Factors Affecting the Business Performance of Micro and Small Enterprises: In Case of West Showa Zone, Ambo Town.

Abstract

The role of MSEs are not only income and employment generating but also breeding ground for entrepreneurs. However, MSEs growth is affected by a number of factors. Therefore, the main objective of this study is to examine factors affecting business performance of MSEs in Ambo town . The study used a descriptive and explanatory research design and a quantitative research approach to accomplish its goals. Total population of 699 MSE business owners who operate in the manufacturing, trade, and service sectors made up the study's target demographic. A standardized 5-point Likert-scale questionnaire was utilized to acquire the necessary data from a sample size of 255respondants of MSEs using stratified and simple random sampling approaches. Both primary and secondary data sources were employed in the investigation. It used correlation and multiple linear regression analysis, descriptive and inferential statistical data analysis techniques, for data analysis purposes with the help of Statistical Packages for Social Science (SPSS) version 23. The result of the study revealed that Entrepreneurial, Managerial, Working Place, access to Market, access to Infrastructure, Technology and Financial factors are significant factors for MSEs growth. The ANOVA will be used to indicate significance variation on the performance of MSEs in relation to the variations to each of the seven independent variables of the study. Considering the well-recognized importance of MSEs in job creation, income generation and poverty alleviation, all stakeholders (government and non-governmental institutions) have the responsibilities to make intensive effort to remove the factors that stand on the growth of the MSEs.