The purpose of this study was to identify the factors affecting the business success in small and medium sized
enterprises in Thailand. A major implication for the findings is that these findings will able to give better
understanding for entrepreneurs and business owners in addressing the factors which will significantly affect the
business success in SME. The study of the factors affecting business success of SMEs is critical in understanding
the business continuity and growth hence help supporting economics development within a country. The results
of this study can also be used as reference for anyone who is interested to start their own business which will
provide insights into decision making in staring a business and also for any companies which are interested to
continue to sustain and grow.
To achieve business success, many factors should be optimal simultaneously, since SMEs success is a
multidimensional phenomenon. Both firm-internal and firm-external factors affect firm success. Entrepreneurs in
successful SMEs and those in failed SMEs thought that pretty much the same factors are the most important for
business success, and held the same views on the factors to be avoided in business. The research has looked into
characteristic of SMEs, management and know-how, products and services, customer and market, the way of
doing business and cooperation, resources and finance, strategy, and external environment.
The results show that customer and market, and resources and finance played an important role in ensuring the
SMEs business success in Thailand. Innovative product, quality, cost, reliability, and services are the key
strategic dimension in business success. Innovative product gives added value to the customer and it is important
to achieve a suitable balance between product quality and costs. Small-business owners must have a missionary
zeal about their products or services, be willing to be personally involved in it, be willing to stick with the
business, be able to define the market clearly and pay attention to details and proactiveness. Beside that,
companies must compete based on their strength and specialization which is classified as cost leadership,
differentiation, and focused Michael Porter (1985). Cost leadership-based companies have tight controls on their
operational costs, have efficient production, are volume producers or focused on tonnage. Differentiation
described companies which offer differences in their product or services. They tend to put brands as a market
capture, have high service levels, unique distribution and non-standard terms of business. Lastly, focused
companies are companies concentrating on a particular buyer, group, geographic area or segment of the product
line, continual improvement in quality, cost, delivery lead time, customer service and flexibility are part of the
package to become world class. Innovators with continuous growth should pay special attention to their research
and development, and the ability to maintain their innovativeness.
External environment factor play a very important role as well for firm success. Social network, government
support, and legality, are the key strategic dimension in external environment in business success. Networks
represent a means for entrepreneurs to reduce risks and transaction costs and also to improve access to business
ideas, knowledge and capital. A social network consists of a series of formal and informal ties between the
central actor and other actors in a circle of acquaintances and represents channels through which entrepreneurs
get access to the necessary resources for business start-up, growth and success (Kristiansen, 2003). In developing
areas, satisfactory government support has been shown to be important for small firm success (Yusuf 1995). In
many cases, dealing with legal aspects has forced the SMEs to allocate significant amount of financial resources
due to bribery practices. Legal aspect is often also used in selection operating decision in order to ensure future
business success (Mazzarol & Choo, 2003).
Business success is usually the outcome of the way of doing business and cooperation. Inter-firm cooperation,
consultation, performance measurement, and flexibility may play an important role in business success.
Inter-firm cooperation contributes positively to gaining organizational legitimacy and to developing a desirable
marketplace reputation. Cooperation also may enable the small firm to improve its strategic position, focus on its
core business, enter international markets, reduce transaction costs, learn new skills, and cope positively with
rapid technological changes. Successful firms were likely to spend more time communicating with partners,
customers, suppliers, employees. Use of outside professionals and advisors, and the advice and information
provided by customers and suppliers is also important for business success. Networking seems to be important
both between and within firms. The proportion of SMEs led by an entrepreneurial team was high among
successful SMEs and low among failed SMEs, so fostering the formation of entrepreneurial teams in starting up
businesses is recommended