Success Factors of Entrepreneurs of Small and Medium Sized Enterprises: Evidence from Bangladesh – Problem Statement

In Bangladesh, most SMEs operate along traditional lines in production and marketing. There is a growing evidence in literature that the main problem for SMEs in developing countries is not their small size but their isolation, which hinders access to markets, as well as to information, finance and institutional support. A host of factors prevent them from realizing their full potential as entrepreneurs, where they could make significant contribution to society. These factors relate to the characteristics of entrepreneurs, psychological traits, finance, capitalization, marketing, technology, social network, gender, government policy issues, and management and performance of the firms. While several of these challenges are in inherent to many countries, some of them are more severe in South Asia, particularly Bangladesh. It is important that factors be identified that affect the business success of the entrepreneurs in this country.
Research has shown that success is closely connected to education level, experience and age. Also, numerous studies have revealed the relationship of entrepreneurial success to environmental factors such as political environment, government, infrastructure, technology etc. Cooper reported three factors responsible for entrepreneurial development and success at the grass root level. These are antecedent influences (background factors such as family influence, skills and knowledge), the incubator organization (the nature of the organization where the entrepreneurs were employed prior to starting their own business) and environmental factors (e.g., infrastructure, political environment, access to capital, role of government etc).
A closer look into such studies reveals that these environmental and demographic factors in relationship to entrepreneurial success have received scant attention in Bangladesh. Moreover, though the promotion of SMEs development has been a stated objective of successive governments of Bangladesh since 1947, they have not been able to unleash entrepreneurial talents and enhance their success to increase productivity throughout the economy.
Built on theories and research on entrepreneurship, this study has attempted to capture the essence of identification of factors affecting the business success of entrepreneurs of small and medium sized enterprises. One of the major impacts of this study is that it will constitute an aid to policy makers, researchers, academia, and the business community as well for improving the performance of entrepreneurs of small and medium sized enterprises in this country. The purpose of this study is, therefore, to determine factors affecting business success of small and medium-scale entrepreneurs in Bangladesh that relate to demographic and environmental variables (see figure 1) from Bangladesh context.
Research Question
To what extent do demographic factors affect business success of entrepreneurs in SMEs sector of Bangladesh?
To what extent do environmental factors affect business success of entrepreneurs in SMEs sector of Bangladesh?
Research Objectives:
To identify demographic factors that affect business success of entrepreneurs in SMEs sector of Bangladesh
To identify the environmental factors that affect business success of entrepreneurs in SMEs sector of Bangladesh
It is argued that entrepreneurship is environmentally determined phenomenon also reported external environment and demographic factors affecting SME business success. The environmental constraints can make or mar entrepreneurial decision making. This supports the thesis that ability to success is impaired by environmental constraints.
Demographically, age, gender, education, and work experience have been found to have impact on entrepreneurial success. Educated people are creative and innovative and they are always looking for something unique to fill a need or want. The educated and experienced women are more interested in becoming entrepreneurs than non-educated and inexperienced women. People between the age of 25 and 44 are most likely to be involved in entrepreneurial activity.
These demographic and environmental factors are considered for the theoretical framework of our study based on suitability within Bangladesh context. Accordingly the study of key factors affecting success of entrepreneurs in Bangladesh can be grouped into:
Demographic characteristics
Environmental elements

These demographic and environmental factors are considered for the theoretical framework of our study (see figure 1).

Figure-1

Figure 1. Theoretical Framework

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