What are the Factors Contributing to the Failure of Iranian SMEs?

While it is possible to obtain the information and expertise required to start and run a successful business, the existence of uncertainties in the form of risks and challenges in the market might force a reconsideration of standard procedures. This thesis aims to investigate the internal and external causes of business failure in Iranian small-medium enterprises (SMEs). The high failure rate of SMEs may be reduced if the causes of this phenomenon are properly understood and strategies to address them are implemented. This research helps business owners in Iran create a more profitable and long-lasting strategy for their businesses. This research employs positivism and a quantitative approach. Snowball sampling isemployed to choose participants from a questionnaire and 103 failed owners and managers of Iranian SMEs submitted questionnaires. In addition, the Relative Importance Index (RII) is used to identify the most important internal and external factors that contribute to SMEs' failure. All quantitative information was analyzed using Statistical Package for the Social Sciences (SPSS) software. The research results indicate that the most powerful internal factors that led to failure are : a) Lack of consultation with experienced and professional business people b) Lack of a formal college education c) Personal problems (health, marital, etc.) The research results indicate that the most powerful external factors that led to failure are: a) Sanctions and poor political stability b) High inflation rate and poor economic conditions c) High operating expenses (wages, rent, etc.) The study recommends that by promoting greater transparency and accountability, investing in education and training programs, promoting work-life balance, encouraging strategic planning, investing in business training and mentorship programs, and providing tax incentives and subsidies, the government can play a crucial role in addressing these challenges. By doing so, the government can encourage the growth and success of Iran's small and medium-sized enterprises, which are vital to the country's economic development.