To design effective solutions, policymakers, researchers, and development organizations must first understand the specific challenges small businesses face. This understanding is best achieved through on-site data collection, which provides real-world insights into the barriers hindering growth and sustainability.

1. The Importance of Understanding Growth Barriers

The success or failure of a small business depends on a range of internal and external factors. While some of these factors are easily observable—such as capital shortages or limited equipment—others are deeply rooted in local contexts and require closer investigation. Understanding these barriers is essential not only for the entrepreneurs themselves but also for governments and support agencies seeking to build a thriving business environment.

Without accurate data from the field, policies and programs risk being based on assumptions rather than evidence. For example, a government may believe that small enterprises primarily need financial support, when in reality, entrepreneurs may be more constrained by poor market access or bureaucratic red tape. On-site data collection bridges this gap between perception and reality, allowing decision-makers to design targeted, effective, and context-specific interventions.

2. What On-Site Data Collection Reveals

On-site data collection—through surveys, interviews, focus groups, and direct observation—offers a deeper look into the day-to-day realities of small business operations. Researchers who visit enterprises in person can observe how owners manage production, interact with customers, and cope with logistical challenges. This ground-level perspective helps identify hidden or underestimated barriers that traditional desk research often overlooks.

For instance:

• Financial barriers: Entrepreneurs might have difficulty obtaining loans not just because of high interest rates, but also due to complex application processes or lack of collateral.
• Infrastructure barriers: Businesses in rural areas may face transportation issues that limit market access or prevent timely delivery of goods.
• Skill-related barriers: Owners might lack basic accounting or marketing knowledge, affecting their ability to plan strategically.
• Regulatory barriers: Complicated licensing systems or inconsistent local regulations can discourage formalization and limit growth.

Collecting data on-site makes it possible to document these issues accurately and understand their interconnections.

3. The Role of Qualitative and Quantitative Methods

Effective on-site research often combines quantitative and qualitative approaches. Quantitative surveys help measure the prevalence of challenges—such as how many businesses face credit access issues—while qualitative interviews reveal the why behind these patterns.

For example, a quantitative survey might show that 60% of small business owners have been denied a bank loan. However, qualitative interviews could uncover that the denial stems from informal recordkeeping, lack of financial literacy, or fear of formal institutions. Together, these methods create a more complete and actionable understanding of the obstacles to small business growth.

Furthermore, participatory research techniques, where entrepreneurs actively contribute to identifying problems and solutions, build trust and ensure that findings truly reflect local realities. This approach empowers small business owners and ensures that data collection is not just extractive but collaborative.

4. Turning Field Insights into Action

The ultimate goal of on-site data collection is to transform insights into meaningful action. Once the barriers are identified and analyzed, policymakers and support organizations can design targeted interventions. Examples include:

• Financial inclusion programs: Simplifying loan procedures, offering microcredit, or providing loan guarantees for small businesses.
• Capacity-building initiatives: Training programs on digital marketing, inventory management, and bookkeeping.
• Infrastructure improvements: Investing in transportation, electricity, and internet access to connect small businesses with broader markets.
• Regulatory reforms: Streamlining business registration processes and reducing administrative burdens.

These actions, when grounded in field evidence, tend to be far more effective and sustainable than top-down measures based solely on theory or general economic models.

5. The Value of Continuous Field Research

Identifying barriers to small business growth is not a one-time exercise. Markets evolve, technologies change, and entrepreneurs face new challenges over time. Continuous on-site data collection enables stakeholders to track trends, monitor progress, and adapt policies accordingly.

For instance, during the COVID-19 pandemic, many small enterprises faced disruptions in supply chains and a sudden need for digital transformation. Regular field research allowed development agencies to respond quickly, offering e-commerce training and digital payment solutions that addressed emerging needs.

By maintaining ongoing contact with business communities, researchers and policymakers can ensure that support programs remain relevant, responsive, and resilient.

6. Case Example: Localized Data for Real Solutions

A practical illustration of the power of on-site data collection can be found in a small manufacturing region where businesses struggled to expand production. Initial reports suggested that lack of finance was the main issue. However, field researchers visiting the area discovered a more complex picture: unreliable electricity supply, shortage of skilled labor, and inefficient local transport networks were the true growth inhibitors.

Based on these findings, local authorities prioritized infrastructure development and vocational training programs rather than focusing solely on microloans. Within two years, productivity increased, and new small enterprises began to emerge—demonstrating the effectiveness of evidence-based, locally grounded strategies.

7. Conclusion

Small businesses face diverse and often intertwined challenges that hinder their growth. Identifying these barriers requires more than statistical analysis—it demands on-site data collection that captures the full context of entrepreneurial life. By engaging directly with business owners, observing operations, and collecting both quantitative and qualitative data, researchers and policymakers can uncover the real obstacles and design strategies that truly address them.

On-site research is not just a data-gathering exercise—it’s a tool for empowerment, understanding, and change. When governments, NGOs, and business associations base their interventions on field evidence, they foster stronger, more resilient small businesses that contribute to inclusive and sustainable economic growth.

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We have created a checklist to help guide you through the early stages of establishing your business. Follow the steps below to help you decide if you are ready to go into business, how to get started and where to seek help along the way.

Determine if you are ready

Going into business for yourself for the first time will change your lifestyle, professionally and personally, and can involve a significant financial commitment.

Whether your business succeeds or fails depends on many things including your abilities, initiative and capacity to work, as well as the economic and business environment.

Assess whether you are ready and your business skills.

Assess your business idea

The only way you can know if your business idea is going to work is by undertaking market research. This could involve researching information on the industry, undertaking competitor analysis and surveying potential customers. Determine the strengths, weaknesses, opportunities and threats (SWOT analysis) of your business idea.

Analyse your market research with an open and unbiased mind. If your research shows that a proposed business venture has a high probability of failure it would be unwise for you to proceed.

Read our section on the feasibility of your business idea for more detailed information. IBISWorld reports covering more than 500 industries can be viewed at our business information centre. You can also request industry benchmarks by contacting one of our business advisers.

Build your business plan

Although initially it may seem like a lot of work, a well prepared business plan can save time and money in the long run and help you secure funding and major contracts.

Learn more about business planning and use our template to complete your plan.

Choose your business structure

Once you have established the viability of your business idea, you will need to decide on the structure that best suits your business and its particular circumstances.

Learn more about business structures and their tax implications.

Check your legal obligations

There are legal obligations associated with starting a business including licences, registrations, taxation and insurance.

Before your start trading make sure that you understand your legal obligations in order to avoid any fines or penalties.

Build your support team

It is advisable to surround yourself with trusted and reliable advisers who can help you with start-up issues and then assist you as your business develops.

Your support team may include an accountant, lawyer or industry association. Our building your support team series has more information to help you get started.

Figure out your finances

An important part of running a small business is understanding how to set up and manage your finances. You will need to work out whether you can afford to start the business and how much money you will need. It’s not just your start-up costs, you will also need to assess how you will access the money to fund your future plans.

If you are considering obtaining finance you will need to complete some financial forecasts beforehand to provide to your financial institution or investors.

Market your business

Many small businesses come up with a great business idea and then fail to market it successfully. You need to get out and spread the word about your product or service to the right people to generate business. Advertising and selling are part of the process but there is much more involved.

Our marketing section has some useful resources and information to assist you.

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