Althought the discovery of Diamond has propelled Botswana from one of the poorest countries in 1966 to its current economic status as a middle-income country, the country still faces the problem of economic diversification, employement creation, income gereation and distribution, and poverty aliviation. Governmental and non-governmental organizations have put many efforts on the development of Small and Medium Entreprises (SMEs) to diversify the economy away from mining, to create jobs, generate income and alliviate poverty. However, the pace od development of SMEs, after 30 years, is very slow. the small business failure rate is currently estimated to be over 80 percent. There is a general consensus among policy makers, politicians , and researchers in Botswana that this trend should not be allowed to continue indefinately.

the purpose of this paper is to investigate the perceived critical success/failuire factors (PCSFs) affecting the development of SMEs by collecting primary data from 203 SMEs in 3 cities in the Republic of Botswana through questionnaire> Both descriptive and inferential statistics were employed to present the empirical data. The findings showed that ten PCSFs (human resource development; organizational development; managerial background; managerial leadership; competitive strategy) affect the performance of SMEs. The PCSFs are strongly related among themselves, indicating the need for a holistic and systematic approach in addressing them. Important relationships were also found between the PCSFs and fir-specific demographic variables such as ownership statust, experience and operating period. Recommendations and implications for policy and research are also forwarded

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