A systematic literature review on business failure of small and medium enterprises (SME)

Abstract

Small and Medium enterprises are back bone of developed and developing economies around the world. However, the sector has not provided desired level of contribution and suffers from high failure rate worldwide. The main purpose of this study is to critically evaluate the causes of failure of SMEs based on literature. The methodology used this study to review literature systematically using sample of 95 articles published from 1968-2016. The SME businesses failed due to the lack of availability and optimal combinations of resources and opportunities, limited access to finance, size, age, poor market conditions, unbeatable competition, isolation, inadequate skilled labor, wrong pricing, lack of institutional support, innovation and necessary skills of entrepreneurs. Improving entrepreneur skills, transform to advanced technology, enhancing staff skills help to reduce business failure. The findings of the study useful in identifying practices to be avoided and in aiding educators, consultants, and SME business support agencies in meeting the needs of the business community.