Kashfia Ahmed
Department of Business Administration, East West University
43 Mohakhali C/A, Dhaka -1212, Bangladesh
Tel: 880-2-9882-308 Ext – 186 E-mail: kashfia_ahmed@hotmail.com
Tanbir Ahmed Chowdhury
Department of Business Administration, East West University
43 Mohakhali C/A, Dhaka -1212, Bangladesh
Tel: 880-2-9882-308 Ext – 244 E-mail: tanbir@ewubd.edu
Abstract
In the context of Bangladesh, the development of Small and Medium Enterprises (SMEs) can be considered as a vital
instrument for poverty alleviation and ensure the rapid industrialization. In this paper the authors have tried to identify the
problems of SMEs of Bangladesh. The performance of SMEs of Bangladesh especially in terms of employee turnover rate,
quality assurance, allocation of funds, marketing activities have been found significantly below the international standard.
The sector gets negligible support from government. The rate of development of SME is not up to the expectation. In
order to overcome the problems a few suggestions for the development of SMEs are given by the authors.
Keywords: SME, Finance, Employee, Capital
- An overview of SME1.1 SME: around the world According to the European Union (2003) SMEs are defined as enterprises which have at most 250 employees and an annual turnover not exceeding 50 million Euros. Further there is the distinction of small enterprises — they have fewer than 50 staff members and less than 10 million Euros turnover — and micro-enterprises (less than 10 persons and 2 million Euros turnover).
According to the World Bank (2006) medium enterprises are defined as enterprises which have at most 300 employees and an annual turnover not exceeding 15 million US dollars. Further there is the distinction of small enterprises — they have fewer than 50 staff members and up to 3 million US dollars turnover — and micro-enterprises have up to 10 persons and $100,000 turnover.
In the UK, sections 382 and 465 of the Companies Act 2006 define a SME for the purpose of accounting requirements.
According to this a small company is one that has a turnover of not more than £5.6 million, a balance sheet total of not more than £2.8 million and not more than 50 employees. A medium-sized company has a turnover of not more than £22.8 million, a balance sheet total of not more than £11.4 million and not more than 250 employees. It is worth noting that even within the UK this definition is not universally applied. In the USA, the definition of small business is set by a government department called the Small Business Administration (SBA) Size Standards Office. The SBA uses the term “size standards” to indicate the largest a concern can be in order to still be considered a small business, and therefore able to benefit from small business targeted funding. The concern cannot be dominant in its field, on a national basis. It must also be independently owned and operated. Unlike the UK and the European Union which have simple definitions applied to all industries, the US has chosen to set size standards for each individual NAICS coded industry. This variation is intended to reflect industry differences in a better way. The most common size standards are
500 employees for most manufacturing and mining industries
100 employees for wholesale trade industries
$6 million of annual receipts for most retail and service industries
Keywords: SMEs, Entrepreneurs, Success, Bangladesh, Entrepreneur’s Authority on Business, Marketing Strategy, Factor Analysis, Multiple Regressions
References
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Factors Affecting Business Success of Small & Medium Enterprises (SMEs) in Thailand
