Factors Influencing Small Business Start-ups in Sri Lanka

Abstract

This study examines the factors influencing small business start-ups in Sri Lanka. For the past decade, SMEs has been one of the driving forces strengthening the economy of the country. They begin with small business startup and make profit then enlarge themselves to be medium business. Small and medium enterprises serve as the drivers of socio-economic development due to their important role in GDP growth, new job creation and entrepreneurship. The primary objective of this research is to identify the key factors influencing small business start-ups including SME owners’ education, risk tolerance, financial availability, age, gender and business experience. A quantitative research approach was adopted, using a survey of 350 SMEs from nine provinces in Sri Lanka. Approximately 40 samples collected from each province and total sample was 350. Correlation, and regression analysis were employed to analyze the data. The findings reveal that education, risk tolerance, age and business experience are the significant predictors of business start-ups. The study emphasizes identifying key factors to improve start-up process of SMEs. Moreover, highlights the crucial role of social support networks and education in shaping business start-ups. The results suggest that targeted education programs and supportive environments are essential for improving business start-ups in Sri Lanka.