Small business

partners
PLANS
- Excessive tying of
permissions and start-up
aid to business plans
- Over-emphasis on and
inadequate stewardship of
plans by creditors and
investors

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Annex 8
Common Internal Barriers to Start-up and Survival
EFFECTIVE POLICIES FOR SMALL BUSINESS - © OECD 2004
103
MOTIVATION
- Personal  fear of failure
- Unwillingness to risk
personal assets
- Lack of contacts/friends in
the business
- Absence of family
experience in business
- Lack of family support
- Low personal
achievement orientation
- Low desire for autonomy
IDEAS/MARKETS
- Ignorance of what makes a
sound business idea
- Inability to scan the
environment for ideas
- Low orientation to
customers and their needs
- Lack of awareness of
sources of business
opportunities
- Poor understanding of
marketing and selling
- No concept of appropriate
market research
- Low resources for
marketing
RESOURCES
- Lack of personal savings
- Lack of acceptable
collateral for formal sector
loans
- Lack of appropriate
premises
- Lack of resources for
reaching the market
- Unwillingness to risk
personal assets to acquire
resources
- Lack of friends,
acquaintances and family
willing to finance the
business or guarantee it
ADMINISTRATION AND
ORGANISATION
- Inadequate record and
book-keeping systems
- Inadequate invoicing,
credit and debtor control
systems 
- Inadequate methods of
monitoring of cash flow,
costs and profit
- Inadequate formal and
informal communication
systems
- Inadequate control
systems to monitor
utilisation, efficiency,
quality and wastage
- Inadequate personnel
records
- Inadequate arrangements
with partners and
shareholders
PLANS
- Inability to produce the
kind of plans demanded
by banks and other
stakeholders
- Inability to negotiate on
the basis of the plan to
achieve flexibility
- Failure to adjust plans in
relation to what is learned
from the market
- Failure to renegotiate
arrangements with
creditors, partners and
investors on the basis of
changed circumstances
- Failure to think
strategically from the start
(‘what if this or that
happens’)
- Failure to focus on critical
issues like cash and
breakeven points

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Annex 9