1. Arnela Nanić, Univerzitet u Bihaću, Ekonomski fakultet,
Federation of Bosnia and Herzegovina
, Bosnia and Herzegovina
Small and medium enterprises are the pillar of development of each country. This sector of the economy is one of the key generators of employment and development in general . The role and importance of SMEs is reflected primarily in the fact that this sector accounts for over 99% of the total number of companies both in Europe and in Bosnia and Herzegovina . SMEs provide more than 70 % of jobs in Bosnia and Herzegovina. Some of the biggest obstacles that hinder the development of SMEs are :excessive involvement policies, high levels of corruption, legal and regulatory barriers, the establishment of a complex procedure, insufficient state support , lack of financial resources, lack of entrepreneurial knowledge ( ... ) . A strong barrier to the development of SMEs and the economy as a whole represents a generally negative public attitude towards entrepreneurship in general , and especially to domestic enterprises. To overcome all these obstacles and find the light at the end of the tunnel ? What this sector of the economy makes it special is its flexibility in terms of acceptance of modern technologies and global trends. The strategic goal of BiH is accession to the EU, where SMEs are responsible for the development of the economy. The purpose of this paper is to demonstrate the most importance and most common barriers faced by SMEs in their business. The aim of the study, on a sample of business owners/managers of small and medium-sized enterprises operating in BiH is that major problems facing domestic entrepreneurs will be profiled and will promote a more favorable business environment for SMEs in BiH. The study was conducted using a questionnaire on a sample of small and medium-sized enterprises in BiH. Questionnaires were completed by directors, owners and managers of SMEs from different age groups, with different education levels and sexes. Analysis of the results of empirical studies implicate the basic shortcomings of small and medium enterprises in BiH , and, also the causes of failure of a large number of small and medium-sized enterprises , and provide guidance for future development trends of the same.