For foreign business people, Japan has notoriously been a difficult country in which to conduct business. While many large foreigh firms have succeeded in establishing a presence in Japan, few small foreign-owned businesses have been able to crack this market. In this master's thesis, Paul Gaspari takes a look at the challenges facing the foreign "little guy" in Japan. He conducts a research study on the challenges that exist in order to establish a small business in Japan. Through statistial analysis and interviews, he describes the current state of Japanese SME's, and offers his thoughts on the future of the Japanese market.