DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

CHALLENGE AND PROSPECT OF ENTREPRENEURIAL ACTIVITY OF MICRO

AND SMALL SCALE ENTERPRISE (IN CASE OF DEBRE MARKOS TOWN)

BY
1. Yiftusira Ayalsew …………….BEE/1627/08
2. Tenaye Tiliku ………………...BEE/1598/08
3. Abebu Tobiaw ………………..BEE/1572/08

A REASERCH PAPER SUBMITED TO THE DEPARTMENT OF MANAGEMENT IN

PARTIAL FULFILLMENT OF THE REQUIREMENT FOR BA DEGREE IN
MANAGEMENT

APRIL, 2019
DEBRE MARKOS, ETHIOPIA
 Acknowledgment

First and foremost great thanks in given to almighty God that he helped our in every aspect of
our life. Next our special thanks also go to our advisor Mr. Birhanu Asfaw who helped our
forwarding valuable comment and suggestion while conducting this research paper. Finally our
heartfelt thank to our family who helped financially and morally.

i
 Abstract
The research would conduct under the title of challenge and perspective of entrepreneur activity
in micro and small scale business enterprises. The researchers focuses on identifying and
evaluate the main problems associated with micro and small scale business enterprise. The
objective of the study is to examine and evaluate the main challenge and prospect of micro and
small scale business enterprise. The data collection method are both primary and secondary
source. The data collection is primary data through questionnaires and interview and the data
collection is secondary by obtained from different documents of the organization and annual
report of the government. The importance of this paper after the completion of the study would
enables to information concerning in the entrepreneurial activity by applying necessary to
investigate and micro and small scale enterprise economic growth in the source of peace and
stability of the place. The study would limit in DebreMarkos town. The research would conduct
by using stratified and simple random sampling technique method. From the total population of
4696 to take 98% of each sample. The analysis part of the study was mostly through descriptive
and present on the base of the percentage, by table and the finding in the micro and small scale
business enterprise challenge and prospect (problem). Finally this research summary of the
paper conclusion and recommendation.

ii
 Acronyms and abbreviations

ACSI Amhara Credit and Saving Institution

MSSE Micro and Small Scale Enterprise

GFDRE Government of Federal Democratic Republic of Ethiopia

iii
 Table of content

Contents Page
Acknowledgment..............................................................................................................................i
Abstract............................................................................................................................................ii
Acronyms and abbreviations..........................................................................................................iii
Table of content..............................................................................................................................iv
List of table.....................................................................................................................................vi
CHAPTER ONE..............................................................................................................................1
INTRODUCTION...........................................................................................................................1
1.1Background of the study.........................................................................................................1
1.2 Statement of the problem.......................................................................................................2
1.3 Objective of the study............................................................................................................2
1.3.1 General objective.............................................................................................................2
1.3.2 Specific objectives...........................................................................................................2
1.4 Significance of the study........................................................................................................3
1.5 Scope of the study..................................................................................................................3
1.6 Limitation of the study...........................................................................................................3
1.7 organization of paper.............................................................................................................3
CHAPTER TWO.............................................................................................................................4
2 LITERATURE REVIEW.............................................................................................................4
2.1 The Concept of Entrepreneurship..........................................................................................4
2.2 Manage the Enterprise...........................................................................................................4
2.3 Forms of business organization..............................................................................................4
2.4 Types of Entrepreneurial business.........................................................................................5
2.5 characteristics of entrepreneurs..............................................................................................5
2.6 importance of entrepreneurship.............................................................................................6
2.7 functions of entrepreneurs......................................................................................................6
2.8 Pole of entrepreneurs.............................................................................................................7
2.9 Advantage of entrepreneurs...................................................................................................7

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 2.10 Disadvantage of entrepreneurs.............................................................................................8
2.11 entrepreneurial challenges....................................................................................................8
CHAPTER THREE.........................................................................................................................9
RESEARCH METHODOLOGY....................................................................................................9
3.1 Research Design.....................................................................................................................9
3.2 Sources of data.......................................................................................................................9
3.3 Target population...................................................................................................................9
3.4 Sampling techniques and sampling size.................................................................................9
3.5 Method of data collection....................................................................................................10
3.6 Data analysis method...........................................................................................................10
CHAPTER FOUR.........................................................................................................................11
4 DATA ANALYSIS, INTERPRETATION AND PRESENTATION........................................11
CHAPTER FIVE...........................................................................................................................23
CONCLUSION AND RECOMMENDATION............................................................................23
5.1 Conclusion...........................................................................................................................23
5.2 Recommendation.................................................................................................................23
References......................................................................................................................................25
Appendix........................................................................................................................................26

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 List of table
Table 4.1 Personal profile of respondents.....................................................................................11
Table 4.2 reason for starting this business.....................................................................................13
Table 4.3 type of business.............................................................................................................13
Table 4.4 to express monthly income............................................................................................14
Table 4.5 Reason for choosing this particular activity..................................................................14
Table 4.6 Management of the business..........................................................................................15
Table 4.7 willing to introduce new idea........................................................................................15
Table 4.8 Major source of capital for micro and small scale enterprise in owner.........................16
Table 4.9 Advantage of government bodies..................................................................................16
Table 4.10 The interval period of training.....................................................................................17
Table 4.11 Is there available working place, capital, market and material....................................18
Table 4.12 Availability of material price and lack of training......................................................20
Table 4.13 wealth creation and poverty reduction increasing living standard, competition market
for goods and services at community place and time for three customer......................................21

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 CHAPTER ONE

INTRODUCTION

1.1Background of the study

Entrepreneurship is the process of creating something different with value addition by devoting
the necessary time and effort assuming the accompanying financial, psychic, social risks and
receiving the resulting rewards of monetary and personal satisfaction and independence.

Micro and small enterprise have became engine of poverty reduction employment creation and
business development among others in various countries worldwide (ChittiHaworn et al, 2011).
In the current global economy micro and small enterprise progressively being regarded as
powerful engines for economic performance and development of most economies (Muzenda,
2014).

In Ethiopia micro and small enterprise play crucial role for socio economic development and
serve as vehicles for employment opportunities and ways of enhancing wealth creation by
support the economic growth (GFDRE, 2011).

The definition of micro and small enterprises around the vary from country and depend on the
phase economic development as well as their prevailing social condition. The definition uses
number of full time employee, total asset and paid capital, and annual turnover as criteria
independently or in combination (Hailu, 2007).

According to Ethiopians federal micro and small enterprise agency the improved definition of
micro enterprise is an enterprise operated with 5 people including the owner and/or their total
asset is not exceeding birr 100,000 under industry and the value of total asset is not exceeding
birr 50,000 for service sector. Small enterprise is those enterprises hired 6 up to 30 employee or
total asset amount birr 100,000 up to 1.5 million birr industry sector and 50,000 up to 500,000
for service sector (GFDRE, 2011).

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1.2 Statement of the problem
Ethiopia backwardness is an indicator of its low level of entrepreneurship. Development the
economic structure also shows as that entrepreneurship is in its infant stage that requires prior
and immediate action of all stake holders to make it more dynamic for the realization of Ethiopia
renaissance development has been so slow that there is a lot of human resource wastage in
Ethiopia both rural and urban area show before (Werotaw, 2010).

In Ethiopia micro and small enterprise have tremendous potential to generate employment for the
majority of the urban labor force (GFDRE, 2011). The government revised strategy strive to
create an enabling environment for micro and small enterprise through putting in place a national
strategy framework and coordinated programs at federal, regional and local levels. Currently
micro and small enterprise obtains direct support from the Ethiopian government. The
government is also committed to facilitate cooperative ventures and development of micro and
small enterprise clusters as well as to promote sub contracting and business linkage between
smaller and larger companies (GFDRE, 2011).

Therefore the major focus of this research will be challenge and prospect of entrepreneurial
activity in micro and small scale enterprise of all sectors such as manufacturing, construction,
urban agriculture, trade and service.

1.3 Objective of the study

1.3.1 General objective

The general objective of the study is to examine the challenge and prospect of the entrepreneurial
activities in relation to micro and small business enterprise in DebreMarkos town.

1.3.2 Specific objectives

 To identify the major challenges that phases the micro and small scale enterprise while
operating their businesses.
 To study the present position of micro and small scale enterprise in DebreMarkos town.
 To study the future prospect of this sectors.

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1.4 Significance of the study
The necessary investigation have some contribution in identify the challenge and seeking
entrepreneur condition also it has the following benefits, it will help the owners of the business
how to run the businesses, it can serve as a data sources for other research who conducts research
in the same topic and it helps the researcher to gain experience to make other research.

1.5 Scope of the study

The study would be limited in Debre Markos town. The study would assess the challenge and
prospect of micro and small scale business enterprise. Not including other areas of east Gojjam
but only limit in Debre Markos town.

1.6 Limitation of the study

During the preparation of this paper the researchers would faced the following problems.

The study was faced shortage of time to collect all the necessary data from owner and employee
in a given period of time.

In side of owners and employees involuntary to give real information.

In the study has to do with the operator’s reluctant to cooperate due to suspicion that dis closing
information. May lead to negative effect on their businesses.

Beneficiaries are insufficiently available in the institution during the period of data collection.

There is also lack of reference books and others.

1.7 organization of paper

This research paper contains five chapters. Chapter one deals with the introduction part of the
research. Chapter two deals with literature review. Chapter three deals with research
methodology. Chapter four deals with data analysis and presentation. Chapter five deals with
summary, conclusion and recommendation.

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 CHAPTER TWO

2 LITERATURE REVIEW

2.1 The Concept of Entrepreneurship

Entrepreneurship is the concept it is defined differently by different authors at different period.
Entrepreneurship is the process by which individuals pursue opportunities without regard to
resource they currently control the essence of entrepreneurial behavior is identifying
opportunities and behavior can be accomplishes by either and individual or group and typically
requires creativity, drive, and willingness to take risks(barringer,2006).

Entrepreneurship is the process creating something new with by value by devoting the necessary
time and effort assuming the accompanying financial, psychology and social risk, and receiving
the resulting rewards of monetary and personal satisfaction and independence (p.peters.2009).

2.2 Manage the Enterprise

After resources are acquired, the entrepreneur must use than to implement the business plan. The
operational problems of growing enterprise must also be examined.

This involves implementing a management style and structure as well as determining the key
variables for success a control system must be established, so that any problem areas can be
quickly identities and resolved. Some entrepreneurs have difficult managing and growing the
venture they created (Mohanty.2007).

2.3 Forms of business organization

It is necessary for the entrepreneur to know the implication of setting up an enterprise as a legal
acceptable form of business organization and what is would mean in terms of regulatory
compliance many small entries take to sole proprietorship or partnership in the beginning and
gradually migrate to other forms with increase in investment and the interest of other investors in
higher enterprise.

4
This form of business organization includes many forms such as sole proprietorship. Partnership
Corporation and other forms of business like private company a public company G. Govin
(2008)

2.4 Types of Entrepreneurial business

There are many opportunities business for entrepreneurs in each type of business. Manufacturing
business actually produce the products they sell using resource and supplies. They create
everything from automobiles to paper. Whole sailing business sell product to people other than
the final customer for example a whole seller supplies your logical granting card store with items
such as cards and wrapping paper. Retailing business sell products directly to the people who
were consume them. Service business sell service rather then product they include hotels, hair
dressers and repair shops. Agricultural business generate fresh product and other form product
such as wheat, mining and extracting business take resource like goal out of the ground so they
can be consumed (Murray Newland,2013-2018).

2.5 characteristics of entrepreneurs

Researchers has identifies several characteristics that distinguishes successfully entrepreneurs
from those that fail.

Successfully entrepreneurs are independent: they want to make their own decisions and so
something they enjoy successfully entrepreneurs have determination and preference
entrepreneurs persist through hard time until goal are met.

Successfully entrepreneurs are self confident entrepreneurs make all the decision they must have
the confident to move choice alone and bounce back from a poorly made decision.

Successfully entrepreneurs are goal oriented they know what they want and they are able to
focus on whining it.

Successful entrepreneurs are relative they think of new way to market their business are always
looking for new solution to problem.

Successful entrepreneurs have a need to achieve and to set high standards for themselves they are
constantly setting challenging new goals. Successful entrepreneurs are alas to act quickly They

5
are not afraid to make quick decision when necessarily. Which help them beet their competitors (
Pieter Diyasmi, 2015)

2.6 importance of entrepreneurship

Economic development essentially means a process of up word challenges where by the real
capital in come and job opportunities of a country increases over a period of time entrepreneurs
sin cities and sustains the process of economic development and growth and in the following
areas.

Innovation it is a process of creating new things changing the existing ways by new ones
transforming and revolutionizing production, distribution of product and service.

Capital formation entrepreneurs can mobilize the idle saving of the public through investment
and these process increases the rate of capital return. Profit is created for investment and
reinvestment.

Improvement in per capital in comment renrenilal venture size Ana exploit opportunities . They
convert the latent and idle resource like. Land. Labor and capital in the national income and
wealth in the form of goods and services.

2.7 functions of entrepreneurs

They create something new. Something different, they search for change, respond to it old export
it. They engage in assessing the potential for the entrepreneurial venture and then dealing with
startup issue.

They gather information. Identify potential opportunities and access competitive advantages.

They manage three things process, phone discoid and growth in managing people. Entrepreneurs
are concerned with things such as selecting and hiring appraising and training, motivating,
managing conflict delegating task and being an effective leader.

In managing growth entrepreneurs thing like developing appropriate growth strategies dealing
with crises employing ways to finance growth determining the ventures values (Peter.2009).

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2.8 Pole of entrepreneurs
Entrepreneurs play a significant role socio-economic development of a country. Economic
advancement, Diversification , growth and structural change greatly depend up on
entrepreneurial development .

Industrially developed countries, entrepreneurs have contributed a great deal to this economic
progress.

1. Role of entrepreneurs as an innovator in economic progress. Contributed a great deal to

this economic growth.
 They boring about new combination
 They use potential technique calknowles for continues technological progress.
2. Role of entrepreneurs implements mechanical skills.
An entrepreneurship is purpose full activity indulged in initiating stimulating promoting
and mandating economic activity for production and distribution of goods and services.
The person behind these movements is a critical factor as well as integral component of
socio-economic transformation the role of entrepreneurs in this area can be shown
 Establishing thing micro and small scale enterprise
 Giving emphasis up on village and cottage industries
 Self employment opportunities can be provided at the gross root levels.
3. The role of entrepreneurs in utilizing surplus labor force industrial activities.
4. Employment arguments

2.9 Advantage of entrepreneurs

Excitement: compared to being regular employees entrepreneurs enjoy Mach excitement
beginning from the planning stage of the business up to development and realization their
seekers obviously love. Being entrepreneurs as they are exposed too much risk you shall never
forget. That all business risks that you agree on taking should be calculated.

 Salary potential:- most people who are employed generally feel that they are not
being compensated for the work they do. in addition they must follow the salary
structure.

7
  Flexibility:- having control of work schedules and commitments make the life of
these entrepreneurs enviable. They are able to take valuation any time and spend
much quality time with their families.
 Independence:- for people who love the idea of not being answerable to anyone
else but those selves be coming entrepreneurs would surely be wonderful. They
would be able to make decisions without the pressure of getting tired
(Clark,2005)

2.10 Disadvantage of entrepreneurs

 No regular salary:- when you start a business you should be prepared to leave behind the
security of having a pay check each month even success a full entrepreneur experience
lean months when all financial resources, are being taken up by the new business.
 Work schedule:- although they have the luxury of a flexible schedule. Entrepreneurs also
make sacristies especially during situations that require them to work longer hours.
 Administration:- because they own the business, all major decisions are made by
entrepreneurs, this is quite a burden and handling such responsibility is quite difficult.
Every deisnas directly affects the future of their business and avoiding costly mistakes is
imperative (Clark,2005).

2.11 entrepreneurial challenges

The process of existing the entrepreneurial ventures shod be approached as carefully as the
process of launching it , it you are selling the venture on appositive note. You want to realize the
value you have built in the business. If you are selling the venture because of decline
performance you want to maximize the potential return. The next topic we want to look at
involves some of the challenges facing minority, women owned business and entrepreneurial
environment.(coulter,2003).

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 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

The study use descriptive type of research design, it describe the challenge and prospect of micro
and small business enterprise activity and aim to minimize the challenges of micro and small
scale business enterprise. Because of this type of technique is the description of the state of
affairs as it exists of a present.

3.2 Sources of data

To conduct this research the researcher used primary sources of data primary data collected from
owners and employee through questionnaires.

3.3 Target population

The target population of the study would be the owners of micro and small business enterprises
and employee in Debre Markos town. The total population of the owners of micro and small
scale enterprise and employee are 4696 in 2011 annual report of Debre Markos town
administrative office.

3.4 Sampling techniques and sampling size

The study would be use both stratified and random sampling techniques the researchers obtains
stratified sampling by dividing the population to sub groups called strata. Because the major
small scale business enterprise employee were sufficiently large in numerous accounting to
various heterogeneous characteristics and selecting members from each stratum for the sample
and random sampling techniques are select by using chance method or random numbers it is said
to be un biased sample then from the total population of 4696.

9
According to yemane (1967). Formula

N 4696
n= 2 = 2 = 98
1+ N (error ) 1+ 4696( 0.1)

No. Type of business N(Nn) Sample

1. Menu factoring 625. 13

2. Construction. 837. 17
3. Service. 1315. 28
4. Urban agriculture. 415. 8
5. Trade. 1504. 32

3.5 Method of data collection

The research would employ different method of data collection thus type of methods structured
and semi structured questionnaire and interview the researcher would be make questionnaire
distributing to the owner of business and employee of the micro and small scale business. The
researchers would prepare both open and closed ended questionnaire.

3.6 Data analysis method

After collection of the necessary data from different sources, the researchers would use different
techniques to analysis the researchers use table. Arrange and organize the source and secondary
data sources and the table with the application of percentage to analysis the collect of data finally
after data analysis and effectively process the data should be presenting and interpreting by using
percentage and table with in their description of the research.

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 CHAPTER FOUR

4 DATA ANALYSIS, INTERPRETATION AND PRESENTATION

Introduction

This chapter to present and analyzed the primary data that obtained from micro and small scale
enterprise owners of Dembre Markos town. The primary data collected from questionnaire of 98
owners and distribute to the selected sample to assess the problems and prospect of
entrepreneurial activity micro and small scale enterprise among this questionnaire of the total 98
questionnaire 88(90%) of there were return and the remain 10 (10%) are void personal
information in this point of view the researcher wonted to know the background of respondent in
terms of age, gender, marital status and level of education.

Table 4.1 Personal profile of respondents

Ite sex No. of respondent Percentage

m
1 Male 58 66
Female 30 34
Total 88 100
2 Age
<20 3 3
21-30 32 36
31-40 33 38
41-50 15 17
>51 5 6
Total 88 100
3 Marital status
Single 36 41
Married 41 46
Divorced 4 5
widowed 7 8
Total 88 100
4 Level of education

11
 Illiterate 4 4
Elementary 7 8
High school 13 15
Certificate 12 14
1st degree 23 26
Above 1st degree 26 30
3 3
Total 88 100
Source, from questionnaire, 2019

As shown the above table 4.1 item one indicates sex that 66% of respondents replied that are
males, 34% of them are females. This indicated that most of the owners are males means the
participation of females in this activity are lower than males.

Item 2 indicates that age 3% of the respondents are found below 20, 36% of respondents are
found between 21-30, 38% of respondent are found between 31-40, 17% of the respondents are
found between 41-50, and 6% of respondents are greater than 51. This show that that is greatest
share constituted by adult age and the small number of young and the small number of above 51
year to participate this activity so indicates that the most of the owner of the enterprise is adult
individual that have alternative future prospect of the sector.

Item 3 (three) indicates that martial status; 46% of respondents are married, 41% of respondents
are single, 8% of respondents are widowed and 5% of respondents are divorced. This implies
that most of respondents are married and few of them are divorced.

Item 4 (four) indicates that educational level, 4% of respondents said that illiterate completed,
8% of responded elementary, 15% of respondent are high school completed, 14% of respondent
are certificate, 26% of respondents are diploma, 30% of respondents are 1 degree, 3% of
respondents are above 1st degree. This indicates that most of the owner are first degree, diploma
and high school but certificate, elementary completed holders are small number. The number of
illiterate and above first degree are few in numbers. So that the government should have to
encourage the participation of illiterate and above first degree completed in micro and small
scale business enterprise.

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Table 4.2 reason for starting this business

Item Why did you start running your business? No. of respondent Percentage
1 Have no alternative income source 28 32
To be independent 33 38
Self help and family support 25 28
Other 2 2
Total 88 100
Source from questionnaire, 2019

The above table 4.2 show that why did you start running your business; 32% of the respondents
have no alternative income, 38% of respondents are to be independent, 28% of respondents are
self help and family support, and 2% of respondent are others. This shows that the respondent are
response most of the business owners and initiate to started this business they to be independent.

Table 4.3 type of business

Item What type of business are you running? No. of respondent Percentage
1 Manufacturing 25 28
Trade 35 40
Construction 10 11
Service 10 11
Urban agriculture 8 9
Total 88 100
Source from questionnaire, 2019

According to the above table 4.3 indicates that in item one what type of business are you
running. 40% of respondents and 28% of respondents most of the business owner are responded
trade and manufacture and construction and service respectively. 9% of respondents are urban
agriculture work participation the business.

Table 4.4 to express monthly income

Item How much income do you get monthly from No. of respondent Percentage
your enterprise?
1 <2000 10 11

13
 2000-4000 24 27
4000-6000 30 34
6000-8000 20 23
>8000 4 5
Total 88 100
Source from questionnaire, 2019

The above table 4.4 item one indicates that express monthly income. 11% of respondent to
response below 2000 birr, 27% of the respondent between 2000-4000 birr, 34% of the
respondents responded between 4000-6000 birr, 5% of the respondents to response above 8000
birr. Therefore, largest numbers of respondent have to great enough monthly income.

Table 4.5 Reason for choosing this particular activity

Item Why did you choose this particular activity? No. of respondent Percentage
1 Due to lack money 18 20
Relevant prior to work experience 10 11
It was family run business 27 31
Other is high competitive 33 38
Total 88 100
Source from questionnaire, 2019

According to the above table 4.5 item one (1) indicate that reasons for choosing this particular
activity. 20% of respondents to response to lack of money, 11% of respondents are relevant prior
to work experience, 31% of respondents it was family run business, 38% of respondents to
response other is high competitive with other. This show that the majority owners of the business
choose this particular activity are highly competitive with the other business.

Table 4.6 Management of the business

Item How is/are the business manage? No. of respondent Percentage

1 By individual 47 53
By partnership 41 47
By cooperative - -
Total 88 100
Source from questionnaire, 2019

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The above table 4.6 item one indicates that management of the business. 53% of the enterprise
managed by one individual and 47% of respondents to response by partnership and the micro and
small businesses are managed by individual more than by partnership. This show that the
majority of the business is managed by one individual.

Table 4.7 willing to introduce new idea

Item Are you willing to introduce new idea that this No. of respondent Percentage
not used by other?
1 Yes 68 77
No 20 23
Total 88 100
Source from questionnaire, 2019

In the above table 4.7 item 1 indicates that willing to introduce new idea. 77% of respondents to
response yes, 23% of respondents responded no. therefore, the majority response have
willingness to introduce new idea that are not used by other and the remaining respondents they
are willingness to introduce new idea that is not used by others.

Table 4.8 Major source of capital for micro and small scale enterprise in owner

Item What is the major source of your capitals? No. of respondent Percentage
1 Own saving 15 17
Sale of asset 20 23
Inheritance - -
Loan from ACSI 49 56
Other 4 4
Total 88 100
Source from questionnaire, 2019

15
The above table 4.8 item one indicates that the majority source of your capital 17% of the
respondents are own saving, 23% of the respondent are sale of asset, 56% of the respondent are
loan from ACSI and no respondent are inheritance and 4% of respondents are others. This shows
that the largest number of respondents have owners of the capital was loan from ACSI.

Table 4.9 Advantage of government bodies

Item Do you have support from government bodies? No. of respondent Percentage
1 Yes 20 23
No 68 77
Total 88 100
2 How the governments support your business?
Providing working place 24 27
Providing consultancy 30 34
Providing material 8 9
Providing training 22 25
Providing market linkage 4 5
Total 88 100
Source from questionnaire, 2019

The above table 4.9 item one (1) indicates that do you have support from government bodies.
23% of the respondents to response yes, 77% of the respondent to response no. therefore the
majority response do not get any type of advantage from the government bodies some
respondents are yes most of the respondents say that sometimes the government bodies
supported by giving advice and to prepare business plan create the opportunity to be competitive
in the market.

Item 2 (two) indicates that 34% of respondents to require providing consultancy, 27% of
respondents to response to provide working place, 25% of respondents to response providing
training, 9% of respondents are providing material aid, and 5% of respondents are providing
market linkage. This indicates the major respondents to wants supported by consultation.

Table 4.10 The interval period of training

Item How often you get training from the No. of respondent Percentage
government?
1 Monthly - -

16
 Quarterly 8 9
Semi annually 15 17
Annually 28 32
With two year interval 37 42
Total 88 100
Source from questionnaire, 2019

In the above table 4.10, item one (1) indicates that to often you get training from the government;
9% of respondent quarterly, 17% of respondents semi annually, 32% of respondent annually and
42% of respondents are with two year interval. Therefore, the majority responses are with two
year intervals and annually in micro and small scale enterprise.

Table 4.11 Is there available working place, capital, market and material

Ite Shortage of working place No. of respondent Percentage

m
1 Very high 34 39
High 20 23
Medium 18 20
Low 14 16
Very low 2 2
Total 88 100
2 Shortage of capital
Very high 38 43
High 43 49
Medium 7 8

17
 Low - -
Very low - -
Total 88 100
3 Lack of market linkage
Very high 27 31
High 32 36
Medium 15 17
Low 11 13
Very low 3 3
Total 88 100
4 Shortage of material
Very high 33 38
High 29 33
Medium 19 22
Low 1 1
Very low 6 6
Total 88 100
Source from questionnaire, 2019

In the above table 4.11 item one (1) indicates that shortage of working place; 39% of respondents
are response very high, 23% of respondents are response high, 20% of respondents are response
medium, 16% of respondents are response low and 2% of respondents are response very low.
This show that the majority owners are shortage of working place.

Item two (2) indicates that shortage of capital; 43% of respondents to response very high
shortage of capital, 49% of respondents to response high shortage of capital, 8% of respondents
to response medium shortage of capital.

Item three (3) indicates that lack of market linkage 312% of respondents say that very high for
micro and small scale business enterprise, 36% of respondents to response high, 17% of the
respondent to response medium, 13% of the respondent to response low, and 3% of respondents
are response very low. This shows that the majority owners are very high and lack of market
linkage and few owners are said very low lack of market linkage.

Item four (4) indicates that shortage of material 38% of the respondents response very high, 33%
of respondents to response high, 22% of the respondent to response medium, 1% of respondents

18
to response low, 6% of respondents to response very low. This shows that the majority owners
very high and high shortage of materials.

Table 4.12 Availability of material price and lack of training

Ite High price of material No. of respondent Percentage

m
1 Very high 29 33
High 41 47
Medium 13 15
Low 4 4
Very low 1 1
Total 88 100
2 Lack of training
Very high - -
High 15 17
Medium 22 25
Low 28 32
Very low 23 26
Total 88 100
Source from questionnaire, 2019

19
According to the above table 4.12 item (1) one indicates that high price of material 33% of
respondents to response very high price of material, 47% of respondents to response high price
of material, 15% of respondent to response medium price of material and the remaining are 4%
of respondents to response and 1% of respondent to response low and very low price of material.

Item 2 (two) indicates that lack of training 17% of respondents to response high lack of training,
15% of respondents to response medium lack of training, 32% of respondent to response low
lack of training and 26% of respondents to response very low lack of training. It shows that some
owners are not lack of training.

Table 4.13 wealth creation and poverty reduction increasing living standard, competition
market for goods and services at community place and time for three customers

Ite Wealth creation and poverty No. of respondent Percentage

m reduction
1 Strongly agree 42 48
Agree 33 38
Neutral - -
Disagree 9 10
Strongly disagree 4 4
Total 88 100
2 Increasing living standard
Strongly agree 39 44
Agree 43 49
Neutral - -
Disagree 5 6
Strongly disagree 1 1
Total 88 100
3 Competition of market for goods and
service at community place time for
their customer
Strongly agree 35 40
Agree 36 41
20
 Neutral - -
Disagree 14 16
Strongly disagree 3 3
Total 88 100
Source from questionnaire, 2019

According to the above table 4.13 item 1 (one) indicates that 48% of respondents to response
strongly agree, 38% of respondents to response agree no one neutral and the remaining are 10%
of the respondents and 4% of respondents to response disagree and strongly disagree.

Item 2 (two) indicates that increasing living standards 44% of respondents to response strongly
agree, 49% of respondents to response agree no one neutral and the remaining are 6% of
respondent and 1% of respondent to response disagree and strongly disagree.

Item (3) three indicates that competition of market for goods and services at community place
and time for their customer 40% of the respondents to response strongly agree, 41% of
respondents to response agree, 16% of respondent to response disagree, and 3% of respondent to
response strongly disagree in the competition of market for goods and services at community
place and time for their customer.

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 CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.1 Conclusion
The objective of the study was to assess and analyzed the challenge and prospect of
entrepreneurial activity in micro and small scale enterprise. In order to achieve this objective
related to respondent of the sector that data obtained were presented and findings the following
consensus are drawn the study as assessed the challenge and prospect of entrepreneurial activity
in some selected micro and small scale enterprise.

The participation of male greater than female on the entrepreneurial activity most of the owner in
micro and small scale enterprise was above diploma and 1 st degree educational level. most of the
owner are belongs to the owners start to their business in order to be in dependent from their
family and have no alternative sources of income.

The owners of the enterprise have the following major problems like lack of or shortage of
capital, shortage of working place shortage of market linkage, shortage of material aid from
government majority of the owner start their businesses in order to be independent from their
family and have no alternative source of income.

The general prospect micro and small scale enterprise for the future to decrease the number of un
employment and increasing of economic of the country.

5.2 Recommendation
As explained about in the summary and conclusion parties some considerable point that use to
given reasonable consideration have been their point passed on the problem identified from the
sample respondent of micro and small scale enterprise owners and employee the following
recommendation suggested improving the efficiency of the research process.

22
Most of the owner was above diploma it wills constraint to go for far on the creativity process.
So it is better to under this grade given for awareness creation of the micro and small business
operation even if the newly opened micro and small business increasing from time to time there
were problems on the owner to start to the new business which are basically. Financial lack of
work place and market linkage so the owners have to look alternative sources of income, work
place, the government should support them to competitive and creative their business activity
privation should provide loan and training services to support of micro and small business
enterprises. And the government should facilitate the working place and to create market
opportunity.

The government should encourage the participation of female in micro and small scale enterprise
because of the female participation in micro and small scale business have great role on the
country economic development.

The small scale enterprise should be managed by two or more provide insufficient manner the
capacity of the entrepreneurship for entrepreneurial activity and reduction un employment in the
Debre Markos town. By that it is possible to increase the overall economic contribution of
entrepreneurial activity on the town.

Most of the problem is like of work place and lack of training from the government bodies so the
government should be facilitate the necessary materials and training program.

23
 References
Chittit Haworn et al, (2011). Definition of entrepreneurship, ()1st edition, London

Muzenda. A, (2004), entrepreneurship and micro and small scale enterprise, New Delhi.

Government of federal democratic republic of Ethiopia, (2011), in Ethiopia definition of micro

and small scale enterprise, Ethiopia

Werotaw Bezabih, (PhD), (2010), Entrepreneurial activity in Ethiopia, (1 st edition), mega

publishing company, Addis Ababa.

Brtuce. R. barringer, (2006), fundamental entrepreneurship, (1st edition), London

P. peters, (2009), entrepreneurship and micro and small scale enterprise, (4th edition). India.

San garam Keshar Mohanty (2007), fundamental entrepreneurship (3rd edition, prentice hill of
India PLC), New Delhi.

G. Gouin, (2008), entrepreneurship and micro and small scale business management, (2 nd
edition) Mc grew hill, New York.

Murray New Lands, (2018), Types of entrepreneurial business, New York.

Piter Diyasmi, (2015), Importants and characteristics of entrepreneurship (3 rd edition, prentice

hill of India (PLC), New Delhi.

Mary Coulter, (2003), entrepreneurial challenge, (2nd edition) Mc Graw hill, London.

24
Appendix
DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Questionnaires

Dear respondents: this questionnaire is designed to collect information regarding challenge and
prospect of micro and small scale enterprise in Debre Markos town. This study will be
undertaking for partial fulfillment of the requirement the award of BA degree in management. It
will be used for academic purpose only and as such your information will be kept confidential.
Your cooperation is very helpful to fulfillment of the research objective.

Please give (√) mark making by to boxes provide and write brief answer in the blank space
where necessary.

No need of writing your name

Part one: Personal information

1. Sex: Male Female

2. Age: <20 20-30years 30-40years 40-50years
above 50years
3. Marital status: Single Married Divorced Widowed
4. Educational level: Illiterate Elementary High school
Certificate 1st degree Above 1st degree
Part two: General information on business enterprise

1. Why did you start running your business?

Have no alternative income source
To be independent

25
 Self help and family support
Other------------------------------

2. What type of business are you running?

Manufacturing Trade urban agriculture
construction service
3. How much income do you get monthly from your enterprise?
<2000birr 2000-4000 4000-6000 6000-8000
above 8000
4. Why did you choose this particular activity?
Due o lack money relevant prior to work experience
it was family un business other is high competitive
5. How is/are the business manage?
By individual by partnership by cooperative
6. Are you willing to introduce new idea that is not used by other?
Yes No
7. What is the major source of your capitals?
Own saving sales of asset inheritance loan from ACSI
Other-------------------------------
8. Do you have support from government bodies?
Yes No
9. How the government support your business?
Providing consultancy
Providing working premises
Providing material aid
Providing market linkage
Training
Other--------------------------------
10. How often you get training from the government?
Monthly semi annually
Quarterly with two year intervals

26
After you read the following items you shall evaluate and your business in the form of put marks
(√) under the choice below

No Item Very high High Medium Low Very low

1 Shortage of working
place
2 Shortage of capital
3 Lack of market
linkage
4 Shortage of material
5 High price of raw
material
6 Lack of training

After you read the following items you shall evaluate and your business in the form of put marks
(√) under the choice below

No Item Strongly Agree Neutral disagree Strongly

agree disagree
1 Wealth creation and
poverty reduction
2 Increasing living
standard
3 Competition of
market for providing
good and service at
community place and
time for their
customer

27