Factors that Affect Small Business Performance in India

Small business firms play an important role in the Indian economy. This study extends the findings of Gill and Biger (2012) and others on the factors that affect perceived small business performance. Small business owners from Punjab area of India were surveyed using a non-experimental field design to learn their beliefs and feelings regarding factors that affect the performance of their small businesses. This paper brings empirical evidence to the speculations about the factors affecting Small Business Performance (SBP). In particular, the findings of this paper indicate that when other factors are held constant i) Market Challenges (MC) and ii) Regulatory Issues (RI) are perceived as factors that negatively affect SBP. The findings also indicate that when Sales (‘past success’) is controlled, iii) Lack of Financing (LOF) is perceived to have a negative impact on SBP. The impacts of these factors do not differ between retailers and manufacturers. These findings may be useful for the Indian governments and small business management advisors.