The Reasons for SME’s Failure, Comparative Analysis and Research

Abstract

This manuscript is presenting the preliminary results of research of the factors which are influencing the failure of SMEs. The manuscript is just the starting base for the larger research that will address the analysis of the most important factors that lead to closure of SMEs in different regions of the Europe. Basic factors of interest, which can be segmented as the individual characteristics of the entrepreneur or non-individual characteristics of the SMEs, based on wide literature review, were used to define the measuring scale for assessment of the most important factors which can lead to failure of SMEs, in previous research [1]. Such defined initial questionnaire form was used, in a pilot test research, to assess the opinion of the real entrepreneurs who suffered the failure of their previous businesses in Serbia. The idea of the research is to develop adequate measuring scale, which will be used to measure the potential failure of the existing SMEs, based on the rates developed in accordance to the factors which lead to the failure of the real SMEs in the past, which will be useful tool for wide European business environment.