Purpose To investigate small business success versus failure prediction variables in the emerging market of Sri Lanka. Design/methodology/approach Survey research was used to collect data in Sri Lanka with a sample size of 450 small businesses (200 failed and 250 successful) based on 10 of the 15 Lussier success versus failure prediction model variables. Findings The results reveal significant differences between all 10 successful and failed variables tested. Practical implications The findings indicate that small business owners and managers can benefit from starting their business with adequate capital, by maintaining good records with financial control, having prior business and management experience, developing a business plan, having higher levels of education, being able to staff the business, starting the business during the early stages of the product life cycle, having partners, and having marketing expertise. Originality/value This is the first major small business success versus failure study conducted in Sri Lanka. Results support the Lussier model’s validity in Sri Lanka, reinforcing its global validity and moving toward a theory; while demonstrating similarity to those in other economies. There is no accepted theory of success vs failure, thus this study is a foundation for further research and comparisons between developed countries and emerging markets.