Effects of Selected Factors on Success of Small and Medium Entreprises In The Trade Sub-Sector In Kenya

Abstract

It is evident that with proper development strategies, the SMEs are capable of providing and surpassing the government's target of creating 500,000 jobs annually. The lower end Kenyan SMEs employs 1-2 workers while over 70% employ only one person. The lower end of SMEs is confined to subsistence and low value activities. Only a few SMEs grow to employ 6 employees or more. Despite their significance, past statistics indicate that three out of five businesses fail within the first few months of operation. The main objective of the study was to investigate the effects of selected factors on success of small and medium enterprises in the trade sub-sector in Kenya. The specific objectives included; to assess the effects of effective marketing on success of small and medium enterprises in the trade sub-sector in Kenya; to assess the effects of capital access on success of small and medium enterprises in the trade sub-sector in Kenya; to analyze the effects of government support on success of small and medium enterprises in the trade sub-sector in Kenya; to explore the effects of access to information on success of small and medium enterprises in the trade sub­ sector in Kenya, to analyses the influence of physical infrastructure on success of small and medium enterprises in the trade sub-sector in Kenya and to evaluate the influence of demographic factors on success of small and medium enterprises in the trade sub-sector in Kenya. The study was anchored on the following theories; Behavioural Theory, Theory of Planned Behaviour, Expectancy Theory and Sociological Theory. The study targeted 12,000 entrepreneurs in eight purposively selected Counties of Kenya who are registered SMEs. The sample size was 840 SME entrepreneurs. Questionnaires and interview guide was used to collect the data. The data was analyzed using descriptive and inferential statistics. The results revealed that effective marketing, capital access, govermnent support, information access, access to physical infrastructure and demographic factors have a positive and significant relationship with success of the SMEs. The study concluded that there are various factors that determine and influence the success of SMEs in developing countries like Kenya. However, the SMEs owners hardly consider the factors that influence the success of the business venture. Due to their nature of being micro and small, there is need to take extra caution in their management. In most cases, simple management mistakes by SMEs owners have compromised the success of many micro and small businesses, hence subjecting them to the risk of closing down. The study recommended the revision of the educational curriculum in developing countries like Kenya to incorporate entrepreneurship skills at all levels of education i.e. right from primary to higher education. The study also recommended that well-developed physical infrastructure like roads, security facilities, water, power, electricity and danced technology be put in place to enable SMEs to operate effectively. The study as recommended that there is need for improved technology and ensure that business information is easily accessible by the entrepreneurs hence, leading to growth and development of SMEs in the trade sub-sector in Kenya.