Abstract:
Small businesses play an important role in the development of an economy and are
identified as the backbone or the engine of an economy as it contributes to the
economic development by providing new employment opportunities, promoting
innovations, reducing regional divergence and many more ways. Although small
businesses play a crucial role, the failure rate of small businesses is comparatively
high in Sri Lanka. Therefore, this study aims to identify the obstacles for the growth
of small businesses in the Colombo district, Sri Lanka. The scope of this research is
the small businesses in Sri Lanka and the finding of this research will confine to the
small businesses particularly in Colombo District, Sri Lanka and may partially
applicable to small businesses all around the globe. Data were collected through a self-administrated questionnaire which was built based on literature. A sample of 375
small businesses was drawn from the registered small businesses in the Colombo
District. Under this study, four main factors that act as obstacles for the growth of
small businesses were tested among the many obstacles that a business might face in
its operations. The findings indicate that there is a negative relationship between the
independent variables; lack of finance, market challenges, regulatory issues, lack of
infrastructure and the dependent variable; small business growth. This implies that
these factors act as barriers for growth of small businesses in Colombo District, Sri
Lanka.
