Small business

OVERCOMING BARRIERS 
Objective: To define barriers and ways of overcoming them.
The barriers to meeting future objectives will obviously vary with the specific focus of objectives in the
country concerned, the present state of development and the success of previous policies. It is, however,
possible to speculate on the barriers and problems that will be encountered in the light of international
experience. Barriers can be divided in those that are external or internal to the firm or entrepreneur and
can be categorised as:
• Barriers to the development of an enterprise culture;
• Barriers to the start-up and survival process;
• Barriers to the growth of existing businesses. 
An example in the context of the start up and survival process is shown in Annexes 7 and 8.
Key success factors in the business start up process have been organised into six areas:
1) The motivation to start a business;
2) The quality of the idea and the potential of the market;
3) The ability of the individual or group of individuals; 
4) The physical and financial resources required;
5) The administration and organisation required;
6) The formal or informal plan. 
In each of these areas, internal and external barriers to success can be summarised. Governments can
use the framework to identify the key domestic barriers needing policy attention, adding such factors as
are important in the context of their own country’s development, and actions needed to overcome the
barriers. Similar matrices can be constructed for the processes of development of enterprise culture (see
OECD Istanbul Centre website). 
Examples of actions to remove obstacles abound. With regard to external barriers to motivation, a number
of countries have made business failure less punitive, and programmes have been developed to emphasise
entrepreneurs as social role models, with regional and national award ceremonies. Special programmes have
been developed to cushion the cost of moving from a safe job to running a business. To overcome internal
barriers, ‘know who’ networks have been built between entrepreneurs and would-be starters. Motivational
training and programmes to create achievement orientation have been particularly emphasised in Asia.
Internal and external problems of resource acquisition have been removed through interventions in the field
of micro finance, leasing, small firm equity and venture capital schemes, loan guarantees and soft lending. 
EFFECTIVE POLICIES FOR SMALL BUSINESS - © OECD 2004
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Chapter 14.