical Study on Factors Affecting Success of Small and Medium Enterprises with Special Reference To Elpitiya DS Division

K. Nirushan, Payagalage Ayanthi Madumali

Abstract


– Small scale businesses provide a greater contribution to the economic development in a developing country like Sri lanka. However most of them fail within first few years. The problem statement in this research is that there is insufficient knowledge relating to the factors contributing to the failure or success of small businesses in Elpitiya divisional secretariate. The study was undertaken with the objective of identifying the key factors affect the success/failure of small business enterprises and create awareness of how people should initiate and lead their businesses by looking at factors influencing business which may help to reduce the risk of failure and raise probabilities for success. The study considered eight factors that influence the business success. These factors are: founder experience, socio economic background, skills and knowledge, values and expectation, industry characteristics, management and resources, labour and technology and financial base. The theoretical framework has been drawn out and questionnaire was designed based on the factors chosen. The data were collected from 200 respondents which comprise 100 successful and 100 failed entrepreneurs. Hypotheses were developed to study the determinants and tested with SPSS and few hypotheses were accepted. The analysis revealed that the most significant factors affecting success of businesses were education, management and resources, financial base, and socio economy. Findings of this study are useful for entrepreneurs and policy makers of the country.


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