Table of Contents

/dissertation-proposal Introduction 2
Literature Review 5
Theoretical Background: the Resource-Based theory of competitive advantage 5
The characteristics of entrepreneur and the overall performance of the Small and Medium Enterprises 8
Business characteristics and the performance of the SMEs 11
The availability of the finances and the performance of the SMEs 13
Empirical studies 14
Research Aim 17
Research Questions 18
Research Objectives 18
Justification and Conceptualization 18
Methodology 21
Research philosophy 21
Research Approach 22
Research Design 22
Survey Design and Sampling Technique 23
Research Administration 24
Validity and reliability of the research instruments 24
Ethical Considerations 25
Limitations 26
References 28


Businesses are mainly categorized into either large corporations or small and medium enterprises (SMEs). In most markets, these two categories of businesses tend to compete for the resources available and the market share, with the large corporations occupying the most competitive positions due to their added advantages in forms of resources and strong brand image. According to an illustration by Kiss, Fernhaber and McDougall‐Covin (2017), Small and Medium Sized Enterprises (SME’s), even though are less competitive individually, they are largely associated with economic development where their growth and or survival positively impact employment within the region while building economic growth (Afrifa, 2016). Given that SME’s are many in number within a certain market; they tend to collectively employ a large number of employees compared to those employed by the large corporations. Taking the case of a market that has only five multinational corporations and a thousand small and medium enterprises, a single corporation may employ a thousand employees making it five thousand for all the five corporations in that market. A single SME may employ a hundred employees thus adding up to 100,000 employees considering the total employees in all the 100 SME’s. Such a scenario therefore explains the contribution of the SME’s in to the growth of the labor market and their role in addressing various socioeconomic issues, like unemployment, within the society.


Data from the Office of National Statistics in the UK indicate that SME’s make up the highest percentage of all available businesses in the country and provides employment to most of the population within the region. The fact that they are the majority in the UK market makes them major contributors to the national, regional and the global economic growth. Their contributions in forms of revenue generation, creation of the employments and circulation of funds thus make SMEs part of the crucial economic assets the UK government has at its disposal. However, despite such importance of these types of businesses, studies have indicated that the SMEs undergo massive difficulties during their early stages that hinder their growth from mere SME’s to reputable organizations.
While some fail to achieve growth, others face challenges that lead to their closure due to be external and or internal factors to the organization (Ward & Rhodes, 2014). According to Ward and Rhodes (2014), among the commonly identified challenges that affect the effort by such SME’s to achieve sustainable and gradual growth is the increased market competition from the well-established giants and the new entrants. Such challenges are therefore a threat to the UK economy as any closure of the businesses may affect the economy in different ways For any business organization to acquire competitive advantage within a market it has to develop effective business strategies that are based on the rich market information to ensure production of more satisfactory products and services. Most SME’s lack the resources and the strategic capability to implement such strategies, as most of them require heavy investments in terms of improved production plants, and research & and development initiatives. With that regard, researchers should focus on investigating the external and internal factors that affect the strategic capability y the SMEs to attain sustainable growth and make suggestion on what business owners and managers should do improve their performance within the highly competitive markets. It is not hard for a small business to compete with the large corporations, especially where the business manager is familiar with the best approaches to employ in order to acquire brand equity necessary for its competitiveness. From, it is clear that more studies on the business management and other external factors affecting businesses are necessary.

Most of the existing studies have focused on evaluating the external factors that affect the SME’s, such as financial resource constraints that affect their growth, especially into large organizations. However, such studies pay little attention to the challenges facing SME’s in the labor market, especially based on their efforts to attract and retain talents and the market competition they face from the new entrants and well-established players and how their management contribute to such challenges. With such study gap in the current literature, there is a great need to conduct a research that would bring a better understanding of the SME’s and their business environments as well as the factors that lead to their success or failure, since the existence of these businesses is of much importance for the economy and the society at large. Conducting this study will create insights for the business managers and other players in different markets on how they should run their SME’s to ensure sustainable and stable growth in the future. It will therefore enable most failing businesses adopt the best strategies that will see them achieve sustainable growth in the future thus creating a chance for the UK to have more large corporations than SMEs a move that will result to sustainable economic growth and the transformation of the social status among the affected communities.

Research indicates that creation of jobs is of massive importance for the policy makers and for social development, it is also essential for economic development (Afrifa, 2016). Small businesses also play a huge role towards poverty elimination, improving industrialization among other factors. However, the rate of failure of such businesses brings the need to find solutions through studying on the likely determinants of business success (Lee, 2014). Business failure is contributed to by lack of enough knowledge about these businesses, the risks within the business environment, ability of the leaders to develop strategies that guide business towards growth among other factors (Ward & Rhodes, 2014). Therefore, this paper will aim at looking at both the internal and external business environment factors and how they contribute to growth of the small and medium business. This study seeks to unveil the determinants of SME’s success specifically focusing on the SME’s within Birmingham, UK. It also pays more attention to the recruitments of new talents and how such talents ensure their future business growth.

Literature Review

This chapter explores past literatures that have focused on the factors that impact SME development with the aim of understanding the determinants of their success. The chapter is also focused into identifying the research gaps created by the past research and hence develop research questions that would help meet these gaps. The literature reviewed varies from the journal articles, books, databases and other materials that contain relevant and useful information about the problem of the study.

Background: the Resource-Based theory of competitive advantage
According to Holdford (2018), a theory tends to define a system that works towards providing a particular explanation of phenomena using laws, constructs and generalizations. A theory also organizes knowledge or data gathered from a study and isolates findings from those studies into a framework that explains the phenomena in a clearer way to the readers or the audiences. According to the description by Holdford (2018), the theory of the resource-based is the connection made by an organization between its skills and internal resources and the risks and opportunities established by the external environments. The theory has been widely applied in different business studies since its establishment by Grant, R. M (1980), who considered the principle of developments in a strategic analysis and the link between the external business environments and the strategic capability by an individual organization. Michael Porter’s analysis of the competitive positioning and the industry structure, and the PIMS project’s empirical studies are some of the popular examples of the application of the theory.

Miller (2019) identified a comparative neglect of the connection between the firm’s resources and skills and the strategy in the resource-based theory thus calling for more evaluation to find out its applicability. The theory has been used in a number of studies to determine the strategic implications of the company’s internal business environment on their performance within the market, especially through the analysis of the organizational process of creating effective strategies. According to the study by Roostika (2019), the increasing concern among the researchers on the role plaid by the SMEs’ resources in the creation of the firm’s strategy has influenced the theoretical application in most business studies, especially those related to the factors that lead to the overall success of different types of business. Such change in the theoretical frameworks in most contemporary studies reflects the dissatisfaction among the researchers and scholars on the dominating static, equilibrium framework of the organization economics, which has dominated the business studies over the years. According to Ramon-Jeronimo, Florez-Lopez and Araujo-Pinzon (2019), with the application of the theory of Resource-Based of competitive advantage, different advantages have shown in various areas. As further noted by the authors, at the level of corporate strategy, theoretical interests in the transaction costs and economies of scope are now focusing on the role plaid by corporate resources in determining the geographical and industrial boundaries of the activities undertaken by different business firms. As the level of business strategy, examination of the relationships between the competition, resources and profitability involve a critical analysis of the appropriateness of the returns to innovations, competitive limitations, the role of imperfect information in ensuring the differences in the profitability between various competing firms, and the way through which resources accumulation by an organization lead to its competitive advantage. As per the illustration by Heredia-Calzado and Duréndez (2019), the combination of all these applications of the theory amounts to what they call ‘the resource based view of the firm.’ Borrowing from this particular theory, however, this study will seek to evaluate the relationship between the internal environments of the SMEs and the external factors and how such relationship influence their success within their areas of operation.

According to Donnellan and Rutledge (2019), the resource-based view (RBV) assumes that businesses possess different kinds of resources that enable them to acquire competitive advantage and a better long-term performance within the market. As further noted by the authors, the resources that seem to be rare and more valuable are in a better position of creating competitive advantage than the rest of the resources. When such advantages remain for a long period in an SME, the individual firm is capable of protecting itself for any resources limitations, substitution and transfer that might affect its future operations, especially the attracting and retention of competitive and talented employees. From this theoretical perception Cao, Duan and Tian (2019) believe that the business resources should enable organizations create and employ a value-creating strategy, by reducing its weaknesses and outperforming the direct and indirect competitors. The authors further note that the cost of transactions, especially that connected to the business investments, cannot be allowed to exceed the benefits generated from the value-creation strategies. A resource must however be rare for it to create any value to a particular business. On the other hand Clemons (2019) argue that in a case where a valuable resource is under the control of a single firm or a small number of firms within a particular market, it might lead to competitive advantage to such firms, which can be sustainable in the case where other competitors are unable to reproduce the same resource. Such resources determine why some firms are more competitive over the rest despite operating within the same field or sector. Such theoretical perceptions thus create a clear view on how organizations’ resources determine the strategic competitive advantage within the market and how their unique strategies can be applied in determining the overall success of a firm. The viewpoint therefore creates a study framework for the researcher to follow in this particular study to provide reliable and valid answers to the research questions.

The characteristics of entrepreneur and the overall performance of the Small and Medium Enterprises

Different characteristics of an entrepreneur are believed to play a crucial role in ensuring the overall success of an SME. According to Aladejebi and Oladimeji (2019), such characteristics may be categorized into personal traits, demographic factors, formal education, previous experience, readiness, and entrepreneurial orientation. Some of the demographic characteristics, such as gender, age, and individual background are explained theoretically by Aladejebi and Oladimeji (2019) as factors that have an influence on the manner at which individual entrepreneurs make decisions and their success in ensuring that those decisions are implement to meet the overall business goals. As per further illustration by the authors, younger business managers or owners are motivated more to see their businesses grow and become more competitive within the market. They are therefore goal-oriented and are risk takers compared to the older managers or owners.

Different studies have been conducted to determine the correlation between the variable of age of entrepreneur and the success of their business. In a study conducted by Sinha (1996), on the entrepreneurships in India, it was noted that most of the successful entrepreneurs within the area of the study were young. These findings affirmed the findings in another study by Kristiansen, Furuholt and Wahid (2003), which indicated a significant correlation between the business success and the age of the entrepreneur in charge of running that particular business. Such study findings thus clearly indicates the need to look into the age of the entrepreneurs while evaluating the factors that influence the success of the SMEs in any market across the world.

Besides age of the entrepreneur, Robichaud, Cachon and Mcgraw (2018) illustrated the correlations between the gender and the success of the businesses. In their findings, the authors realized that women normally face more challenges while trying to start entrepreneurships and running them. According to their illustration, among the common challenges include difficulties acquiring starting capitals, lack of capabilities to market their businesses and to manage their finances well. As further noted by the authors, the main cause of the limited financial access among women entrepreneurs was attributed to the management approaches they adopt at the early stages of the businesses. Most female entrepreneurs prefer internal sources of funds instead of external sources as they are not naturally good risk-takers so acquiring loans become a major challenge to them when the future of the business is uncertain. As noted in a report released by Schipani (2018), women are more likely to use their personal saving to fund their business ventures while men will go for any financial loans to facilitate their newly established businesses. Such differences thus explain why most women fail in their efforts to start business compared to men. Schipani (2018) emphasizes on the importance of entrepreneurs to create a healthy relationship with the bank as such relationship facilitate the sustainable growth of the business in the future. In that case, the author notes that given that women are normally hesitant in approaching banks during the early stages of their business set-ups they limit their chances of accessing financial support from different financial institutions in the future thus slowing the growth of their businesses compared to the case with male entrepreneur.

Some studies have attempted to relate business success and failure to the personal traits of the entrepreneurs. According to Nooteboom (1994), one of the most essential characteristic of any SME is the diversity of its scope. Any possible source of the business diversity is therefore believed to lie in the variance of the motives, backgrounds and the goals shared by the entrepreneurs. According to an illustration by Yusuf (1995), personal traits and qualities, such as the perseverance and self-confidence, normally affect the overall success of a business, especially the SMEs, which are run by a single owner or a few of individuals. Duchesneau and Gartner (1990) conducted a study on the key personal qualities that define a successful entrepreneur. In their findings, the authors noted that most of the leading entrepreneurs in business success were more likely to have been born into a business-oriented family, with their parents being successful business people. The authors further noted that it is through the experiences and skills these individuals gained right from the beginning when they were growing up that they adopt qualities and traits that made them successful entrepreneurs. The authors further realized that those successful entrepreneurs shared the qualities of hard work, good communication skills and were more goal-oriented. Such personality traits and qualities thus mark the best determinants of the successful entrepreneurships. In a study by MacGregor (2004), the great ideas shared among the entrepreneurs and the business goals set at the beginning of a business determine a lot how that business will perform within the market. Greve and Salaff (2003) argue that the education levels of the business owners define their capability of networking while developing their entrepreneurships. As further noted by the researchers those owners with high education are more likely to form more and successful networks, which are essential in the overall success of a business than those with less education background.

The recent studies have agreed with the fact the owners or managers of the SMEs who have experiences in the business management tend to achieve more steady and sustainable growth for their businesses. According to MacGregor (2004), most SME owners in the UK who have little experience during the startup phase of the business are more likely to face more challenges running those businesses as they face varying challenges, starting from the financial management to the allocation of the resources. MacGregor (2004) further indicates that entrepreneurial orientation and readiness of the individual entrepreneurs play a crucial role in ensuring their overall success in their business ventures, especially the startups. Lumpkin and Dess (2001) argue that the concept of entrepreneurial orientation consist of a total of five dimensions, including risk taking, autonomy, innovativeness, competitive aggressiveness and pro-activeness. The authors thus defined autonomy as an action that is considered to be independent by an individual to bring forth a business vision or concept, and ensuring that that vision is completely achieved. On the other hand, Lumpkin and Dess (2001), define innovativeness as the willingness to support experimentation and creativity. Risk taking is considered as a tendency by a business owners or managers to take bold steps to ensure that their businesses are going to the right direction. Proactiveness is a forward-looking or a process of seeking opportunities while aggressiveness reflects to the intensity of the efforts by a business to gain more competitive advantage over the rivals within the industry of operation.

Business characteristics and the performance of the SMEs

A number of studies have highlighted a number of SME characteristics that influence their performance or improvement within different sectors of operations, which include the size of the business, the age of the firm, the capital course and the legal status and the form of the business. According to Storey (1994), the age of an organization is an integral factor that influences how that particular firm is likely to grow in the future. According to the author, the length of lite the business has been operating may be associated with the experience gained by the business owner or manager on a number of challenges and the best way to go through those challenges. As further noted by author most older players in different sectors have acquired enough experiences than their new counterpart, which is a key towards their business success. The size of the SME, according to McMahon (2001), determine the employment terms within the firm and its performance in terms of productivity and the size of the market share it controls. The author further notes that compared to the small enterprises, large firms are found to be more successful in almost every business sector. Westhead (1995), in a study on the high technology firms in the UK, found out that larger firms have more propensities for stable growth compared to small firms.

Other studies have highlighted the relationship between the legal form or the form of business and the overall success of a firm. According to Harhoff et al. (1998) in a firm that has the owner or the manager who enjoys limited liability, it stands a better place of pursuing risky projects, which are normally associated with higher returns and drastic business growth. Harhoff et al. (1998), in a study of German firms realized that those firms with limited liability happen to enjoy an above average growth rate thus standing a better chance of competing with other large corporations for the market share. Freedman and Godwin (1994), in a different study of the SMEs in the UK found out that the limited liability is the prime benefit of the corporate status. Other studies on the same issue have also provided similar findings whereby it is noted that the form of business determine its overall success, especially when it comes to market competitive advantages and the workforce productivity. In the Doing Business Report released by the World Bank in 2013, it was noted that simple business regulatory reforms tend to impact a business positively in relation to job creation. Even though most of the SMEs across the globe, especially in the developing world operate informally, they create the highest number of employments than the formal corporations.

The availability of the finances and the performance of the SMEs

Fisher (2018) defines finance as the activities involved in the management of the cash flows within a business organization. As further noted by the author, it is always advisable for the companies operating in different sectors to choose the most appropriate organizational culture that will enable them to make the best use of the finances they possess, while balancing the needs of different stakeholders, including the customers and the employees and the demands by the investors. Ledgerwood and Victoria (2006) identify five distinctive functions which are involved in finances, including selection of the best projects to invest the capital in, raising enough capital to support the business operations, managing the internal cash flaws and its equity financing and mix of debts, managing the company’s risks and developing corporate governances structure effective in decision-making and implementation. As per the argument by Ledgerwood and Victoria (2006) businesses tend to raise money from two different sources, either internally by retaining operation cash flows or externally from creditors and investors. As per the findings in Ledgerwood and Victoria’s (2006) study, most of the small and medium businesses raise their funds internally and on annual basis. However, the level a business access external funds may influence the overall success of its operations. In most cases, SMEs, such as sole proprietorship and partnership, tend to face challenges accessing external funds as they fail to meet the security and standards required by the investors and creditors. This therefore makes them less competitive within the market compared to the large corporations with sufficient access to the external funds. Financial capability of a particular business determines a lot how that organization sets its goals and how it achieves those goals.

As per the illustration in a number of past studies, the finance function of a business firm encompasses every bit of the enterprise’s financial resources and the management of the firm. It involves practices, such as planning the firm’s way of doing things, forecasting and budgeting, treasury and cash management, ensuring that there is available cash when it is needed for investments, account receivable and payable, tax planning, ensuring that the firm pays its debts and what it is owes is paid on time, risk management, compliance, avoidance of any surprise expenditures among others (Hiferding, 2019). As per the argument by Hiferding (2019), such finance functions can be achieved through effective and reliable leadership. The author believes that the ability by the firm’s management to access, process and apply finance information enables them to make informed and sound investment decisions, thus minimizing chances of making losses that might result to the business failure. Business strategies also depend on the leadership. In that case, as part of the internal factors that influence the success of SMEs, leadership is a crucial variable that needs to be studied in a comprehensive way to improve the chances of the SMEs to succeed in different industries.

Empirical studies

SME’s are defined in many ways where some definitions focus on asset accumulation, number of employees that an organization has, annual revenue generated among other factors. Notably, an SME in the UK is any business that has less than 250 employees (Lee, 2014). Most researches on SME’s success focus on various factors which include the managers and or leader’s effectiveness and or characteristics, the business strategies, the external environment and the various characteristics that define the SME (Chittithaworn et al., 2011). While this is the case, it is noted that factors such as effective communication, ability to plan, quality of services that businesses deliver, planning, competition within the industry, and economic conditions among other factors help in shaping growth of the business. Traditionally, business success is looked into in terms of financial growth, capital accumulation, organizations competitiveness among other factors (Philip, 2011). Success is also looked into in terms of the ability of the business to provide a return on the investment, to build a brand or a reputation, among other factors.

Most empirical studies, consider SME’s as the backbone of any economy due to the economic benefits that these organizations provide especially in growth of the GDP, providing new innovations and trade stimulation. The study by Philip (2011) indicates that for businesses to experience growth there is need to have competitive strategies while putting efforts in all areas that are likely to impact on their success. The current business environment for example is highly characterized by competition as providers try to outdo each other. Considering the power of the large businesses SME’s are left vulnerable which therefore makes them unstable and unable to grow. According to the study by Eze, Olatunji, Chinedu-Eze and Bello (2018), businesses in the current environment have to develop strategies that not only focus on business survival but also on development despite the changing environment that is highly competitive as competitors try to outdo each other. The study further notes that business competition also largely changes as the needs of the consumers’ change, as their expectations rise, as new technologies are developed among other factors.

Further research indicates that financial stability plays a huge role for a business to achieve profitability. However, as per the indication by Chittithaworn et al. (2011), SME’s are characterized by low resources and challenges while accessing funding to support business continuity, the small businesses also do not enjoy the economies of scale. It is further noted that finance helps in implying an organizational health. Notably, organizational growth is characterized by rising number of employees, development of new products and or services while these factors are enabled through access to finance. Research further indicates that access to information is a major factor that determines business development as it forms basis for decision making (Chittithaworn et al., 2011). Information helps in development of new knowledge, understanding of consumer behaviors and chances within the organization and hence making effective decisions to meet these changes (Jasra et la., 2011). Considering the limited resources of the SME’s and their lack of experience, access to information becomes a challenge while it is noted to be a huge determinant to growth as information is essential for decision making. In that case, as noted in a number of studies, for the SMEs to succeed in the current business environments they must have sufficient access to resources and strategic capabilities to introduce policies and strategies that are competitive enough to ensure the future sustainability.

Further research indicates that lack of enough resources hinders business development, resources in this case not only refers to the financial power of the business but also technologies and other equipment’s that the business holds (Love, Roper & Zhou, 2016). The ability of the small and medium businesses to have competitive and efficient technology is also noted to determine its development. Technology is essential in delivering of competitive services and or products which would therefore allow small businesses to offer competition to the already existing businesses (Afrifa, 2016). Research also notes that government support through development of effective policies that protect the small businesses from unfair competition, setting of fair taxation policies and provision of an effective economic environment for growth is essential for the small businesses (Love, Roper & Zhou, 2016).

Apart from the external factors, research further notes that growth of any business also relies on the leadership capabilities of the management in the small businesses (Jasra et la., 2011). Therefore, the ability of the small businesses to have superior management that studies the business environment hence developing strategic plans that guide business development is essential. Effective management also helps in understanding business uncertainties, the factors that hinder development, changes within the business environment and hence creating plans to overcome these limitations (Eze et al, 2018). Further, effective management that focuses on worker’s development and creation of an effective environment for work is essential ensuring development of the small businesses (Jasra et la., 2011).

Also, an organization’s marketing ability and consumer engagement determines its ability to succeed. Feindt, Jeffcoate and Chappell (2002) note that for the SMEs, the value and quality of services they give to their consumers helps determine or develop consumer satisfaction which therefore leads to formation of brand competitiveness. As further noted by the authors, effective marketing abilities of the organization also help in attracting more consumers to the business. Marketing should be focused on consumer engagement to ensure that they feel satisfied with the services being offered and to improve word of mouth advertisement. Further research indicates that industry development for the SME’s is also another factor that influenced their growth (Jasra et la., 2011). According to Feindt, Jeffcoate and Chappell (2002), industry development impacts all businesses within the industry and therefore for organizations that can be able to set good policies and strategic plans to take advantage of this development, the business automatically experiences success as they can be able to attract business.

Research Aim

Considering the role that SME’s plays in creation of employment opportunities, economic development as well as social development, it is essential to understand the factors that contribute to success of such businesses. This research therefore seeks to understand the determinants of business success with the aim of guiding businesses towards competitiveness. It starts by looking into the internal factors of the SME’s such as owner competence among other factors and how they impact business, the chapter continues to look into literature that focuses on external business factors and how they impact business development.

Research Questions
 How does the internal capabilities of the business such as entrepreneurial leadership impact on SME’s success?
 How does the external business environment which with which the SME’s operate impact ability to achieve success?
 How does industry development impact growth of the SME’s?
Research Objectives
 To explore the internal business capabilities for example leadership and how they impact SME’s success.
 To determine effect of the external business environment SME’s success
 To examine the impact of industry development of SME’s growth

Justification and Conceptualization

This study will seek to look into various factors such as the external and internal factors to the business and how they affect the success of individual SMEs (Love, Roper & Zhou, 2016). Given that such factors influence the overall success of the businesses, identifying them and determining how and where they impact the businesses is essential as it creates insights to the business owners and managers on the best strategies to adopt to achieve success. Further, it is important to note that to achieve business success, it is essential for the economy to be welcoming to new business, through enhancing of wealth creation while at the same time creating employment. Considering these factors, success of SME’s is essential as it is determined that they provide about 60% of the total employment in UK (Philip, 2011). Therefore, they largely contribute towards economic growth while proving millions of the job seekers with employment. Conducting this study is therefore necessary as it will propose various ways through which different stakeholders, including the government agencies, financial institutions and the business owners, can coordinate to ensure the success of the SMEs thus improving their contributions to the social and economic growth of the UK society and other parts of the world.

Further, it is indicated that SME’s comprise of about 99% of the entire business population in UK. In the beginning of the year 2019, it was reported that there were about 5.82 million small businesses in the UK. Within the Birmingham city, the office of National Statistics indicates that there are over 22,000 SME’s which is showing an upward trend. Further, despite the increasing trend in development of new businesses and SMEs within the region it is important to note that not all SME’s grow to big businesses or even make it to more years (Love, Roper & Zhou, 2016). Most of them succumb to the external pressures, such as lack of access to sufficient funds from the creditors and investors, increased competition from the giant brands and poor leadership among others. Therefore, for increased success of the small businesses within this region while considering the high number of these businesses, it is essential to study the factors that contribute to their success. The research will, therefore, act as a guidance that will help the SMEs in this region determine the risk factors that contribute to movement of the business from small to medium to large enterprises (Ward & Rhodes, 2014). With the findings on such variables, the study will create insight into the best strategies for the business owners and managers to adopt to ensure gradual and sustainable growth of their businesses as they move SMEs to large corporations.

It is also essential that the SME sector remains competitive so that they continue to provide employment to more people and to deliver the required goods and services to the people. Also, the various limitations facing small businesses within Birmingham UK needs to be addressed which can be done through conducting market research in this area. This will ensure that SME’s remain economically relevant while allowing them to provide employment to more people (Love, Roper & Zhou, 2016). By exploring the success determinants, the research will help small businesses within Birmingham UK to have advantage of these factors and set measures that can lead to business success. This research will therefore help in provision of information that will be necessary for improving the competitiveness of this sector where it will be able to meet the expectations of the country. The research will also enable users to acquire current information on the success determinants of SME’s which will guide them in making decisions that promote success of these small businesses (Ward & Rhodes, 2014).

Research has indicated that most of the collapsing SME’s within the UK collapse within the first year of operation while others take longer (Feindt, Jeffcoate & Chappell, 2002). In this case, for research to provide necessary information that can be useful for providing a basis for entrepreneurs to make decisions. Considering the increasing pressure to create an environment that helps enhance business growth, this research will allow businesses to understand the relation between the business and its environment and how this impacts on its growth (Philip, 2011). The study will also help explore literature in this area which will help users better understand the concept being studied. Further, most current studies focusing on enhancing business success dwell on the ability of already established businesses to remain competitive. In this light, it is essential to conduct a study that focuses on determining the factors that contribute to business success in Birmingham and therefore explaining the need for this research.


This section proposes research method that the researcher will apply in the research process and or in data collection. It outlines the plan that the researcher will follow in conducting the research and or the road map (Bell, Bryman & Harley, 2018). The data collection procedures and or instruments are discussed and explanation of how data will be extracted from the sources and analyzed to determine the correlation between the main variables. It gives the approach and or philosophy employed by the researcher, the research design used and the sample population, ethical considerations and limitations of the research.

Research philosophy

A research philosophy is defined as a belief in which reliable data regarding a certain phenomenon should be collected. It is thorough the research philosophy that the researcher is able to identify the right pathway to achieve the research objective as it clearly shows the plan that is likely to work in ensuring proper research process, starting from the data collection, analysis to the presentation. The commonly used philosophies in business and sociology studies are positivism and interpretivism. Interpretivism assumes that only through the interpretation of reality and its intervention through subjectively that there is a possibility of that reality to be fully understood (O’Gorman & MacIntosh, 2016). In the case where the phenomena are studies at their natural states, this philosophy is the best to employ. On the other hand, positivism assumes that reality is stable and can be described and observed from an objective point of view without any form of interferences with the phenomena (O’Gorman & MacIntosh, 2016). In this particular study, the researcher uses a positivism approach, which allows an objective evaluation of the SMEs in Birmingham, UK and the factors that affect their success without changing the current situation on the ground. It therefore allows analysis of the past studies to determine the suggestions given by other scholars on the best solutions towards the challenges most SMEs face, which affect their growth and the best solutions to address those challenges.

Research Approach

This research applies both the quantitative and qualitative research approaches which allow the researcher to collect statistical data that will be used to provide logical conclusions while at the same time using the views and various ideas of different players within the area of study to understand better the concept under investigation (Bell, Bryman & Harley, 2018). The data collected in the study is therefore secondary as the approach follows a secondary research where researcher uses past empirical literature which serves as a research foundation and helps in development of research objectives and or variables that the study aims to find solutions to the problem being studied. Secondary data is used to help understand the results better through comparison (Hair Jr, Page & Brunsveld, 2019). Reviewing both qualitative and the quantitative researches are essential as it helps in compensating the limitations of each method hence helping the researcher to achieve a superior research (Bell, Bryman & Harley, 2018). This method also allows one to dig deeper into the concept under study leading to a better understanding. Another significant benefit of following this study approach is that it provides a wider variety of information regarding the study problems, as different past studies used different approaches to arrive to varying findings.

Research Design

The research designs tend to explain the research strategy that the researcher has selected for the study. It allows the researcher to complete and conduct the research in a coherent manner hence finding solutions to the problem being studied (Bell, Bryman & Harley, 2018). It forms the blue print for collecting and analyzing of data for ease in making conclusions. For this research, the researcher intends to use the descriptive research design. This design allows the researcher to collect data that guides in identification of characteristics and or research trends. It helps in defining the facts of the population under study through accurate and systematic data representation (Hair Jr, Page & Brunsveld, 2019). The design helps in observation and or description of the behavior of the population being studied without influencing the population. With this regard, it will help in identifying some of the character traits and behaviors of the business owners in the area of study thus determining how such factors influence the success of their business without necessary influencing the population in the region. The design is essential as it will help the researcher in observing and or studying various SME’s within their normal environment (Hair Jr, Page & Brunsveld, 2019). However, despite the advantages of the descriptive research design it has a number of drawbacks, which might affect its applicability in this particular study. For instance, the design lacks the ability to vary and test the research problem statistically, and the results from a descriptive may reflect certain levels of bias, which are major setbacks in a study like this.

Survey Design and Sampling Technique

To collect data, the researcher will utilize the online survey method as the research aims at taking advantage of technological growth and advancements to conduct the research. The survey will involve testing a number of online published articles to determine the best criteria to apply in selecting the materials to be used in the study. A total of three articles will be reviewed as part of the pilot study, while evaluating some of the challenges that the researcher might face while conducting the main study. The study also seeks to apply convenience sampling technique. The sampling method collects data from the most convenient population and materials in this case. The easily available materials will be utilized for the research with the aim of enhancing convenience while making it easy for the researcher during the data collection process (Bell, Bryman & Harley, 2018). Such materials will be derived from the easily available and most relevant sources, including journals, databases and the business websites.

Research Administration

The researcher will only use secondary materials to collect data regarding the research question. Secondary studies are normally effective when there is no enough time to administer questionnaires or interview. The aim of using this strategy is because the cost of conducting secondary studies is less while it also helps improve convenience as the researcher can answer the questions based on the materials they find better fit for such specific research questions. The study will focus on both qualitative and quantitative past studies to collect both non-numerical and numerical data relevant to the problems of the study. This will be important for data analysis and discussion as the wide range of the data will enable the researcher identify the best correlations between the variables, which answer the research question in the most appropriate ways possible. The collection of the secondary materials will follow certain criteria: those published in the 21 century, topic in SMEs management and financial performance, influence of the external and external factors in shaping the development and growth of the individual SMEs and peer reviewed articles or books (Hair Jr, Page & Brunsveld, 2019). Such criteria will help the research save time searching for the materials to answer the research questions. It will also minimize chances of using irrelevant and biased data in conducting the study. The study commences after the approval of the research proposal and adherence to the ethical standards and study norms.

Validity and reliability of the research instruments

The need to conduct a test on the constructs and the content of a study instrument is inevitable in any research. It serves to test whether the findings of the study are relevant to the research problem. Biasutti and Frate (2017) emphasize that research experts should be able to identify the reliability and the valid of the tools and methods used in collecting and analyzing the data they use in answering the research questions. Validity is therefore defined as the extent to which a research tool measures what it is intended to measure based on the objectives of the study and the aim of the researcher. In that case, for a study to be valid, the study tools or instruments must be in a position of executing their roles by collecting the right data that measures the correlations between the variables in the best ways possible. In this particular study, the researcher presented the research tools to the instructor and the fellow studies to seek their opinions on the validity of the tools. The responses from the third parties however approved the use of the tools as they believed that they will facilitate collection of valid and reliable data and answer the research questions in the best ways possible.

When it comes to reliability, a high score in the reliability of the research instruments is needed for the study to be successful. Reliability is therefore considered the measure of the degree to which a tool used in study produces consistent data or results after a number of trials Biasutti and Frate (2017). The reliability is believed to have two major aspects, including external and internal reliability. The internal reliability is considered as the overall ability by the research tools to measure a single idea and determine whether that idea is internally consistent. The external reliability is the consistency of the measure over a certain spurn of time. A pilot study was conducted to measure the reliability of the study instruments in this particular study. A number of articles were analyzed to determine whether they contained the necessary information to answer the research questions. Such test gave the researcher a clear picture of what is supposed to be done in the actual study.

Ethical Considerations

Considering that this research will depends on the materials that have already been published by other researchers, it is essential to consider ethical practices in research. In a secondary study, ethical issues related to copyrights may emerge, especially where the materials used are not cited and the researchers are not recognized well. Therefore, to observe the ethical rights of the previous researchers whose materials are used in this particular study, the researcher will ensure that every secondary material used is well cited and that the name of the researcher(s) is/are included in the in-texts citations (Bell, Bryman & Harley, 2018). This way the researcher will prevent any chances of the copyright issues with the individuals whose work will be used for the purpose of completing this particular study. In case of any encounter with the people, such as the library attendance who will provide some assistance through the search of the materials, the researcher will assure them of anonymity to protect their privacy and confidentiality. This will only happen if the individual is not willing to be acknowledged at the end of the research. Lastly, the researcher aims at making sure that the research helps in providing information that will guide and help SME’s in achieving growth. To achieve that, it will be good to follow the university’s standards of the business study, including avoidance of providing incorrect information or publishing biased information about the issues under investigation.


The limitations for this research include time limit. Searching for the best secondary materials to use in the study is time consuming as there are bulks of materials on the topic. Without a proper plan and a strategy to such for those materials the issue of time management might arise, which is a great threat to the success of the overall study. Further, reliability might be a problem considering the fact that some authors may not be willing to allow their work duplicated in a different study. In such a case, the researcher may experience some issues that will affect the reliability of the study findings (Hair Jr, Page & Brunsveld, 2019). The researcher, due to fatigue or lack of proper time management may end up using some materials that are not valid for the study. In such a case, the findings will not be reliable to be applied in addressing the research problem.


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