The Struggles of SMEs in France

Starting a business, growing it and making it last in time is not an easy task. According to the French National Statistics Institute (INSEE), 25% of companies fail in the first two years, and 49.5% fail in the first five years. This failure rate is even higher for start-ups: around 80%.

Many internal and external factors influence the lives of SMEs and can sometimes lead to failures. Some of these failures are predictable because of the strategy adopted or the differences between forecasts and reality. However, some failures are difficult to predict. In this article, we will present the main reasons for the shortcomings of SMEs in France.

The first cause of failure, as we said in the introduction, is not a good business strategy. Many companies enter the competition without taking the time to design a medium and long term strategy, without taking the time to analyze the competitive environment in which they engage. They minimize competition and get quickly overwhelmed. They then suffer the fluctuations of the situation without being able to adapt, due to a lack of preparation.

Another cause of failure is the difficulty of accessing funding for start-ups and SMEs. As we know, it is difficult for SMEs to obtain loans and financing. Yet to deal with some tenders or some large orders, it requires a minimum of financial resources. As a result, some SMEs that have the technical capacity to carry out large-scale projects may find themselves limited to lower-level projects, thus hindering the achievement of their objectives. This situation can sometimes lead to the bankruptcy of some companies.

The lack of technical skills is also one of the common causes of failure of SMEs in France. Some of them do not have the necessary skills to join the competitors already operating on the market or the financial resources to develop a research and development strategy.

Fortunately, to limit all these risks, SMEs and start-up coaching services exist in France and are accessible to young entrepreneurs who want to start a business. There are also platforms like Export Portal, which provides SMEs with everything they need to trade safely and confidently with verified businesses all over the world. Register with us today to gain access to our network of buyers and sellers ready to start trading!