Factors that Affect the Growth of Small Business

Young or starter entrepreneurs do not have the balance as big businesses do. Most times, it is the case because of the factors that affect the growth of small business. They are not only higher but the truth holds that they can be various so much that they have the capability of drowning careless leaders.

Small businesses like small fishes are susceptible and as so, can be prone to a lot of early disasters such as personal doubts or incapability among others. It is therefore a wise move for the small business owner to always have the plan B that will help him survive the hurdles and murky path of possible winning or failure.

Well, the purpose of this research is to examine the impact of factors, related to important strategic characteristics, affecting growth of small business, particularly considering a specific economic and cultural context. Identifiably, many of the determinants for success or failure for small businesses are rooted in those two contexts.

Growth is considered as a phenomenon which is determined by various factors, in and out of control by the owner or the management of small businesses. One of the main problems in analyzing growth of small business is that most of the research considers the extent of growth.

The good news, the extent of this growth is realized by the factors that affect the growth of small business. Below are then a list of those factors that may mar or make your business:

Business Structure and Management 

How the business is structured, its goals and the performance of its management team, in particular their ability to make rational decisions about its operation, will highly impact the successful development of the business.


Variation in size, scope and buoyancy of demand in local markets is likely to affect growth opportunities. On the supply side, variation in the cost and availability of labor, premises and services are also influential.
Nevertheless, owner-managed businesses are often adaptable, employing different strategies to deal with these local variables so that their impact is minimized.

Read Also: Financial Management Tips for Your Small Business

Behavioral and Personal Traits

A business leader’s characteristics such as behavior, personality and attitude can certainly have an impact of the growth of the business. Furthermore, their capabilities, including education and training create higher expectations in some industry sectors, whilst their social capital influences access to resources.
Management experience, family history, functional skills and relevant business sector knowledge are also ingredients that will influence the recipe for success.

External Factors

Whilst the above two considerations can be managed to an extent, external factors over which we have virtually no control are also going to have an effect on the business’ growth. Such factors are the cultural, political and economic conditions of the country or region in which the company operates.
The triggers for enterprise growth are found along a continuum from the attributes possessed by individuals to complex interrelationships among often changing cultural, political and economic conditions at national, regional and local levels.

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