Factors Determining the Success of SMEs in Bangladesh

There is a paramount importance of SME entrepreneurs in a developing economy like Bangladesh. It is often perceived as the prime component of Bangladesh economy. These sector produces and distributes products and services to hundred sixty million people of Bangladesh. Therefore, the success of this sector determines economic status of the economy of Bangladesh which is dependent on a number of factors. Hence, this study aims at identifying the factors that are the instrumental to the success of the SMEs in Bangladesh. By reviewing an extensive literature, the study identified a number of factors that are the determinants of the success of the SMEs. One hundred and thirty two data have been collected from the different types of SME entrepreneurs involved in small manufacturing, wholesaling, retailing, and the like. The factors were reduced to eight factors by using a multivariate statistical technique like Factor Analysis. Multiple Regressions have been performed to identify the significant factors from the factors identified by Factor Analysis. Results show that the success of the SMEs is determined by the entrepreneur's authority on business and the market strategy followed, nature and type of business and financial supports, management know-how, use of modern technology, market accessibility and the networking, government policy and support, favorable external environment, and the owner's personal qualities. This study suggests that the SMEs entrepreneurs must have the command over their businesses and must follow proper marketing strategies for the success of their businesses