It’s not easy for them to obtain a loan from the Banks like large enterprises since they don’t have enough collateral security to use when applying for a loan.
They easily collapse as soon as the owners die since the life depends on the owner of the business.
Face shortage of skilled manpower to manage the business. In most cases family labour is used which lack required skills and there is no money to employ expertise.
They frequently suffer from customers changing tastes and preferences and this impacts negatively on small and medium enterprises.
They have shortage of facilities especially for perishable goods due to poor technology.
They produce low quality products leading to limited market
They don’t compete favourable with big enterprises. Due to the fact that small and medium enterprises do not enjoy economies of scale, they are easily out competed
