The countrys start-ups confront various types of structural, managerial, financial, infrastructural,

marketing, and social problems. The extent of the problems faced by SMEs differs according to their
size, location, and market linkage. Some of the problems such as financial, infrastructural, and
political unrest are considered to be acute as they have a substantial impact on business activity and
hinder their competitively. The difficulties are illustrated below-

Lack of Sufficient Financial Support: Small entrepreneurs require various types of financial
support to cover their expenses, such as initial capital to cover preliminary expenses, working
capital to cover running expenses, reserve capital to meet expenses not only for unexpected
contingencies but also for personal and family maintenance. In most cases, these enterprises receive
working capital from the financial institutions, but startup capital, which is crucial to cover
preliminary expenses, is often not supported by financial institutions.
Poor legal and regulatory framework: Although various policies in support of SMEs are currently in
operation, there is a problem of ambiguity, non-transparency, and inconsistency in these policies,
which ultimately reduces entrepreneurs confidence in the legal and regulatory framework of the
country.
Poor infrastructure: Poor physical infrastructure increases the cost of production and reduces the
competitiveness of SME products. Major problems related to infrastructure include frequent power
failures and poor transport facilities, which seriously hamper the smooth production and delivery of
products. Small enterprises suffer more from frequent power failures because of lesser captive power
generation facilities in their production units
Lack of skilled workers: In order to enhance productivity and manufacture high end products,
entrepreneurs often demand an adequate supply of skilled workers. An upgrade of technologies,
important for manufacturing better products, always requires skilled workers. Huge public
investment is necessary to develop human resources
Political unrest: Political structures remain confrontational in the country. Personal and political
enmity between rivals, frequent hartal (strikes), and the lack of respect for elementary principles of
democratic governance has become the principal characteristics of the countrys political system. A
series of prolonged hartal affect the socio-economic and political conditions of the country. The
average cost of hartal during the 1990s to the Bangladesh economy was 3-4 percent of GDP (UNDP,
2005).
Absence of a favorable social/cultural environment: The concept of entrepreneurship is not native
to every culture or society. Starting a business requires courage: the courage to assume the risks of
putting money into ideas and the courage to take a leap into an unknown future. Throughout the
world millions of entrepreneurs display such courage. But the fear of failure produced by the highly
volatile socio-politico-economic conditions of Bangladesh has deepened into the minds of potential
entrepreneurs.

Poor quality and standards: Bangladesh has limited capacity to ensure the quality of products and
services to consumers not only in the domestic market but also in international markets. There is no
national quality policy or adequate support system that provides assistance to all enterprises to
understand the principles of quality and to develop quality consciousness in business behavior.
Inefficient marketing practices: Entrepreneurships in Bangladesh, especially the small enterprises,
do not have enough marketing capabilities or networks. An overwhelming majority of small firms do
not have resources to invest in marketing.
Lack of entrepreneurship and management skills: Many owner-managers and entrepreneurs often
lack wider managerial skills, which hinder their long-term success. Strategic planning, medium to
long-term vision, marketing, commitment to quality, knowledge of quality systems, communicating
in foreign languages, cash-flow management, and information technology are a few critical elements
of management required to meet the challenges of the market economy, especially in the global
market environment.
Challenges faced by women entrepreneurs: Women are handicapped in the current centralized
wholesale market set-up controlled by men. Home-based women entrepreneurs suffer from a lack of
access to inputs and services like credit, input supplies, markets and new technology that could
increase their productivity. Women often lack the legal knowledge to protect their industries and
often fall victim to illegal threats or criminal offences.

Despite all the constraints and challenges mentioned in the previous section, there are start-ups
specially SMEs in all sectors that manage to overcome these problems successfully and operate
efficiently. The reasons for their success are manifold: the successful exploration of markets at
the bottom of the pyramid, access to financial support on favorable terms and conditions, the use
of marketing techniques to tap into domestic and international markets, and the extensive
application of modern technology.