ABSTRACT
This chapter provides an overview of some relevant aspects of the debate on the importance of the small firm sector in transition economies and considers the development of small firm policy in Bulgaria since the early 1980s. It presents the findings of some research results on the emerging small firm sector based on sample survey methodologies. The chapter also provides a more qualitative appreciation of the nature of some of the different types of new small firms which have been active in the transition phase. The survey showed that small firms in Bulgaria are mostly family owned, operating mainly under sole proprietorship but with a significant minority of partnerships and limited liability companies. The main problems facing small firms in Bulgaria are low levels of demand, high interest rates, high taxes, and bureaucracy. These factors reflect the special conditions of economic transition in Bulgaria.
