Profile of entrepreneurs of SME sector in Sri Lanka: motivations, perceived success factors and problems

Abstract

Seventy six entrepreneurs in Colombo district, Sri Lanka were surveyed to determine their motivations for business ownership; the perceived success factors, and their problems. Data was collected through personal interviews from the list of entrepreneurs who were following certificate course on entrepreneurship at Open University of Sri Lanka. Based on survey responses, the primary reasons for starting a business are to increase income, to obtain personal freedom, and to secure job security. According to the factor analysis, small and medium-sized enterprises owners are driven more by income related rewards than intrinsic rewards. The most important business success variables are entrepreneur related characteristics, product and finance issues, social connections and human capital. Management skills and government connections were also cited as critical success factors. The most serious problem faced by small entrepreneurs in Sri Lanka is the unreliable employees. Other important problems include weak economy, unable to obtain long term finance, and too much competition.