An Analysis and Classification of Problems in Small Business

DR. ZUELI HUANG AND DR. ALAN BROWN are research fellow and associate professor respectively at the Small and Medium Enterprise Research Centre at Edith Cowan University, Perth, Australia An understanding of the problems faced by small businesses is of practical importance for those involved in and promoting small businesses.. Although there have been studies which have classified problems encountered by business managers, they have largely focused on large or fast growing businesses. There has been little systematic research into the types of problems encountered by small businesses. This paper investigates the tyes of problems that small businesses face and the relative significance of these problems through analysing a database of 973 small firms contained in the contact log of the manager of a small business support programme over a period of two years. Results show that the most frequently occurring problem areas are: marketing, human resource management, and general management. Specific types of problems in these areas are discussed along with the implications from these results.