Critical Success Factors for SMEs: An Empirical Study in the UK Chemical Distribution Industry

Abstract

<p>The UK chemical distribution industry, which is a well-established, fragmented, subject to strong consolidation, significant part of the chemical industry and a major contributor to the UK economy and employment, remains largely unexplored, with no research in the factors contributing to SMEs success. This is the first study to identify the factors critical to small business success and provide an integrative perspective in the specific industry. The research is based on the opinions of owners and very senior managers (Managing Directors, Directors, CEOs and CFOs), an approach extensively used by other researchers. A total of 180 SMEs fulfilling the criteria of this study are identified with 118 owners/managers participating, generating a very satisfactory response rate of 65.5%. Regulatory Compliance, Entrepreneurial Orientation, Customer Relations Management, Market and Product development, Prior Work Experience and Management Skills, Human Capital, Economic Environment and Strategic Planning are established as critical success factors (CSFs). Findings suggest that success is a multidimensional phenomenon where both firm-internal and firm-external factors need to be optimal simultaneously; satisfying one or two factors does not necessarily guarantee success. Strong interrelationships are also revealed amongst the critical and non-critical success factors. The paper contributes towards the integration of SMEs success factors theories and provides guidelines to various stakeholders and policy-makers to improve strategy formulation and decision-making process in supporting chemical distribution SMEs.</p>