AN ANALYSIS OF FACTORS AFFECTING FAILURE OF SMEs

Abstract

This manuscript is presenting the conceptual framework for 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, are based on wide literature review. Based, on the combination of different factors, which were assessed and published in research work of different authors, starting qualitative model for assessment of the most important factors which can lead to failure of SMEs was developed. Based on the conceptual qualitative model, initial questionnaire form was developed, to assess the opinion of the real entrepreneurs who suffered the failure of their previous businesses. The developed questionnaire will be used as the measurement scale for the future quantitative analysis of the issues defined in the qualitative model. 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 factor which leaded to the failure of the real SMEs in the past.