HOW DEMOGRAPHIC CHARACTERISTICS INFLUENCE THE FAILURE OF SMALL AND MEDIUM ENTERPRISES?

Abstract

The small and medium enterprises (SMEs) are a vital part of economic growth in each country and their importance locally rising with the more severe economic crisis and globalization. SMEs face numerous challenges in striving to preserve their existence and develop solid business. There are various personal-entrepreneurial, internal and external factors that influence the high failure rate of SMEs. This paper provides a literature review on the factors that influence SMEs failure and proceeds with an analysis of the effects that demographic parameters have on the failure of the SMEs in Serbia. Data were obtained from comprehensive research conducted with the aim to define reasons for the failure of SMEs and possibilities for the recovery after failure. The findings reveal the elements that should be focused on and should be explored in order to understand the SMEs failure causes and provide the opportunity to avoid them.