Problems of Small Businesses in the UK Related to Financing and Surviving against Larger Competitors - Literature review Example

Not only that SMEs generate the bulk of employment and contribute significantly to the overall GDP but they create value for their customers and the entire society. However, SMEs also face significant challenges, which are unique on their own.

Many business start-ups that fail to address those challenges become history. Amongst these challenges, problems related to financing and facing competitive pressures from the larger players in the industry rank at the top of the list. These challenges and problems have ensured the decline of many SMEs as well. This investigative report is an attempt to explore these problems faced by small businesses within the UK related to financing and surviving against larger competitors. The same has been presented under the heading of critical literature review.

The common perception about entrepreneurial ventures and small businesses is that their growth slows down during a recession like large corporations and big businesses but the evidence coming from Berger and Udell reveals that the same might not be true. 1 Respondent identifying competitive advantage enjoyed by larger firms 22 Table 2 Respondents on their perceived competitive advantages 24 Introduction It was in the year 1971 when the Bolton Committee presented its report concerning small businesses, made the first attempt to define small, medium, and large-sized firms and highlighted the indispensable importance of SMEs for the British economy.

Not only that SMEs generate the bulk of employment and contribute significantly to the overall GDP but they create value for their customers and the entire society. However, SMEs also face significant challenges, which are unique on their own. Many business start-ups that fail to address those challenges become history. Amongst these challenges, problems related to financing and facing competitive pressures from the larger players in the industry rank at the top of the list. These challenges and problems have ensured the decline of many SMEs as well.

This investigative report is an attempt to explore these problems faced by small businesses within the UK related to financing and surviving against larger competitors. The same has been presented under the heading of critical literature review. The study then narrow downs the focus to a small convenience store within the UK and conducts questionnaire-based research to explore the dynamics of problems and challenges faced by small convenience stores in the above-mentioned areas. Critical Literature Review The common perception of entrepreneurial ventures and small businesses is that their growth slows down during a recession like large corporations and big businesses but the evidence coming from Berger and Udell (2011) reveals that the same might not be true.