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The purpose of this paper is to ascertain the reasons for starting the new small business by the people and also to find out the difficulties they experienced at the time of and after starting their business at Pabna and Gazipur – two districts of Bangladesh.

To attain the objectives, both primary and secondary data have been used. To collect the primary data, an interview schedule has been used to interview the selected 250 small entrepreneurs. For secondary sources, the journal, article, web site, textbooks, etc. have been consulted.

The paper reveals that money earning for family, self‐employment, relief from the curse of unemployment, family business tradition, previous experience of the similar or different line of business, lack of higher formal education, etc. are the broad general reasons for start‐up of new business. Shortage of fixed and working capital, lack of training and business skill, lack of collateral free institutional support, lack of experienced and reliable employees, etc. are the common factors that inhibit the entrepreneurs to start and run their business smoothly.

The paper is limited to two districts and trading enterprises only. Owing to time and resource constraints and non‐availability of official records of the number of small‐scale traders, statistically representative sampling cannot be chosen. In order to capture a large sample size, almost all trading concerns of Pabna and Gazipur will have to be visited, which is almost impossible. However, some of the limitations are overcome by synthesizing information from a number of sources. The present paper provides a starting‐point for further research in the small‐scale trading of suburban areas of other districts.

The paper provides useful information about the starting of new small businesses and initial difficulties.