European Journal of Business and Management www.iiste.

org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.22, 2018

Determinants of the Success of Small & Medium Scale Enterprise

in Gurage Zone: The Case of Wolkite Town
Amdemicheal Berhanu (Lecturer)
Department of Management, College of Business & Economics, Wolkite University, Ethiopia
Abdulshikur Ahemed, Wolkite, Ethiopia

Abstract
This research aims to investigate Determinates of entrepreneurial success of small and medium enterprises
emphasizes on construction, manufacture, service, trade and agriculture sectors in Wolkite. For the sake of
achieving the objectives of this study the information were collected through questionnaire from a sample of 92
operators and face-to-face interviews were conducted with 20 operators of SMSEs. The respondent operators
were selected using stratified sampling technique. Besides the questionnaires, the interview questions were
analyzed using descriptive narrations through concurrent triangulation strategy. The findings further indicate that,
the major determinants for entrepreneurial success for operating small and medium scale enterprises, the major
internal factors that affects the success of entrepreneurs small and medium scale in Wolkite, Are Moreover, the
selected independent variables politico- legal, working premises, technological marketing and dependent
variable financial managerial and entrepreneurship may significantly explain the variations in the dependent
variable. The major finding of the study has further identified that the different influences in which each of the
factors under study have in different categories of the business the research clearly illustrates that, even if the
degree of those critical factors in construction, manufacture, services, trade and agriculture sector slightly differ
from the factors that are critical to work sectors, most of the factors are considerably common for five sectors. It
has been noted that the contextual factors are prevalent to the business such as politico-legal, financial, working
premises, marketing and infrastructure had very high effects on the success of SMSES compared to other factors
in the research area. Furthermore, based on the major findings and conclusions, the following recommendations
were made: Government offices have to organize and facilitate marketing and promotional programs to address
the issue of business development service and convince and aid enterprise to prepare business plan. An endeavor
should be made to increase education level of operators or employees because it will improve entrepreneurial
trait of owners/managers of SMSEs and leads to increase the use of ICT.
Keywords: SME, Entrepreneurial, Performance.

CHAPTER ONE
1.1 Introduction
Small and Medium Scale Enterprises (SMSEs) has usually been perceive as the dynamic force for sustaining
economic growth and job creation in developing countries. They play multifaceted role such as boosting
competition, innovation, as would as development of human capital and creation of a financial system. This
chapter presents the back ground of the study, statements of the problem, the objectives of the study, scope of the
study, delimitation of the study, limitation of the study, definition of the terms and organization of the study.

1.2 Background of the study

Entrepreneurship is a key in the growth and development of once nations. New businesses directly affect
economic performance by creating new jobs and/or products. However, they may also has important indirect
effects: improvements in efficiencies and productivities, price reductions, structural transformation, generation
of new markets and innovations, greater varieties of products, increased division of labor, etc. Further, the
economic impact of entrepreneurship is generally not limited to the industry in which the start-up operated
and/or to the region in which the entry occurs. Rather, the externalities associated with entrepreneurship spill
over close-by industries and regions Acs and Amoros (2008) This has motivated a number of investigations on
what determines entrepreneurship (Parker 2009). However, most of these studies provide evidence from Western
Europe, North America and Japan. The determinant of entrepreneurship in developing countries, on the other
hand, has been studied much less. In this paper we review this literature with the aim of addressing the question
of whether the determinants of entrepreneurship are the same and/or have the same impact in developed and
developing countries.
The small business sector is recognizing as an integral component of economic development and a crucial
element in the effort to lift countries out of poverty Wolfenson (2001). Small- Scale businesses are driving force
for economic growth, job creation, and poverty reduction in developing countries. While the contributions of
small businesses to development are generally acknowledge, entrepreneurs in this sector face many obstacles
that limit their long term survival and development. Scholars have indicated that starting a business is a risky
venture and advises that the chances of small-business owners making it past the five-year mark are very slight

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Vol.10, No.22, 2018

ILO 2000. Some researches into small-business development have also shown that the rate of failure of small
scale businesses in developing countries is higher than in the developed world (Marlow 2009). In Nigeria in
particular, despite the support and incentive programmer to small scale business, Akabueze (2002) briefly stated
that it will be seem reasonable to expect that small businesses will be grow and flourish, but the rate of business
failure continues to increase because of the obstacles affecting business performance which include: lack of
financial resources, lack of management experience, poor location, laws and regulations, general economic
conditions, as well as critical factors such as poor infrastructure, corruption, low demand for products and
services, and poverty. Others include: shortage of raw materials, handicap in obtaining finance, inadequate
competent personnel, inability to control costs and problems of dumping of cheap foreign products and others.
An enterprise small and medium scale enterprises are indispensable in poverties reduction through
employment generation. Cognizant of this, a national SMSEs Development Strategy was formulated in 1997.
Ethiopia’s SMSE Policies envisages not only reducing poverty in urban areas but also nurturing entrepreneurship
and laying the foundation for industrial development. The strategy was revised in 2010/11 with renewed interests
and more ambitious targets on employment and number of entrepreneurs and transition to medium size level.

1.3 STATEMENT OF THE PROBLEM

Small and Medium scale Enterprises (SMSEs) are regarded as the engine of economic growth and equitable
development in developing economies. Philip (2010) found that the most significant factors that affected the
business success of SMEs in Bangladesh are products and services, external environmental factors, and the
management know-how. Products and services hypothesis accepted as innovative and high quality of product
gives added value to SMEs customer in Bangladesh.
According to Huck and McEween (1991) Jamaican entrepreneurs’ success depend on their understanding of
customers’ need, access to capital, support of family, and networking with friends from former schools and
colleges.
According to Organization of Economic Cooperation and Development OECD (2003) entrepreneurship is a
process through which entrepreneurs created and grown enterprises to provide new products or services, or add
value to products or services. According to them, the characteristics of seeking opportunities, taking risk beyond
security and having tenacity to push an idea through to reality combined into special perfective that permeates
entrepreneurs.
Yusop (2010) found that the elements such as, entrepreneurial role models, presence of experienced
entrepreneurs, skills and knowledge of the entrepreneurs, cultural attitudes towards entrepreneurship and
proximity of entrepreneurial universities are strongly correlated with the entrepreneurial culture and mindsets.
The entrepreneurial supports and governmental policies are related to the business angels and risk capital
availability, availability of financial resources, government influences and supports for entrepreneurship in
addition to role of government policies on entrepreneurial activity.
Wolkite has three Administrations formally registered entrepreneurs during the year (1997 -2009) in the
Trade and Industry Development Bureau, enterprise general data code 3 registered 568 entrepreneurs, but 210
off lion not activates. Rest of other 358 enterprises engaged somehow in different activities. Wolkite
administration of each registered at current time is 38% at Bekure 40% at Addis and 22% Gubre Sub -City.
Indeed, regardless of a call for current research, this research has indicating and shows by financial and non –
financial support, infrastructures, shortage of capital budget, market information problem, socio cultural problem
and lack of technology done about assessing the determinants of entrepreneurial success of SMSEs, particularly,
in the study area. Thus, there are limited empirical studies on the challenges of the entrepreneurial activists in the
wolkite. This research would be conducted with an aim of identifying the major challenges for small & micro
enterprises encountered in the study area. Specially, it looks at the determinants of entrepreneurial success in
Wolkite by focusing on manufacture, construction, service, trade, and urban agriculture sectors.

1.4 Research Question

How the factors affect the entrepreneurship success of SMSEs in Wolkite?
What are the major internal factors that affect the success of entrepreneurs?
What are External factors that affect the success of entrepreneurs?
What type of factors highly attributes to entrepreneurship success for SMSE’s operating in Wolkite?

1.5 OBJECTIVE OF THE STUDY

1.5.1 General Objective
The general objectives of this study were to identify the major determinant that affects Entrepreneurial success
for SMSEs operating in Wolkite.
1.5.2 The specific objectives are:
To assess role of factors affect in determining of entrepreneurial success for SMSEs operating in

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Vol.10, No.22, 2018

Wolkite
To identify the major internal factors that affect the success of SMSEs entrepreneurs in wolkite
To identify the major external factors that affect the success of SMSEs entrepreneurs in wolkite
To identify factors highly attributes on entrepreneurship successes in wolkite?

1.6 SCOPE OF THE STUDY

To begin with, the study would be conducted mainly in Wolkite town on identifying the determinants of
entrepreneurial success and identifying factors responsible for the success of entrepreneur. The total frame of the
study is delimited to enterprises in Wolkite town. This is located in Wolkite, the capital city of Gurage zone. The
other area Gubera where the study emphasizes is located in eastern part of wolkite which is around 14 km far
from Wolkite.

1.7 Delimitation of the Study

The study is delimited geographically on addressing the determinants of entrepreneurial success particularly
Wolkite. Although, there are different issues that could be researched in relation to entrepreneurship
development, this studies are delimited to the politico-legal, working premises, technological, infrastructural,
marketing, financial, management and entrepreneurial challenges. As would, the scope of this study was
extended across enterprises especially in the business sector of manufacturing, constructions, services, trades and
agriculture sectors.

1.8 Limitations of the Study

Like all research, this study has limitations. The sources of difficulties encounter in this study are described as
follows: most of the documents that are concern with micro and small enterprises the written data are flexible
change time to time applicant candidate there entrepreneurial activity so that can’t takes a specific data at a
period of time. Another problem encounter in the study has to do with the unwillingness to help due to mistrust
that making know information may guide to unhelpful effected on their business. It is very important to note that
these limitations do not contain any significant interference with the outcome of the data.

1.9 Organizations of the paper

They take it easy of the paper is organize as follows: chapter one, would be introduction of the study, which
contains background of the study, problem statement, research question, research objective, scope of the study
delimitation of the study and organization of the study, chapter two, introduction of the chapter, review of
related literature, study of empirical literature, conceptual frame work and literature gap although chapter three,
would be introduction of the chapter, description of the study area, research approach and design, data collection,
target population, ethical consideration, method of data analysis and chapter four discussion and interpretation,
chapter five summary, concludes and suggests some recommendations.

CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1 Introduction
This chapter would be reviews existing literature on the subject of this studies. It outlines the literature review,
the theoretical and conceptual frameworks of the study, empirical literature and identifies literature gap.

2.2 Theoretical Literature Review

The debt financing gap of SMSEs has been a point of discussion in the literature for some time now. Some
studies focused on SMSEs difficulties in accessing finance often called demand side characterization of the
problem while others presented the main issues in bank lending practices called supply side characterization.
Understanding SMSEs problem of access to finance (or financing gap) implies describing the various limitations
in both the demand side and supply side. The supply side constraints focus on the source of finance, i.e., if
appropriate sources of finance are not available on terms and conditions suitable to SMSEs European
Commission (2001). Whereas, the demand side constraints explain if entrepreneurs or firms do not make use of
existing financing opportunities due to shortage of good project, lack of persuasive business plans or the legal
status of the firms.
Deakins, Hernandez-canovas and koeter-kant (2008), Since banks are not able to control all actions of
borrowers due to imperfect and costly information, they formulate the terms of the loan contracts in such a way
as to reduce the risks associated with borrowing. In the absence of sufficient financial information especially in
developing countries like Africa where there are no credit bureaus, banks generally rely on high collateral values,
which according to bank reduces the risks associated with the problems of adverse selection and moral hazards
resulting from imperfect information Nott (2003). According to this argument, it is clear that banks try to

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mitigate the lending risks through a capital gearing approach instead of focusing on the future income potential
of SMEs. Therefore, collateral has become essential prerequisite to access bank loans Africa Practice 2005.
Another way in which banks react to the market imperfection is by reducing the maturity of their outstanding
loans. Shorter loans allow banks to monitor more frequently the firms’ performance and, if necessary, vary the
terms of the contracts before losses have accumulated Hernández-cánovas and Koëter-Kant (2008).
Consequently bank financing to SMEs in Africa is less significant and more of short term than other developing
countries Martinez Peria (2009). Small and Medium Enterprises in Africa are less likely to take loans from
financial institutions than in any other developing regions; but many of firm and country level covariates
explaining access to finance remain the same inside and outside Africa Beck and Cull (2014). Bank loans
devoted to SMEs in Africa average only 5.4 percent while in other developing countries it amounted around 13.1
percent. And bank lending to such enterprises are costly compared to other developing countries. Fees charged
on SME loans in Africa are almost twice as high as in other developing economies Martinez Peria (2009).
The fundamental reasons behind SMSEs credit demand can be found in their peculiar characteristics. Issues
that involve factors such as inadequate flow of information, inadequacy of collateral, SMSEs-bank relationships,
business and entrepreneurial factors and legal status of the firms are often stated as major demand side constraint.
Owner’s and manager’s characteristics affect SMSEs ability to access finance especially from formal financial
institutions. The entrepreneurs’ behavior has profound consequences on how the business is run. Schmitz (1982)
highlighted that the small scale producers in developing countries fail to expand primarily because they lack
managerial ability. For this reason, entrepreneur related factors take a priority position in all credit assessments
by the borrowers. Kumar and Francisco (2005), found a strong education effect in explaining access to financial
services in Brazil. In a study conducted on UK SMSEs, Irwin and Scott (2009) observed that graduates
entrepreneurs had the least difficulties in raising finance from banks. Similarly, using data from Sub-Saharan
Africa and Anterior 2013 found that the level of education of the owner is positively related with access to
formal banking services.

2.3. ENTREPRENEURSHIP STRATEGIE

Entrepreneurship is the dynamic process of creating incremental wealth. The wealth is created by individuals
who assume the major risks in terms of equity, time and/or career commitment or provide value for some
product or service. The product or service may or may not be new or unique, but value must somehow be in used
by the entrepreneur by receiving and locating the necessary skills and resources Jones (2012) also defined
entrepreneur as “a person who conceives or receives ideas and turns them into business realities”. Gutter man
(2012) by borrowing the idea of Joseph Schumpeter (1883 – 1950), one of the most well-known theorists on
entrepreneurship defined an entrepreneur as one who reorganizes economic activity in an innovative and
valuable way.
That is, an entrepreneur is one who engages in a new economic activity that was previously unknown and
he is also a risk taker because being innovative means there are few rules or history for guidance. Plehn-
Dujowich (2011) has presented different entrepreneurship theories, which explain intrinsic characteristics of
entrepreneurs, using the entrepreneurship model of different scholars as follows: “In Khilistrom and Laffont
(1979) individuals are heterogeneous in their risk preferences and choose between two occupations: entrepreneur
or wage worker. In equilibrium, less risk adverse individuals become entrepreneurs. For Lazear (2005),
individuals are endowed with two skills and choose between two occupations: a specialist that earns an income
proportional to his maximum skill or an entrepreneur that earns an income proportional to his minimum skill. In
equilibrium, individuals that do not excel in any one skill but are competent in both ("jack-of-alltrades") become
entrepreneurs. For Evans and Jovanovic (1989), individuals are heterogeneous in their entrepreneurial ability and
initial wealth, and choose between two occupations: entrepreneur or wage worker. In equilibrium, wealthy high-
ability individuals become entrepreneurs. For Jovanovic (1994), as it is cited in Plehn-Dujowich (2011)
individuals are heterogeneous in their managerial and labor skills, and choose between two occupations: a
manager whose output depends on managerial skill, or a wage worker whose income depends on labor skill. In
equilibrium, the sorting of individuals across occupations depends on the correlation between managerial and
labor skills. For Lucas (1978), individuals are heterogeneous in their managerial ability and choose between two
occupations, manager or wage worker (employed by a manager). In equilibrium, high-ability individuals become
managers; and higher ability individuals operate firms with a larger workforce”. According to the ILO 2007 as
cited in Awogbenle and Iwuamadi (2010), “the increase in the number of youth in secondary and tertiary
education is a positive development; however, labor markets in many countries are presently unable to
accommodate the expanding pool of the skilled young graduates. It is estimated that about 400 million new jobs
would be needed to absorb today’s youth.” Now a day, the role of government sector and hiring institution are
not able to absorb the largest. Labour supply, which never test the employment literally the youth.
Entrepreneurship is considered as the way out to reduce unemployment due to different benefits it has endowed
with. According to Oladele, Akeke and Oladunjoye (2011) “the process of entrepreneurship activity reducing

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unemployment situation in the economy is termed “Schumpeter effect”. “Almost all jobs are created by start-ups
and small and medium sized companies. In contrast, the very large companies tend to decrease jobs by acquiring
competitors and then cutting duplication” Jones (2012). Awogbenle and Iwuamadi (2010) also mentioned that
the following importance of youth entrepreneurship to reduce unemployment together with others
reimbursement of entrepreneurship development. They have listed out as, Creating employment opportunities for
self-employed youth as well as the other young people they employ, Bringing alienated and marginalized
youths back into the economic mainstream and giving them a sense of meaning and belonging, Helping to
address some of the socio-psychological problems and delinquency that arise from joblessness, Helping youths
develop new skills and experiences that can then be applied to other challenges in life, Promoting innovation
and resilience in youth, Promoting the revitalization of the local communities by providing valuable goods and
services and Capitalizing on the fact that young entrepreneurs may be particularly responsive to new economic
opportunities and trends.”
According to Morrison (2006), enterprises which are affected by external macroeconomic factors; political
environment, economic, social, technological, environmental and legal factors, are not controllable. These
factors are rarely affected by management decisions because they are external factors and beyond the control of
SMEs. Others are access to finance, corruption, competition, government policies etc.
Internal factors on the other hand, are those constraints that affect the businesses of SME owner/ manger’s
ability to operate efficiently, despite any inmate potential in the owner/manager Baloyi (2010). According to
Stokes and Wilson (2006) internal factors are the personal attributes, skills and competencies of the individual
owner/manager which are crucial to how well the business faces up to the inevitable crises that arise. An
important thing to note about these constraints is the fact that they are controllable by the owner/manager.

2.4 Factors affecting the development of SMEs

In SMEs, the position of individuals matter a lot as they are supposed to be generalist Drew, (2003) in
performing their functions. Most SME personnel are either in key managerial positions or are classified in a unit
or function that performs a certain task or numerous tasks. Most SMEs are run by a manager who is usually the
owner of the organization (Demirbas, Hussain, and Matlay, 2011).
2.4.1 Internal factors
2.4.1.1 Manager characteristics
The competence of SME manager is the ultimate determinant of survival or failure. The root cause of either
SME failure or poor performance is almost invariably a lack of management attention to strategic issues such as
human resources management. Moreover, the early founder of the SME’s personal competence in selecting the
right business and running it will be crucial, as the firm is likely to be indistinguishable from the owner.
Therefore, as the business develops, growth can be rapidly partially due to unwillingness or inability to draw
others to help with the management of the SME Pasanen (2006). In addition, the management of people (human
resources management) is particularly important as it includes not only the personnel JORIND (2014).
2.4.1.2 Level of education
It is also necessary that the owner/manager and other key personnel in SMEs attain an acceptable level of
education in order to drive SMEs activities. Research studies have found that one of the criteria for successful
SMEs is the level of education Thong, (1999); Sarosa and Zowghi, (2003). A basic level of education such as
General Certificate of Education (GCE) or its international equivalent is critical as it allows easy communication
and appreciation of business terms in global business. Another individual factor in relation to education is the
level of ICT knowledge. It is expected that an acceptable level of ICT knowledge of the owner or key manager,
and other key decision making personnel can assist the SME to adopt appropriate activities in their business Teo
and Ranganathan, (2004); Meso, Musa and Mbarika, (2005); Looi, (2005).
2.4.1.3 Socio-cultural issues
Culture is another important factor that explains cross-country differences in SME development as entrepreneurs’
decision-making is influenced by their cultural backgrounds. The term “culture”, is defined as “the collective
programming of the mind that distinguishes the members of one group or category of people from another”
Hofstede, (1991). Some empirical literatures have demonstrated the relationship between entrepreneurial
activities and cultural dimensions, and have found similar results. In general, low power distance, individualism,
low uncertainty avoidance, and long-term orientation are associated with entrepreneurial activities and
innovation Shane, 1993, 1995; Thomas and Mueller, 2000; and Jones and Davis, (2000). Collectivism can be a
good support to subsequent implementation after invention Nakata and Sivakumar, (1996).
2.4.2 External factors
2.4.2.1 Access to finance
The first external factor is the financial constraints. Lack of capital or financial resources was a major barrier for
SMEs and entrepreneurs who usually have to mobilize their own capital or their own resources to establish or
expand their business Harvie, (2005). In addition, SMEs in developing countries have difficulties in accessing

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bank loans as a consequence to the high risk for failing loans, low profitability and lack of collateral required by
banks Harvie (2005).
For many SMEs in Wolkite, access to finance and capital appear to be difficult. This comes as a
consequence of weak banking institutions, lack of capital market and inefficient legal framework regarding
credit and collateral assessment. Financing of SMEs and access to finance plays a crucial role in the growth
process and development of the enterprises (WB, 2011).
According to Fatoki and Garwe (2010), the lack of capital seems to be the primary reason for business failure
and is considered to be the greatest problem facing small and micro business owners.
2.4.2.2 Government policies /poltico-legale /factor
The importance of SMEs to the economy of a country indicates how important it is to have government policies
that support SMEs, including regulations that enable them to operate efficiently and regulations that reduce their
administrative costs Harvie and Lee, (2005). Although there have been initiatives by governments to promote
and support SMEs in order to enhance their development and reduce poverty, there is still a lack of laws and
genuine administrative procedures such as accessibility to assistance from the government agencies.
According to World Bank research, complex tax systems, low level of trust in the judicial system, and the need
to pay bribes to access public services, represent major barriers, especially in South East Europe (WB, 2000).
2.4.2.3 Marketing
To have a good chance of survival, a small business firm needs to answer the basic strategic questions: “what
markets are we targeting, with what products?” A common weakness in the SME owner/ managers lies in their
failure to understand key marketing issues Stokes and Wilson (2006). Stokes and Wilson (2006) believed that
product or service concepts and standards often reflect only the perceptions of the owner, which may not be
mirrored in the market place. They further stated that, minor fluctuations in markets can topple a newly
established small/micro business) firms, particularly where it is reliant on a small number of customers.
2.4.2.4 Application of information technology
Apulu and Latham (2011) found that the competitiveness of SMSEs will be increased through adopting
Information and Communication Technology. Subrahmanya, Mathirajan, and Krishnaswamy (2010) summed up
that those SMSEs which have technological innovation have a higher growth compared to the SMSEs which are
not creative in the sales turnover, investment and job.
2.4.2.5 Environmental factors
The external environment of the SME organization also impacts some challenges to e-commerce adoption. It
describes the realm of business engagement of the firm (Scupola, 2009). This describes factors such as
government role; business partner affiliation and preferences; nature and characteristic of value chain; logistics
and telecommunications infrastructure; economic and political instability; human-rights issues; business culture
macro-economic policies; natural disasters and floods.

2.5 Empirical Literature Review

According to Mead and Liedholm (1998) and Swierczek and Ha (2003), the main factors that affect the
performance of entrepreneurship in developing countries is not their small size but their separation, which delay
access to markets, as well as to information, finance and institutional support. The argument that small
businesses in Africa are crucial in the role they play in employment creation and general contribution to
economic growth is not new. Although this may be true, the vast majority of new enterprises tend to be one-
person establishments Mwega (1991). This has tended to ensure that the journey of the youth entrepreneur in
many instances is short-live, with the statistic of entrepreneurship failure rate in Africa being put at 99 per cent
Rogerson, (2000). Various reasons for these failures have been proposed by scholars including lack of supportive
policies for entrepreneurship development McCormick (1998), intense competition with replication of micro-
businesses (Manning and Mashego (1993); manager characteristics including lack of skills and experience
Katwalo and Madichie (2008 and Verhees and Meulenberg (2004).
A study by Hall 1992 has identified two primary causes of small business failure appear to be a lack of
appropriate management skills and inadequate capital (both at start-up and on a continuing basis). The research
undertaken in Tanzania by surveying 160 micro enterprises showed that high tax rates, corruption, and regulation
in the form of licenses and permits, are found to be the most important constraints to business operations of
micro enterprises in Mulugeta (2011).
A view expressed by Fredland and Morris (2009) argued that the causes of failure cannot be isolated and
that ‘any attempt to do so is, at base, a futile exercise’.
Roy and Wheeler (2006) identified that the level of training of micro entrepreneurs (both formal and
informal); experience and number of years in operation; knowledge of the market; level of differentiation (in
terms of price, quality or other) and diversification of products; access to the necessary resources and/or
technologies; level of planning; vision for the future; and the entrepreneur’s level of poverty are among the
factors contributing to success of entrepreneurship although lack of market knowledge and training, limited

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access to capital, and lack of co-operation among possible business partners are some of the factors inhibiting the
growth and development of the micro enterprise sector.
2.5.1 Empirical reviews from Ethiopian Micro and Small Enterprises perspective
Eshetu and Zeleke (2008) conducted a longitudinal study to assess the impact of influential factors that affect the
long-term survival and viability of small enterprises by using a random sample of 500 SMSEs from 5 major
cities in Ethiopia. According to this research, that lasted from (1996-2001), the factors that affect the long term
survival of SMEs in Ethiopia are found to be adequacy of finance, level of education, level of managerial skills,
level of technical skills, and ability to convert part of their profit to investment. This is so because the findings of
the study revealed that businesses that failed, during the study period were characterized by inadequate finance
(61%), low level of education (55%), poor managerial skills (54%), shortage of technical skills (49%), and
inability to convert part of their profit to investment (46%). The study further indicated that participation in
social capital and networking schemes such as Iqub3 was critically helpful for long-term survival of the
enterprises. Businesses that did not participate in Iqub schemes regularly were found to be 3.25 times more likely
to fail in comparison with businesses that did, according to the study.
In their study, based on the survey covering 123 businesses units in four Kebeles of Nifas Silk- Lafto and
Kirkos sub-cities of Addis Ababa, and aimed to investigate the constraints and key determinants of growth,
particularly in employment expansion,(Paul and Rahel 2010) found out that the studied enterprises registered 25%
increment in the number of total employment they created since their establishment with an average annual
employment rate of 11.72%. With regard to the sources of initial capital of the studied enterprises, the study
indicated that, the main ones were loan from MFI (66.7%), personal savings/Iqub (17.5%), and loan from
family/friends (17.1%). Moreover, the concrete problems that the targeted SMSEs faced at their startup were
lack of capital (52.8%), skills problem (17.9%) and lack of working space (17.1%). Moreover, Daniel (2007),
identified that lack of raw material, stiff competition and shortage of working capital.
Mainly relying on a sample survey of 557 operators and 200 SMSEs chosen from four major cities of
Ethiopia namely Adama, Hawassa, Bahirdar and Mekelle, a research was conducted with the intention of
assessing the contribution of the SMSE strategy to poverty reduction, job creation and business development.
The raised causes for this dull prospect of business were not growing (33%), lack of finance (13%), lack of
market (11%), and lack of working space (4%) Tegegne and Meheret’s (2010)
The major constraints identified by various studies on entrepreneur in Ethiopia are associated with market
and finance problems. The causes of market-related problems of entrepreneur full of activity in manufacture,
construction, urban agriculture, service and trade are shortage or absence of marketing skills, poor quality of
products, absence of marketing research, shortage of market information, shortage of selling places, and absence
of sub-contracting FMSEDA (2006).
According to Assegedech Woldelul (2004) Shortage of funds discourages the smooth operation and
development of SMSEs. Even if there are credit facilities, some of the SMSEs do not use the money for the
intended purpose. They rather divert it for other unintended and non-productive expenditures. Consequently, the
enterprises fail to return the money back to the lender on time. This can result in a loss of credibility to get
repeated loans when needed.
According to Assegedech (2004), competition is also another problem that hinders the performance of
SMSE. She explained it: As is mostly the case and common recognition, "Competition is Cruel", which implies
that some larger companies in relation to SMSEs have advantages due to: selling at reduced price without
reducing product quality using economies of scale, customer targeting capacity, proper and intensified
product/service advertising capacity, good personal contacts and networks, sound industry reputation and
sufficient information regarding existing market and capacity to exploit more market opportunities.
In his research, Dereje (2008) studied the nature, characteristics, economic performance, opportunities and
challenges of SMSEs in the construction sector based on 125 sample enterprises. The results of the study reveal
that the main constraints of the SMSEs were shortage of capital, lack of raw materials, absence of government
support, lack of market, lack of credit facilities and high interest rate. Studies were also conducted specifically
with a purpose of identifying the problems that SMSEs encounter. For instance, Workneh’s (2007) research
undertaken in Kolfe Keraneo sub-city of Addis Ababa indicated that lack of capital, lack of market, unfavorable
policy, and inadequate infrastructure, absence of adequate and relevant training, bureaucratic structure and
procedures are among constraints faced by entrepreneur. Similarly, Adil’s (2007) research carried out in Addis
Ababa shows that inappropriate government intervention, shortage of capital, location disadvantage, lack of
market and lack of display room are the major challenges that hinder entrepreneurship.
According to HLCLEP (2006), there is lack of entrepreneurial and managerial skills, which in turn leads to
problems in production due to the unfamiliarity of workers with rapid changing technology, lack of coordination
of production process and inability to trouble shoot failures on machinery and/or equipments is a critical problem
that SMSEs are facing since they cannot afford to employ specialists in the fields of planning, finance and
administration, quality control and those with technical knowledge. Mulugeta (2011) has identified and

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categorized the critical problems of SMSEs in to market-related problems, which are caused by poor market
linkage and poor promotional efforts; institution-related problems including bureaucratic bottlenecks, weak
institutional capacity, lack of awareness, failure to abide policies, regulations, rules, directives, absence of
training to executives, and poor monitoring and follow-up; operator-related short comings like developing a
dependency tradition, extravagant and wasting behavior, and lack of vision and commitment from the side of the
operators; entrepreneurship -related challenges including lack of selling place, weak accounting and record
keeping, lack of experience sharing, and lack of cooperation within and among the SMSEs and finally society-
related problems such as its distorted attitude about the operators themselves and their products.
In reality, literature on entrepreneurship in Ethiopia is scanty and most of the available studies were not
conduct in line with performance aspects of micro enterprises. However, these researches try asses to the
determinants of entrepreneurial success of SMSEs in Wolkite. A holistic way by targeting and deeply
investigating those operators engaged in manufacture, construction, urban agriculture, service and trade in
Wolkite.

2.6 The Conceptual Framework

Conceptual framework means that concepts that relate to one another were used to explain the research problem.
Since business success is influenced by both internal and contextual factors, operators need to understand what
influences businesses to reach max out performance. The contextual factors include politico-legal, working
premises, technological, infrastructural, marketing and financial factors, managerial and entrepreneurship. The
influence of these factors to the firm performance is very important but it is not worthy that the management has
no (little) control over them Wanjiku, (2009). Nevertheless, the factors must be closely monitor to ensure that
severe measures are taken within the best time to either take advantage of the opportunities or combat the threats
found in the external environment. The internal factors that influence the firm’s performance can be classified as
management and entrepreneurial factors. To align the conceptual framework with the research objectives,
business performance is the dependent variable whereas politico-legal, technological, infrastructural, marketing,
financial, management, working premises and entrepreneurial factors are all independent variables. The
relationship can be expressed and shown in the following diagram.

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Figure 2.1 Conceptual frameworks (Own Model)

In this study profitability was decide on to measure performance of these youth entrepreneurship. This is
mainly because of the following three reasons. First, as the pilot study clearly indicates this entrepreneurship are
more focusing on profitability than other modes of success measured. Second, the SMSEs were not applying
balanced score card to measure their overall performance. Third, as recommended by Rami and Ahmed (2007) a
profit has been widely adopted by most researchers and practitioners in business performance models.

2.7 Identified Empirical Literature Gap

A lot of researches have been accepted out locally and internationally reviewing small and micro enterprises.
Most of these research concentrate on businesses in the cities and urban centers. They also concentrate on their
study areas based on their own objectives. There are scarcities of literature touching on the rural traders.
Therefore, the proposed study would build on the local literature on the determinants of entrepreneurial success
in wolkite of urban market traders. Similar studies have focus on the challenges face by SME traders but this
study will concentrate on what affects their success. The impact of access to business information, access to
finance and availability of managerial experience are yet to be research as a single intervention in an urban
setting. These studies would concentrate mainly on the determinants of entrepreneurial success and entrepreneur
in Wolkite. The scarce availability of reliable and valid data continues to be one of the key obstacles in
understanding small and micro entrepreneurs in the urban area Wolkite. These studies would helpful to building
on the locally scarce available data.

CHAPTER THREE
METHODOLOGY OF THE STUDY
3.1.INTRODUCTION
In order to analyze the determinants of entrepreneurial success of SMSEs potential impacts of factors on the

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success of entrepreneurship, these studies made used of a research methodology. This section provided an
overview of the study’s research approach which lays within the mixed methods strategies. The chapter
discusses procedures and activities under taken, focusing on namely the study’s description of the study, research
design, questionnaire design, data collection, sampling strategy, data processing and analysis and instrument
development. Besides, the section deals with a discussion on the ethical issues and the study area profile.

3.2. Description of the study area

Wolkite is the capital town of Gurage zone district, and also 158 km from Addis Ababa on the main road of
Jimma and 430 km through southern nation’s nationalities and peoples, regional state (SNNPRS) Hawass. This
means that it could be reach from Addis Ababa to or via Hawass. It also Gubre sub-city is located in Estern
Gurage zone district 14km western direction of Wolkite town. In Wolkite works the intention of assessing the
contribution of the SMSEs strategy to poverty reduction, job creation and business development interims of
entrepreneurship development and unemployment reduction perspective. They work different activities to
organize different types of enterprise registered indifferent job creations. They mention in the Trade and
Industry Development Bureau registered manufacture, construction, service, trade, and urban agriculture sectors,
hotel and tourism, saving, technology, marketing but not all are activities and not intention to reduction of
unemployment.

3.3. Research Approach and Design

Research designing are the blueprint for fulfilling research objectives and answering research question in other
words, it is a master plan specify the methods and procedures for collecting and analyzing the needed
information. It ensures that the study would be relevant to the problem and that it used economical procedures.
This study employs a descriptive research design. The major purposes of descriptive research are description of
the state of affairs as it existing at present. Then this study would described and critically the determinants of
entrepreneurial success of SMSEs in wolkite. Moreover, the study would be utilized cross-sectional in the sense
that all relevant data was collected at a single point in time. And obtaining information from a cross- section of a
population at a single point in time is a reasonable strategy for pursuing many descriptive researches Janet and
Ruane (2006). The studies used both qualitative and quantitative data. The qualitative data includes those data
that are primarily collected through interview and quantitative data includes objective items through the
questionnaires. In this study, a combination of qualitative and quantitative approaches of doing research will be
employs which has been practice, as recommend by Creswell (2009).

3.3. Method of Data Collection

3.3.1 Primary data collection
In order to realize the target, the study used well-designed questionnaire as best instrument. This was completed
by the owner managers/or operators of the enterprises. Besides, face-to-face interviews with the MSEs
operators/and the relevant owner managers who heads the enterprises in the selected sectors that are involves in
construction, manufacture, tread, serves and agriculture study area. The interview method of data collection is
preferred due to its high response rate. Those are it gives the two people concerned an opportunity to interacted
and get details on the questions and answers. Through interviews, clarification of issues is easily achievable
leading to accuracy of data from the respondents
3.3.2. Secondary data collection
Secondary data collection it takes from micro and small enterprises’ office and Trade and Industry Development
Bureau different registration files, pamphlets, office manuals, circulars and policy paper and entrepreneur’s data
would used to provide additional information where appropriate. Besides SMSEs variety of books, published
and/or unpublished government documents, websites, reports and newsletters will review to make the study
fruitful.

3.4. Target Population

In these studies to selected sample size, a list of the population formally registered entrepreneurs the Wolkite
Town Administration Trade and Industry Development Bureau by the year (1997-2009) were obtained. The total
population of the study is 358 enterprises which includes constructions the total population 94, manufactures the
total population 73 trade the total population 88, services the total population 83 and agriculture the total
population 20 enterprises in the three administrative. The sample size selected here is considered as
representative of the constructions, the manufactures, the trade, the services and agriculture enterprises in the
three administrative. And also large enough to allowed for precision, confidence and general abilities of the
research findings.
3.4.1 Sampling Techniques Cluster sampling techniques is used to drawn the study participants. Because of
heterogeneity and geographical areas description among entrepreneurs and because of needed to ensure adequate

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sample sizes selection of subgroups a stratified sample follow by cluster sample technique is applied. The
stratification is done by constructions, manufacture, trade, services and agriculture where the target population is
found in constructions is 94, manufactures accounts for 73, trade accounts for 88, the total population in the
services accounts for 83 and agriculture accounts for 20 in Wolkite, enterprises in the three administrative. A
cluster sample is prefer in this case, because it would be considered more effective when there are geographic
areas/clusters where greater chance existed for sample the desire units/individuals.
3.4.2. Sample Size Determination
There are 358 enterprises registered at wolkite which are considered to be the target population of this study. In
addition to that other sample for the research would be officials and exported for entrepreneurs. According to
expert would be selected purposely with the intention of obtain the person that could be provided more
information about entrepreneurs For the interview take selection simple random sampling is the basic selection
process of sampling and is easiest to understand.
Interview: is an adaptable way of finding things out. The human language is very useful in opening of what lies
behind people’s action Zikgmund, (1994). Interview allows person-to-person discussion that could be lead to
increase insights in to respondents‟ thoughts, feelings and behavior on important issues of enterprises. Another
advantage that could be derived from the interview is its flexibilities in expressing different viewpoints on the
subject under study. Thus, key informants (determinants of entrepreneurial successes of SMSEs) were
interviewed in depth using unstructured questions during the working hours. The participants be selected by each
firm manufacturing, 19 construction, 24 service, 21 trade 23 and urban agriculture 5 than the total sample take 92,
majority of the interviewees are owner-managers and managers, around through random sampling method
because of their closeness to executed the issues.
The sample size is determining use the formula props by (Kothari2007). According the formula for sample
size determination:

n = pqz2N
(N-1) e2+z2pq
Where,
n= is the sample size for a finite population
N= size of population which is the number of households.
p = population reliability or frequency estimate for sample of size n, where p is 0.5 and q=0.5.
e = margin of error consider is 10% for this study.
z =normal reduce variable at 0.05 level of significance z is 1.96.
According to the above formula, the sample size for all five entrepreneurs is
Determination is:

n = 0.5*0.5*(1.96)2*358
(358-1) 0.12+((1.962) *0.5*0.5)
n = 358.84
3.9004
n = 92.00 F = 92
so we have 73 entrepreneurs as sample formula use for sample size at enterprise level is
n = N ( enterprise) *n(all enterprise) where n(all enterprise) :- is the sample size
N (all enterprise) at enterprise
N= (enterprise):- is the population size at enterprise
n = (all enterprise):- is sample size of five enterprises
n = (all enterprise):- is the population size of three administration area enterprises through the survey will be
conduct.
n(construction) = 94*92 = 24
358.84

n(manufacture) = 73*92 = 19
358.84

n(services) = 83*92 = 21
358.84

n(trade) = 88*92 = 23
358.84

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n(agriculture) = 20*92 = 5
358.84
There for, the total no of sample is 73, out of 283 target population which is 25.57%.
Enterprise Frequency Sample proportion Sample size
manufacturing, 73 25.57% 19
Construction 94 25.57% 24
Service 83 25.57% 21
Trade 88 25.57% 23
urban agriculture 20 25.57% 5
Total 358 92

3.6. Method of Data Analysis

This is the further transformation of the process data to look for patterns ad relationship between and among data
groups by using descriptive and inferential analyze the data (statistical) analysis. The statistical package for
social science (SPSS) would be used to analyze the data obtained from primary sources. Specially, descriptive
statistics mean and standard deviation and charts. Descriptive analysis is used to reduce the data in to summary
format by tabulation mean the data arrange in table format and measure of central tendency (mean and standard
deviation). Moreover, pie charts would be used to describe the general characteristics of enterprises. The reason
for using descriptive statistics was to compare the different factors. The reason for using descriptive statistics is
to compare the different factors as would, the interview questions would be analyzed use descriptive narrations
through concurrent triangulation strategy.

3.7. Ethical consideration

All the research participants include in this study is appropriately inform about the purpose of the research and
their willingness and consent be secure before the commencement of distributing questionnaire and asking
interview questions. Although all interview sessions has tried to tape-record, it was impossible as the
respondents were not voluntary. Regarding the right to privacy of the respondents, the study maintained the
confidentiality of the identity of each participant. In all cases, names are kept confidential thus collective names
like ‘respondents’ were used.

3.8 Validity
Validity is the degree to which a test measures what it purports to measure Creswell (2009). Validity defined as
the accuracy and meaningfulness of the conclusion which are based on the research results. It is the degree to
which results obtained from the analysis of the data actually represents the fact under study. He contends that the
validity of the questionnaire data depends on a crucial way the ability and willingness of the respondents to
provide the information requested.
A pilot study was conducted to apply the methodology and test instrument (SPSS16.V) such as a
questionnaire before administering the final phase. Questionnaires was tested on potential respondents to make
the data collecting instruments objective, relevant, suitable to the problem and reliable as recommended by John
Adams (2007). Issues raised by respondents were corrected and questionnaires were refined. Finally, the
improved version of the questionnaires were printed, duplicated and dispatched.
The instruments selected can help to show factors that small and medium scale enterprises /SMSES/. The
relevant data was collected on the factors of the SMSEs that can better indicate the relationship between factor
SMSEs. The structured and unstructured interviews can also validate the measurement. Moreover, to have valid
conclusion, using descriptive and inferential analyze the data. And by using the statistical package for social
science (SPSS) would be used to analyze.

3.9 Reliability
The reliability of instruments measures the consistency of instruments. Creswell (2009) considers the reliability
of the instruments as the degree of consistency that the instruments or procedure show. The reliability of a
standardized test is measures the strength that there is a perfect negative reliability and the latter shows that there
is perfect positive reliability. In this study each statement rated on a 5 point likert response scale which includes
strongly agree, agree, undecided, disagree and strongly disagree. Based on this an internal consistency reliability
test was conducted determinants of entrepreneurial success of small and medium scale enterprises in Wolkite.
With a sample of 30 operators and the Cronbach's alpha coefficient for the instrument was found as 95% which
is highly reliable. Typically alpha values of 0.95 since, instruments were developed based on research questions
and objectives; it is possible to collect necessary data from respondents. Then, instruments are consistent with
the objectives of the study.

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CHAPTER FOUR
RESULT, DISCUSSION AND INTERPRETATION
4.1 INTRODUCTION
To facilitate ease in conducting the empirical analysis, the results of descriptive analyses are presented. The
purpose of this study is determination of entrepreneurial success of small and medium scale enterprises in
Wolkite. How far, the owner mangers are aware on the determination of entrepreneurial success of small and
medium scale enterprises. Data were collected from operators or owner managers of success of small and
medium scale enterprises found in Wolkite.
Ninety two questionnaires were distributed across the five sectors in wolkite, out of which 92 were
completed and retrieved successfully, representing 92% respondents’ rate. Of the 92 questionnaires
administered, construction, manufacture, services, trade and agriculture were distributed to respectively. The
numbers of questionnaires retrieved from construction 24, manufacture 9, services 18, trade 19 and agriculture
are 20 respectively. This represents a response rate 83.33%, 100%, 100%, 89.47%, and 100% for construction,
manufacture, services, trade and agriculture respectively.
Generally, this section is organized in the following manner:- first, the general information about success
of small and medium scale enterprises were presented and analyzed , second, data collected through
questionnaires and interviews were analyzed concurrently.

4.2. GENERAL CHARACTERISTICS OF THE ENTERPRISES

4.2.1 Category of Business Venture

Agriculture, 13%

Construction, 25%
Trade, 20.7%
1st construction
2nd manufacture
3rd services
4th trade
5th agriculture

Manufacture, 13%
Services, 18.5%

Figure 4.1 sectors respondents

Source: Wolkite trade and industry development bureau 2017
As shown in figure above, the sample firms were operating in five sectors of the enterprises. Most of them
are engaged in followed by construction 23(25%), manufacture 21(22.8%), services 17(18.5%), trade 19(20.7%)
and agriculture (4.11%). This division of success of small and medium scale enterprises by sector type was
believed to be helpful to study each sector critical factors that affect the different the success of small and
medium scale enterprises. This is because firms in different sectors of the enterprises face different types of
problems. That means the degree of those critical in construction sector and may differ from the factors that are
critical to manufacture, services, and trade and agriculture sectors.
4.2.2 The Main Source of Start –Up and Expansion of Finance
Starting own business requires a starting capital rather than mere existence of ideas. To capture information
regarding the relative importance of the various sources of finance, enterprises were asked whether they ever
received credit from each of a given list of sources of finance. The following figure shows the main sources
funds.

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Figure 4.2 sources of finance for starting business

Equb/Idir, 3.3
Firends,21.7
Banks, 4.3 Microfinance
Institution,3.
1st MFI
2nd Personal

Family,19.6 3rd family

4th Equb/Idir
5th Friends
6th Banks

Personal,47.8

Source: - own survey 2018

As can be seen from the figure personal saving 44(47.8%) are the most frequently used sources, followed
by iqub/idir 3.3(3.3%), family 18(19.6%), friends/relatives 20(21.7%), and micro finance institution 3(3%) in
that order. And the remaining sources of finance come from Banks 4(4.3%). This shows that the main sources of
finance for success of small and medium scale enterprises in Wolkite to show the conserving the respondent
result in above. But also other traditional source like family and friends/relatives and personal saving plays the
greatest role. In the Wolkite, informal sources play the greatest role in establishment of small and medium scale
enterprises than the formal sources like microfinance and banks.
According to Assegedech Woldelul (2004), competition is also another problem that hinders the
performance of SMSE. She explained it: As is mostly the case and common recognition, "Competition is Cruel",
which implies that some larger companies in relation to SMSEs have advantages due to: selling at reduced price
without reducing product quality using economies of scale, customer targeting capacity, proper and intensified
product/service advertising capacity, good personal contacts and networks, sound industry reputation and
sufficient information regarding existing market and capacity to exploit more market opportunities.
Besides, the result of interview shows that majority of small and medium scale enterprises in the study area
uses informal sources. The formal financial institutions have not been able to meet the credit needs of the small
and medium scale enterprises. According to majority interviewee, the reason for emphasizing on informal
sectors are that the requirement of collateral/guarantor is relatively rare since such sources usually take place
among parties with intimate knowledge and trust of each other. But the supply of credit from the informal
institutions is often so limited to meet the credit needs of the small and medium scale enterprises. To wind up,
such constraint of finance for small and medium scale enterprises affects their success directly or indirectly.
Respondents were also interviewed to give their opinion regarding saving, majority of them had a prior saving,
though incomparable with their current level. In conformity with this finding, Currie (2009) stated that: majority
of success of small and medium scale enterprises in countries such as Ethiopia operate at under capacity due to
lack of credit or over-regulation. This problem has been intensified by the demand for collateral by commercial
banks as a prerequisite for the approval of loan applications. This is also consistent with previous findings. For
instance, according to Woldehanna (2008) stated that formal money lending institutions have so far failed to
produce innovative, affordable and user friendly financial services with a particular view to assist the struggling
success of small and medium scale enterprises sector in Ethiopia.

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4.2.3 The Important Aspects for Business Venture Success

Figure.4.3 important aspects for business venture;-

Business Training in business

Opportunities, 27% skills, 19.8%

1st training
2nd Entrepreneuiral
3rd Business
4th Busines opp

Entrepreneurial
Business plan, 40.2% team, 13%

Source:- own survey, 2018

As it can be seen from the figure above, 37(40.2%) of the respondents indicated that a business plan is
important for the success of their business ventures, 12(13%) of the respondents all to the fact that the
availability of entrepreneurial team is important for the success of their business ventures, 25(27%), of a
respondents alluded to the fact that an business opportunity is essential for the success of their business ventures
and 18(19.8%) of the respondents concluded that training in business skills is important for the success of their
business ventures. The closer analysis of the result leads to the conclusion that a business plan is the most
important aspects for the success of any business venture.
According Renee (2007) (A) sound business plan may make a difference between a business that succeeds
and a business that fails. Approximately 90% of small business fails before two years, according to the small
business association. And even after that two year mark has been passed there are no guarantees. This is mainly
due to lack of business plan knowledge and absence of business of a business plan. Thais shaows that, they have
no business plan to run their business activities. A lack of business plan is one of the most often cited reasons by
author, such as Renee (2007), for problems in developing and growing a venture and one of the main causes of
business failure. A good business plan is not only important in developing the opportunity but also essential in
determining the resources required, obtaining those resources, and successfully managing the resulting venture.
Taking this into consideration, SMSEs sector should therefore ensure that they equip their employees with the
necessary business plan skills.
Moreover, the availability of an entrepreneurial team and business opportunities are also important aspects
for the success of business venture. Because an entrepreneurial team is necessary to implement the business’
objectives as outlined in the business plan. The business plan is a framework which a business must operate
within. It will ultimately determine whether the business performance is good or bad. For management or
entrepreneurs seeking external support, the plan is the most important sales document that they are every likely
to produce.
According to the interview result, majority of the interviewee pointed that they have no business plan to run
their business activities. A lack of business plan is one of the most often cited reasons by author, such as Renee
(2007) for problems in developing and growing a venture and one of the main causes of business failure. A good
business plan is not only important in developing the opportunity but also essential in determining the resources
required, obtaining those resource and successfully managing the resulting venture. Taking this into
consideration success of small and medium scale enterprises sector should therefore ensure that they equip their
employees with the necessary business plan skills.

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4.3. Determinants of Entrepreneurial Success of Small and Medium Scale Enterprises operating in
Wolkite
4.3.1. External Factors Determining Entrepreneurial Success of Small and Medium Scale Enterprises
operating in Wolkite
Respondents were asked different questions regarding the determinants of entrepreneurial success of small and
medium scale enterprises in Wolkite. Their responses are organized in the following manner.
Table 4.1: External Factors affecting the success of SMSEs Entrepreneurs operating in Wolkite town
External Descriptive Statistics
factors
affecting the
success of
SMSEs
Items Frequency Mean Std.
dev
Politico-legal factors

Strongly agree
Stro/Disagree

undecided
Disagree

Agree
Lack of government support 3 11 5 54 19 3.82 1.00
Bureaucracy in company registration 4 10 5 53 20 3.82 1.03
and licensing
Political intervention 4 10 5 55 18 3.79 1.02
Mean of mean for Politico-legal that affect 3.81 1.01
Lack of appropriate machinery and 4 11 4 59 14 3.73 1.00
equipment
Technological

Lack of money to acquire new 4 10 4 59 15 3.77 .99

technology
Unable to select proper technology 4 12 4 58 14 3.71 1.01
factors

Lack of skills to handle new technology 4 13 4 57 14 3.69 1.03

Lack of technology access 4 12 6 55 15 3.70 1.03
Mean of mean for Technological factors 3.72 1.01
In sufficient and interrupted water supply 4 10 4 58 16 3.78 1.00
Power interruptions 4 10 4 57 17 3.79 1.01
Infrastructural

Lack of business development services 4 11 4 58 15 3.75 1.01

Lack of sufficient and quick 4 12 4 57 15 3.72 1.02
transportation service
factors

Lack of appropriate dry waste and 4 10 4 60 14 3.76 .98

sewerage system
Mean of mean for Infrastructural factors 3.76 1.00
Poor customer relationship and handling 92 4 16 3 56 13 3.63
Searching new market is so difficult 92 4 15 3 56 14 3.66
Marketing

Inadequate market for my product 92 4 14 3 57 14 3.68

factors

Lack of demand forecasting 92 4 16 3 55 14 3.64

Lack of market information 92 4 14 3 57 14 3.68
Mean of mean for Marketing factors 3.66 1.05
Shortage of working capital 4 11 3 59 15 3.76 1.00
Financial factors

Inadequacy of credit institutions 4 12 3 59 14 3.72 1.01

Lack of cash management skills 4 14 3 57 14 3.68 1.04
High collateral requirement from banks 4 11 3 59 15 3.76 1.00
and other lending institutions
High interest rate charged by banks and 4 11 3 59 15 3.76 1.00
other lending institutions
Mean of mean Financial factors 3.73 1.01
Lack of knowledge for enterprises 4 12 3 57 15 4.18 4.42
-

Lack of motivation and promotion for 4 14 3 57 14 3.68 1.04

enterprises
cultural
factors

Lack of trust enterprises for 4 14 3 57 13 3.67 1.04

Socio

developments
Socio cultural factors Mean of mean 3.84 2.16
Source: own survey 2018
There are a number of determinants of entrepreneurial success of small and medium scale enterprises. This

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part explains the descriptive statistics calculated on the basis of the determinants of entrepreneurial success of
small and medium scale enterprises. The results for the extent was measured on a liker scale of 1-5 where 5 to
strongly agree extent 4 agree 3 undecided 2 disagree 1 strongly disagree and 1 no extent 1.1.5 strongly disagree
1.6-2.5 disagree 2.6-3.5 undecided 3.6-4.5 agree 4.6-5.0 strongly agree central tendency and dispersion were
obtained from the sample of respondents of construction, manufacture; services, trade and agriculture are shown
in the following tables.
4.3.1.1. Factors affecting success of SMSEs operating in Wolkite from Politico-legal factors perspectives
As it is indicated in table above in table above, the mean and standard deviation for the politico- legal factors
were calculated. The table shows the bureaucracy in company registration and licensing has the respondent
73(79.4) indicated about agree and strongly agree and 14(15.3%) respondent say indicated disagree and strongly
agree and remaining other 5(5.4%) respondent say undecided and bureaucracy in company registration and
licensing has a mean score of 3.81 indicated they agree the factors of small and medium enterprises and Politico-
legal that affect success of small and medium scale enterprises in wolkite show the respondent result. Therefore
it may be concluded in based on the result that bureaucracy in company registration licensing and Lack of
government support is the main factor that affect the of small and medium scale enterprises.
According to the table 4.1 above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, the Lack of government support on their business is not reasonable. On the Lack of
government support is justified by the calculated means of 3.82, 3.82, 3.79, and the shows agree that affects
small and medium scale enterprises.
The interviewees are pointed out the implementation problems widely observed in the side of the heads and
lower level experts and employees of government sector offices such as lack of responsiveness to the demands of
the operators. This arises either from the deliberate partiality of the executives to be bureaucratic or their lack of
awareness about the strange procedures and that support small and medium scale enterprises. The other possible
explaining factor for this non-responsiveness to the operators can be the fact that the concerned governments
offices are overburdened with other routine opportunities have been created; success of small and medium scale
enterprises have not been able to draw the full advantage due to absence of appropriate policy support.
According to interviewees, there still exists an overly bureaucratic government system that often results in
unnecessary delays in compliance and is excessively costly. This includes a complex system, lengthy procedures
and rules. For example, registration of a business, getting working places, payment of stamp duty among others.
For enterprises found in Wolkite, this poses a major challenge and cost as the owners of the business would need
to close for days in order to travel to concerned governmental offices to access these services sometimes without
success. Operators believe that these requirements force enterprises to operate informally, which greatly limits
their opportunities for growth, or to go out of business.
The Ethiopian government released the country’s first SMSEs development strategy in November 1997 E.C.
The primary objective of the national strategy framework is to create an enabling environment for SMSEs. In
addition to this basic objective of the national SMSE strategy framework, the MoTI (Ministry of Trade and
Industry) has developed a specific objective which includes, facilitating economic growth and bring about
equitable development, creating long-term jobs, strengthening cooperation between SMSEs, providing the basis
for medium and large scale enterprises, promoting export, and balancing preferential treatment between SMSEs
and bigger enterprises MoTI, (1997). The strategy outlines the policy framework and the institutional
environment for promoting and fostering the development of SMSEs and stimulating the entrepreneurial drive in
the country.
4.3.1.2. Factors affecting success of SMSEs operating in Wolkite from Technological factors perspectives
As it is indicated in table above, the mean and standard deviation for the lack of money acquire new technology
were calculated. The table shows lack of money acquires new technology high has the respondent 58(64) are
agree and 15(15.2) strongly agree responded and other remaining responder say strongly disagree and disagree
15(16.3%) so that there indicated has a mean score of 3.77 and lack of factor appropriate machinery and
equipment been calculated. The table shows high has a mean score of 3.73 and the able to select proper
technology were calculated. The table shows a mean score 3.71 and lack of skills to handle new technology were
calculated. The table shows a mean score 3.69 and the lack of technology access been calculated, the table shows
has a mean 3.706. There for it may be concluded that lack of money to acquire new technology and the lack of
appropriate machinery and equipment are the main factor that affect the success of entrepreneurial success of
small and medium scale enterprises. The studied success of small and medium scale enterprises a variety of
working machines, equipments and tools, most of which were purchased.
According to the interview with the operators, the loan to purchase equipments and materials were obtained
from both formal and informal sources. Welding machine, singer, grinder, stove, drill machine, screw driver,
hammer, chisel and clamps are some of the work related machines and equipments owned by the studied success
of small and medium scale enterprises. The operators indicated that the presence of these machines, tools and
equipments has allowed the operators to produce products. In contrast to this, according to some interviewees of

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manufacture sector, they lack money to acquire new technology (equipment, machinery, tools, etc). Moreover,
respondents replied that, if new and appropriate technologies obtained, the presence of them would be result in
performance improvement
4.3.1.3. Factors affecting success of SMSEs operating in Wolkite from Infrastructural factors perspectives
As it is indicated in table above, the mean and standard deviation for the Infrastructural factors affecting that the
success of small and medium scale enterprises were calculated. The table shows in sufficient and interrupted
water supply has mean score 3.78 with a standard deviation of 1.003, power interruption has mean score 3.79
with a standard deviation of 1.012 and lack of appropriate dry waste and sewerage system factors the respondent
58(63.04%) agree and 16(17.4) strongly agree the other remaining strongly disagree and disagree 14(15.2%)
responded they also there has mean score 3.76 with a standard deviation of 0.987. There for it may be concluded
that in sufficient and interrupted water supply and power interruption is the main factor that affect the success of
small and medium scale enterprises.
According to the table 4.1. Above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, in sufficient and interrupted water supply, power interruption and lack of appropriate dry
waste and sewerage system factors are affect success of small and medium scale enterprises.
Accessibility of a location is the ease with which it can be accessed by different modes of transport Brown
and Lloyd, (2002). Divergent from these aspects, however, most of the studied area is situated far from the main
asphalt road and the condition of the road leading to the cluster from the main road is extremely poor. This poor
state of the road condition of locality has culminated in high transportation service costs to the success of small
and medium scale enterprises, in addition to making the sector difficult for accessibility by the existing and
potential customers. Concerning transport facilities, access to affordable and appropriate public transport is of
paramount vitality in expanding the employment opportunities of the urban poor who need inexpensive access to
areas of economic and commercial activity. Equally, the importance of physical capital especially infrastructure
in enabling people to access, and directly support, income-generating activities is well recognized by writers on
urban livelihoods such as Rakodi (2002).
4.3.1.4. Factors affecting success of SMSEs operating in Wolkite from Marketing factors perspectives
As it is indicated in table above in table above, the mean and standard deviation for the marketing factors were
calculated. The table shows the inadequate market for my product has mean score 3.68 with a standard deviation
1.04 and lack of market information has mean score 3.68 with a standard deviation 1.04. Therefore it may be
concluded that inadequate market for my product and lack of market information is the main factor that affect
the of the success of small and medium scale enterprises.
According to the table 4 above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, the Lack of government support on their business are responded. On the inadequate market for
my product and lack of market information factors that affects the success of small and medium scale enterprises.
In an interview conducted with an operator of the sectors, it was confirmed that absence of selling place has
aggravated the already existing ‘inadequacy and crowdedness’ of the internal working space of the shades. The
operators intelligently argued that lack of selling place is a direct contributor for their inadequate market hence
low income of the studied success of small and medium scale enterprises. Absence of selling place obviously
narrows the chance to access new customers. The recently price ceiling on commodities by the government of
Ethiopia is warmly welcomed by the respondents. The operators indicated that the continuously increasing price
of inputs has been checked by the government action. They also indicated that the materialization of this ceiling
has also saved them from being ‘exploited’ by illegal merchants, who always increase prices of basic
commodities unreasonably.
On the other hand, however, currently the owner managers attributed the sky rocketing price of
commodities to the shortage or inadequacy of supply of commodities. Brilliantly enough, one respondent linked
the issue with population increase. This is true since when there is an ample demand for a given goods or
services, in this case higher population; it is likely that the price of that goods or services becomes high. Roy and
Wheeler (2006) identified that the level of training of micro entrepreneurs (both formal and informal);
experience and number of years in operation; knowledge of the market; level of differentiation (in terms of price,
quality or other) and diversification of products; access to the necessary resources and/or technologies; level of
planning; vision for the future; and the entrepreneur’s level of poverty are among the factors contributing to
success of SMSEs while lack of market knowledge and training, limited access to capital, and lack of co-
operation among possible business partners are some of the factors inhibiting the growth and development of the
micro enterprise sector.
4.3.1.5. Factors affecting success of SMSEs operating in Wolkite from from Financial factors perspectives
As it is indicated in table above, the mean and standard deviation for the financial factors were calculated. The
table shows the shortage of working capital, high collateral requirement from banks and other lending
institutions and high interest rate charged by banks and other lending institutions the respondents 59(63.68%)
agree and 15(15.86%) strongly agree also inadequacy of credit institutions 92 respondents are say the high

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factors affect the success of small and medium scale enterprises. Therefore it may be concluded that financial
factors is main factor that affect the success of small and medium scale enterprises.
According to the table 4.1 above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, the shortage of working capital, high collateral requirement from banks and other lending
institutions and high interest rate charged by banks and other lending institutions and also inadequacy of credit
institutions is factors that affect the success of small and medium scale enterprises.
According to Rakodi (2002) financial issues are more salient in urban areas due to the highly monetized
nature of urban economies. Operators were interviewed to give their opinion on the nature of problem related to
financial factors. It was found that, mainly ensuing from low market, the operators usually suffer of shortage of
cash leading to their inability to cover their daily needs adequately. The other cause of this low cash presence at
the disposal of the operators could be the increasing expense incurred by their respective success of small and
medium scale enterprises in relation to purchase of raw materials and services such as transportation, in addition
to cost of utilities consumed both at home and work place. The operators frequently mitigate this problem of
cash shortage through borrowing and lending each other. The other mechanism of easing such cash shortage is
through diversification of income generating activities. Even if many writers including Vandenberg support the
already established opinion on micro-finance that holds a view that micro-finance is a useful way of channeling
finance to the poor and overcoming the difficulties they face in securing credit from formal financial institutions
such as Banks (Vandenberg, 2006). It was reported that the terms of credit of Wolkite MFI are not suitable to the
operators as the MFI fixes short repayment period with higher interest rate that is 9% in comparison with the
interest rate of 6% charged by the banks. Majority of respondents indicated that, MFI charges them totally 12%
of the extended credit, of which 9% is paid as interest on the loan, 3% as service charge. This high loan cost puts
the affordability of the loan of the MFI demanding by the users. Obviously, such high loan cost further damages
the already low meager revenue of the enterprises. On the other hand, the interviewees’ pointed that the short
repayment period scheduled by the MFI put them in worrisome state as they face shortage of market resulting in
their inability to repay the loan with in the period stipulated by the MFI. Given the market problem of the
success of small and medium scale enterprises, it is fair to suggest the MFI to effectuate a ‘grace period policy’.
Majority of interviewees widely outlined that, they are frequently uses informal sources as a main sources.
According to them, this is because of the view that the requirement of collateral and loan application procedures
are relatively rare (completely none) in case of informal sources. Since such sources usually take place among
parties with intimate knowledge and trust of each other, making the need for security (in the form of asset
collateral/guarantee) low.
4.3.1.6. Factors affecting success of SMSEs operating in Wolkite from Socio- cultural factors perspectives
As it is indicated in table above 4.9, the mean and standard deviation for the socio- cultural factors were
calculated. The table shows the lack of knowledge for enterprises and lack of motivation and promotion for
enterprises and lack of trust enterprises for developments 92 respondents are 57(62%) agree and 14(15.64%)
strongly agree the other remaining are 4(4.3%) strongly disagree and 14(14.47%)are disagree say agree that
factors affect the success of small and medium scale enterprises. Therefore it may be concluded that socio-
cultural factors is main factor that affect the success of small and medium scale enterprises.
According to the table 4 Above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, the lack of knowledge for enterprises and lack of motivation and promotion for enterprises
and lack of trust enterprises for developments is factors that affect the success of small and medium scale
enterprises.
Table 10. among the different factors attributed to entrepreneurial success for small and medium scale
enterprises operating in wolkite, please rank the following variables in their order of attributes for
entrepreneurial success (1= highest factors attributed for success and 9= for the least factors attributed for
entrepreneurial success in wolkite.
According to HLCLEP (2006), there is lack of entrepreneurial and managerial skills, which in turn leads to
problems in production due to the unfamiliarity of workers with rapid changing technology, lack of coordination
of production process and inability to troubleshoot failures on machinery and/or equipments is a critical problem
that MSEs are facing since they cannot afford to employ specialists in the fields of planning, finance and
administration, quality control and those with technical knowledge.

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4.3.2. Internal Factors affecting success of SMSEs operating in Wolkite

Table 4.2. Internal Factors affecting SMSE’s operating in Wolkite
Internal ITEMS Mean Std.dev

undecided
Factors

Disagree

Disagree
Strongly

Strongly
Agree

agree
affecting
SMSE’s

The rent of house is too high 11 4 54 19 3.79 1.04

4
working

factors
place

Absence of own premises 4 11 4 59 14 3.74 1.00

Current working place is not 4 11 4 55 18 3.78 1.03
convenient
Mean of mean for working place factors 3.77
Lack of information to exploit 4 12 3 58 15 3.73 1.02
business opportunities
Entrepreneurial

Lack of persistence and courage to 4 12 3 58 15 3.73 1.02

factors

take responsibility for ones failure

Lack of motivation and drive 4 12 3 59 14 3.72 1.01
Lack of tolerance to work hard 4 13 3 58 14 3.70 1.03
Absence of initiative to assess ones 4 13 3 58 14 3.70 1.03
strengths and weakness
Mean of mean Entrepreneurial factors 3.71 1.02
Poor organization and ineffective 4 16 3 56 13 3.66 1.06
Management

communication
factors

Lack of well trained and experienced 4 15 3 56 14 3.63 1.06

employees
Lack of clear division of duties and 4 14 3 55 14 3.60 1.07
responsibility among employees
Mean of mean Management factors 3.63 1.06
Source: own survey, 2018
4.3.2.1 Factors affecting success of SMSEs operating in Wolkite from Management factors perspectives
As the above table the management factors that affects the success of small and medium scale enterprises 92
respondents mean score 3.68 with a standard deviation 1.04 say agree and to show that a challenge manager
raises poor organization and ineffective communication and lack of well trained and experienced employees are
affect the success of small and medium enterprises.
According to the management factors that affect the success o small and medium scale enterprises the poor
organization and ineffective communication, the lack of well trained and experienced employees and lack of
clear division of duties and responsibility among employees. Regarding the respondents say management factors
that affect the success small and medium scale enterprises. It is argued from a theoretical perspective that
management experience and continuous training provide a particular entrepreneur with the necessary skills and
competences needed for successful entrepreneurship Enock N., (2010). With adequate education mixed with
management experience and training puts a manager in a better position to make tough decisions and forecasting
under conditions of uncertainty which in turn with those competencies making these particular managers
perform better than inexperienced individuals.
In this regard in an interview conducted with operators’ success of small and medium scale enterprises, it
was confirmed that they had many management problems which stem from factors such as poor record keeping,
insufficient training and lack of relevant qualifications. Furthermore, most of these enterprises operate without
systems in line with good management practice in which the owner manager is the sole decision maker and
his/her absence leads to a halt (temporarily stop) in decision making. Similarly, interviewees commonly
indicated that, inability (low technical skills) to troubleshoot failures on machinery and/or equipment’s is a
critical problem. Since the operators of success of small and medium scale enterprises cannot afford to employ
specialists in the fields of maintenance with technical knowledge.
4.3.2.2 Factors affecting success of SMSEs operating in Wolkite from Entrepreneurial factors perspectives
As it is indicated in table above, the mean and standard deviation for the Entrepreneurial factors that affect small
and medium scale enterprises were calculated. The table shows the lack of information to exploit business
opportunities, lack of persistence and courage to take responsibility for ones failure and lack of motivation and
drive the respondent 58(63.22) agree and 15(15.64) strongly agree the other remaining respondent are 4(4.3%)

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strongly and 12(13.44) disagree that has mean score 3.739 with a standard deviation 1.025 and lack of tolerance
to work hard and absence of initiative to assess ones strengths and weakness the has mean score 3.7065 with a
standard deviation of 1.032 is the respondents say agree the factors that affects the success of small and medium
scale enterprises.
According to the table 4.8. above, enterprises engaged in construction, manufacture, services, trade and
agriculture sector, the lack of persistence and courage to take responsibility for one’s failure and lack of
motivation and drive and lack of tolerance to work hard and absence of initiative to assess ones strengths and
weakness is factors that affects the success of small and medium scale enterprises.
Starting with lack of motivation and drive, this has to do with the main reason(s) for the entrepreneur(s)
establishing the business and the relationship of this with the performance of the firm Enock (2010). In an
interview conducted with an operator of success of small and medium scale enterprises, few (two) interviewees
replied that lack of motivation and drive affect the success of small and medium scale enterprises. Even though
the results in this study show only two operators whose business is constrained by lack of motivation and drive,
it has been proven that this is a major constraint to many small business owners. A study by Bark Ham shows a
positive relation between motivation of the entrepreneur(s) and the performance of the firm; in other words the
more positive motivation of the entrepreneur(s) the more likely the business will grow Bark H. R., (1992). Lack
of entrepreneurial training was mentioned by operators in the entire study area. According to interviewees, it
featured as a key problem in all sectors. A number of interviewee respondent felt that enough training in
entrepreneurship would better prepare to perform in their business activities. Furthermore, with regard to lack of
information to exploit business opportunities interview was conducted with operators of small and medium scale
enterprises.
4.3.2.3. Factors affecting success of SMSEs operating in Wolkite from working place factors perspectives
As it is indicated in table above in table above, the mean and standard deviation for the working place factors
was the respondent. The table shows the rent of house is most respondent 54(58.7%) say agree and 19(20.7%)
strongly agree the other remaining are say strongly disagree, disagree and undecided too high has a mean score
of 3.77 with a standard deviation of 1.027 and absence of own premises for has mean 3.74 with a standard
deviation of 1.004 and current working place is not convenient has mean score 3.78 with standard deviation of
1.03. Therefore it may be concluded that absence of own premises, current working place is not convenient and
the rent of house is too high the main factor that affect the success of entrepreneurial success of small and
medium scale enterprises.
In an interview conducted with an operator of construction, manufacture, services, trades and agriculture it
was confirmed that, they operated in rented house and high rental charges have impeded the factors affects of
their businesses as some charges are higher than the capacity to pay. According to them, this high rent of house
is resulted from absence of own premises to run business.
Accessibility of a location is the ease with which it can be accessed by different modes of transport Brown
and Lloyd, (2002). Divergent from these aspects, however, most of the studied area is situated far from the main
asphalt road and the condition of the road leading to the cluster from the main road is extremely poor. This poor
state of the road condition of locality has culminated in high transportation service costs to the SMSEs, in
addition to making the sector difficult for accessibility by the presented and potential customers. In an interview
conducted with an operator of food processing it was confirmed that, they operated in rented house and high
rental charges have impeded the performance of their businesses as some charges are higher than the capacity to
pay. Similarly, in an interview conducted with owner managers of textile and garment was confirmed this idea.
According to them, this high rent of house is resulted from absence of own premises to run business.

4.4. Comparison of Factors affecting the success of SMSE’s entrepreneurs operating in Wolite
Even though, the entire politico-legal, infrastructure, working premises, technology, marketing, financial,
management entrepreneurial and socio-cultural factors affect the success of SMSEs, this does not necessarily
mean that all factors have equal impact.
The following table clearly compares the overall impact of all key factors discussed in detail above.

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Table 4.3: Comparison of Factors affecting the success of SMSE’s entrepreneurs operating in Wolite
Descriptive Statistics N frequency Mea Std.

St/Disagree

undecided
Disagree

St/Agree
Agree
Politico-Legal Factors 92 7 2 15 59 9 3.66 .963
Working Place Factors 92 7 2 13 62 8 3.67 .950
Technological Factors 92 7 3 15 58 9 3.64 .978
Infrastructural factors 92 8 2 15 59 8 3.61 .992
Marketing Factors 92 8 3 15 57 9 3.60 1.015
Financial Factors 92 9 3 12 59 9 3.60 1.047
Management Factors 92 9 3 11 60 9 3.61 1.046
Entrepreneurial factors 92 9 5 11 58 9 3.57 1.071
socio-cultural factor 92 9 5 12 56 1 3.89 3.349
Mean of Mean 3.65 1.268
Source: own survey, 2018
It can now be seen that financial and working premises factors has the biggest potential to contribute to the
performance, followed by marketing, infrastructural, management, politico-legal, technological, entrepreneurial
and socio –cultural factors. In another words, the result shows that financial and working premises factors are the
two highest factors that affect the performance of SMSEs in the selected area. This result is supported by Haftu
Berihun (2009) who found that lack of finance and working space rank on top being reported as the major
constraints by a large proportion of the enterprises. It can, therefore, be concluded that finance and working
premises factors do largely affect the success of SMSEs.
The respondents to respond each factors attribute their entrepreneurial success please rank the above
variables in their order of attributes for entrepreneurial success (1= highest factors attributed for success and 9=
for the least factors attributed for entrepreneurial success in wolkite).

CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 INTRODUCTION
In this chapter the conclusions and recommendations are discussed. For clarity purpose, the conclusions are
based on the research objectives of the study. Based on the findings of the study recommendations are made to
government bodies, to operators of SMSEs and suggestion for other researchers.

5.2 SUMMARY OF MAJOR FINDING

The study covers five sectors that identified by Wolikte SMSEs development office and identifies the major
factors toward the success of SMSEs by considering five sectors.
SMSE in Wolkite is dominated by construction sector and SMSE in Wolkite manufacturing is
employment and capital growth service shows better achievements than others.
As a source of finance majority of the respondents start their business by their own personal saving and
friends.
SMSE that starts its business from personal saving source of finance shows greater mean value of
success indicators than sources.
Majority of the respondents starts a business by holding a motive of creating job and they are relatively
success full than others.
The majority of respondents the content of their business plan are without the basic elements of
financial, human resource and sales plan.
The likert-scale response result shows that more than half sampled enterprise agreed on significant
impact of access to finance and credit service, politico-legal, social-cultural, working place factors,
technological factors, management, marketing, infrastructural, and entrepreneurial factors.

5.3 CONCLUSIONS
Small And Medium Scale Enterprises to investigate contextual factors, to assess the internal factors and to
recommend possible solution to alleviate the problem of SMSEs. Based on the objectives and findings of the
study, the following conclusions are worth drawn.
The social- cultural factors, working place factors and technological factors are to show about result of

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the research data the major factors on entrepreneurship in internal and external attribute.
The other factors to starting businesses enterprises main sources of startup and expansion finance or
funds for most SMSEs are personal savings followed, family, friends/relatives and iqub/idir,.
The formal financial institutions have not been able to meet the credit needs of the SMSEs.
There is high interest rate and collateral requirement; most SMSEs have been forced to use the informal
institutions for credit. But the supply of credit from the informal institutions is often so limited to meet
the credit needs of the SMSEs. In some cases this problems may be the inability of many operators to
meet formal financial institutions requirements for example business plan, governance systems and
other accountability issues which are linked to business risk.
This shows that the studied operators accessed finance mainly from informal sources. The most important
contextual factors identified are financial factors which include high collateral requirement from banks and other
lending institutions, shortage of working capital, high interest rate charged by banks and other lending
institutions, and too complicated loan application procedures of banks and other lending institutions. The social-
cultural factors, working place factors and technological factors are to show about result of the research data the
major factors on entrepreneurship in internal and external attribute and Infrastructural factors incorporate power
interruptions, and lack of sufficient and quick transportation service that hinder the business performance of all
sectors.
Finally, the study has further identified that the different influences in which each of the factors under study
have in different categories of the business. The research clearly illustrates that, even if the degree of those
critical factors in construction, manufacture, services, trade and agriculture sector slightly differ from the factors
that are critical to work sectors, most of the factors are considerably common for five sectors. It has been noted
that the contextual factors are prevalent to the businesses such as Politico-Legal, financial, workings premises,
marketing and infrastructure had very high effects on the success of SMSEs compared to other factors in the
research area.

5.4 RECOMMENDATIONS
Suggestions for corrective and complementary measures to enhance the potential success of small and medium
scale enterprises /SMSEs/ are essential. Such recommendations demand an in-depth analysis of the influence of
different factors regarding the sector. Based on the findings and conclusions of the study, the following
recommendations are forwarded.
To address the issue of business development services the trade and industry office has to organize and
facilitate marketing promotional programs like trade fairs and bazaars this will give SMSEs opportunity
to display their market share, exchange experiences, knowledge transfer as to how to utilize marketing
instruments so on.
Enterprises operating without business plan are advised to prepare business plan. Government bodies
and partners of the enterprises had better convince and aid such enterprises to prepare business plan.
In relation to improving the entrepreneurial, traits of the owner/manager of SMSEs higher education
institutions and enterprises supporting body is advised to review and design responsive, and country
context training on entrepreneurship.
Linking SMSEs with medium and large firms to serve as market outlets, provision of training on quality
improvement and cost reduction modalities, provision of information on market opportunities,
construction of display centers and provision of advertising support and establishment of market
information centers are recommended activities that need the coordinated efforts of all concerned
stakeholders.
Policy makers are also advised to design polices that improve the facilities and skill development
programs of SMSEs establishing bodies.
An endeavor should be made to increase education level of operators or employees because it will lead
to increase the use of ICT. In turn, will increase market linkage and produced products that conform the
quality specifications and interest of customers. So the concerned agency should give appropriate
training for the ranked skills and raise the capabilities of ICT users.
Changing the perception of the general public through extensive awareness creation mechanisms, since
private individuals are predicted to be the main buyers of the products manufactured by success of
small and medium scale enterprises in the long run.
Wolkite University to give awareness, short term training and business plan of small and medium scale
enterprises in a seller and buyers of the products manufactured in the long run promotion.
Finally yet importantly, time series data related with financial achievement is not available in organized
written form. However, it is crucial for success evaluation of the enterprises. The researchers observed
the absence of this data in organized written form. SMSEs of sales and profit achievements this will
help future researchers to have comprehensive measures of success indicators.

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Hart, K (2005). Formal Bureaucracy and the emergent forms of the informal economy.
Hart. G. P (1972). Some socio-economic aspects of African entrepreneurship. Occasional Paper No. 16,
Graham’s town: Rhodes University.
Herbert N. Nyaga, (2007). The role of Micro finance institutions in delivery of non-financial services to micro
and small enterprises, in Thika District Kenya, JKUAT.
ILO (1972). “Employment, incomes and equity: a strategy of increasing productive employment in Kenya.”
Geneva: International Labour Organization
Karuranga Egide and Daou Alain (2009). Success of SMEs in Emerging Economies: Propositions for Future
Research, Laval University, FSA.

WOLKITE UNIVERSITY
COLLEGE OF BUSINESS and Economics,
DEPARTMENT OF MANAGEMENT
MBA PROGRAM

QUESTIONNAIRE TO BE FILLED BY _______________________

Dear respondent,
Dear respondent the purpose of this research were Assessing the Determinants of Entrepreneurial Success of
Small and Medium Scale Enterprises in Wolkite town. You are one of the respondents selected to participate
on this study. Please assist us in giving correct and complete information to present a representative finding on
the current status of the determinants of entrepreneurial success of small and medium scale enterprises’ on the
wolkite. Your participation is entirely voluntary and the questionnaire is completely anonymous. Finally,
confirm you that the information you provided will be kept confidential and only used for the academic purpose.
No individual’s responses will be identified as such and the identity of persons responding will not be published
or released to anyone. All information will be used for academic purposes only. Thank you in advance for your
kind cooperation and dedicating your time.
Sincerely,

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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.22, 2018

Instructions
No need of writing your name
For Laker scale type statements and multiple choice questions indicate your answers with a check mark (√)
in the appropriate block.

SECTION 1: GENERAL INFORMATION ON BUSINESS ENTERPRISES

1. What is the main activity of the enterprise?
A. Textile and garment B. Food processing C. Wood and metal work
2. How did you raise funds to start-up your business?
A. Personal saving D. NGOs G. Micro finance institutions
B. Family E. Friends/Relatives H. Others (specify)-----------
C. Banks F. Iqub/Idir
3. Which one of the following aspect is the most important for the success of your business venture?
A. A business plan C. An entrepreneurial team
B. Business opportunities D. Training in business skills

SECTION 1: FACTORS AFFECTING THE PERFORMANCE OF MICRO AND SMALL

ENTERPRISES
The major factors that affect the performance of MSEs are listed below. Please indicate the degree to which
these factors are affecting the performance of your business enterprise. After you read each of the factors,
evaluate them in relation to your business and then put a tick mark (√) under the choices below. Where, 5 =
Strongly agree, 4 = Agree, 3 = Undecided, 2 = Disagree and 1= Strongly disagree. Hence, please indicate the
degree to which you agree with the following statements
S.No Variables Scale of Agreement
5 4 3 2 1
1 Politico-Legal Factors
1.1 Lack of government support
1.2 Bureaucracy in company registration and licensing
1.3 Political intervention
2 Working Place Factors 5 4 3 2 1
2.1 The rent of house is too high
2.2 Absence of own premises
2.3 Current working place is not convenient
3 Technological Factors 5 4 3 2 1
3.1 Lack of appropriate machinery and equipment
3.2 Lack of money to acquire new technology
3.3 Unable to select proper technology
3.4 Lack of skills to handle new technology
3.5 Lack of technology access
4 Infrastructural factors 5 4 3 2 1
4.1 Insufficient and interrupted water supply
4.2 Electric Power interruptions
4.3 Lack of business development services
4.4 Lack of sufficient and quick transportation service
4.5 Lack of appropriate dry waste and sewerage system
5 Marketing Factors 5 4 3 2 1
5.1 Poor customer relationship and handling
5.2 Searching new market is so difficult
5.3 Inadequate market for my product
54 Lack of demand forecasting
5.5 Lack of market information
6 Financial Factors 5 4 3 2 1
6.1 Shortage of working capital
6.2 Inadequacy of credit institutions
6.3 Lack of cash management skills
9.4 High collateral requirement from banks and other lending
institutions

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Vol.10, No.22, 2018

S.No Variables Scale of Agreement

5 4 3 2 1
6.5 High interest rate charged by banks and other lending
institutions
7 Management Factors 5 4 3 2 1
7.1 Poor organization and ineffective communication
7.2 Lack of well trained and experienced employees
7.3 Lack of clear division of duties and responsibility among
employees
8 Entrepreneurial Factors 5 4 3 2 1
8.1 Lack of information to exploit business opportunities
8.2 Lack of persistence and courage to take responsibility for ones
failure
8.3 Lack of motivation and drive
8.4 Lack of tolerance to work hard
8.5 Absence of initiative to assess ones strengths and weakness
9 Socio-cultural factors
9.1 Lack of knowledge for enterprises
9.2 Lack of motivation and promotion for enterprises
9.3 Lack of trust enterprises for developments

10. Among the different factors attributed to Entrepreneurial success for SMSEs operating in Wolkite,
please rank the following variables in their order of attributes for Entrepreneurial success (1=Highest
factors attributed for success and 9= for the least factors attributed for Entrepreneurial success in
Wolkite)
S.No Variables Rank based on their order of attributes for
Entrepreneurial success (1=Highest factors
attributed for success and 9= for the least factors
attributed for Entrepreneurial success in Wolkite

1 Politico-Legal Factors
2 Working Place Factors
3 Technological Factors
4 Infrastructural factors
5 Marketing Factors
6 Financial Factors /Economic factors
7 Management Factors
8 Entrepreneurial Factors
9 Socio-cultural factors

11. Among the different factors influencing entrepreneurs operating in Wolkite to create unemployment
intention, Please rank the following variables in their order of attributes for creating unemployment
intention
S.No Variables Rank based on their order of attributes for
Entrepreneurial success (1=Highest factors
attributed for creating unemployment intention
and 9= for the least factors attributed for creating
unemployment intention in Wolkite)
1 Politico-Legal Factors
2 Working Place Factors
3 Technological Factors
4 Infrastructural factors
5 Marketing Factors
6 Financial Factors /Economic factors
7 Management Factors
8 Entrepreneurial Factors
9 Socio-cultural factors

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Vol.10, No.22, 2018

Any Addition comments/suggestions to be

given ……………………………………………… ………………………………………………………………
………………………………………………………………………………………………………………………
………………….…………
Thank You

Frequency
Statistics
Bureaucracy in
Lack of company
government registration and Political
support licensing intervention
N Valid 92 92 92
Missing 0 0 0

plf1 Lack of government support

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 3 3.3 3.3 3.3
disagree 11 12.0 12.0 15.2
undecided 5 5.4 5.4 20.7
agree 54 58.7 58.7 79.3
strongly agree 19 20.7 20.7 100.0
Total 92 100.0 100.0

Frequency
plf2 Bureaucracy in company registration and licensing
Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 5 5.4 5.4 20.7
agree 53 57.6 57.6 78.3
strongly agree 20 21.7 21.7 100.0
Total 92 100.0 100.0

Frequency
plf3 Political intervention
Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 5 5.4 5.4 20.7
agree 55 59.8 59.8 80.4
strongly agree 18 19.6 19.6 100.0
Total 92 100.0 100.0

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Vol.10, No.22, 2018

wpf1 The rent of house is too high

Cumulative
Frequency Percent Valid Percent Percent
Valid Strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 4 4.3 4.3 20.7
agree 54 58.7 58.7 79.3
strongly agree 19 20.7 20.7 100.0
Total 92 100.0 100.0
Statistics
Current working
The rent of Absence of own place is not
house is too high premises convenient
N Valid 92 92 92
Missing 0 0 0

wpl2 Absence of own premises

Cumulative
Frequency Percent Valid Percent Percent

4 4.3 4.3 4.3

strongly disagree
Valid disagree 11 12.0 12.0 16.3
undecided 4 4.3 4.3 20.7
agree 59 64.1 64.1 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

wpf3 Current working place is not convenient

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly agree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 4 4.3 4.3 20.7
agree 55 59.8 59.8 80.4
strongly agree 18 19.6 19.6 100.0
Total 92 100.0 100.0

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Statistics
Lack of
appropriate Lack of money Unable to select Lack of skills to Lack of
machinery and to acquire new proper handle new technology
equipment technology technology technology access
N Valid 92 92 92 92 92
Missing 0 0 0 0 0

tf1 Lack of appropriate machinery and equipment

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
unecided 4 4.3 4.3 20.7
agree 59 64.1 64.1 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

tf2 Lack of money to acquire new technology

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 4 4.3 4.3 19.6
agree 59 64.1 64.1 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

tf3 Unable to select proper technology

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 4 4.3 4.3 21.7
agree 58 63.0 63.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

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tf4 Lack of skills to handle new technology

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly agree 4 4.3 4.3 4.3
disagree 13 14.1 14.1 18.5
undecided 4 4.3 4.3 22.8
agree 57 62.0 62.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

tf5 Lack of technology access

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 6 6.5 6.5 23.9
agree 55 59.8 59.8 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

Statistics
Lack of
sufficient and Lack of
In sufficient and Lack of business quick appropriate dry
interrupted water Power development transportation waste and
supply interruptions services service sewerage system
N Valid 92 92 92 92 92
Missing 0 0 0 0 0

if1 In sufficient and interrupted water supply

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 4 4.3 4.3 19.6
agree 58 63.0 63.0 82.6
strongly agree 16 17.4 17.4 100.0
Total 92 100.0 100.0

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Vol.10, No.22, 2018

if2 Power interruptions

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 4 4.3 4.3 19.6
agree 57 62.0 62.0 81.5
strongly agree 17 18.5 18.5 100.0
Total 92 100.0 100.0

if3 Lack of business development services

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 4 4.3 4.3 20.7
agree 58 63.0 63.0 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

if4 Lack of sufficient and quick transportation service

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 4 4.3 4.3 21.7
agree 57 62.0 62.0 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

if5 Lack of appropriate dry waste and sewerage system

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 10 10.9 10.9 15.2
undecided 4 4.3 4.3 19.6
agree 60 65.2 65.2 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

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Statistics
Poor customer Searching new Inadequate
relationship and market is so market for my Lack of demand Lack of market
handling difficult product forecasting information
N Valid 92 92 92 92 92
Missing 0 0 0 0 0

mf1 Poor customer relationship and handling

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 16 17.4 17.4 21.7
undecided 3 3.3 3.3 25.0
agree 56 60.9 60.9 85.9
strongly agree 13 14.1 14.1 100.0
Total 92 100.0 100.0

mf2 Searching new market is so difficult

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 15 16.3 16.3 20.7
undecided 3 3.3 3.3 23.9
agree 56 60.9 60.9 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

mf3 Inadequate market for my product

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 14 15.2 15.2 19.6
undecided 3 3.3 3.3 22.8
agree 57 62.0 62.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

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Vol.10, No.22, 2018

mf4 Lack of demand forecasting

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 16 17.4 17.4 21.7
undecided 3 3.3 3.3 25.0
agree 55 59.8 59.8 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

mf5 Lack of market information

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 14 15.2 15.2 19.6
undecided 3 3.3 3.3 22.8
agree 57 62.0 62.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

Statistics
High collateral High interest
requirement rate charged by
Inadequacy of Lack of cash from banks and banks and other
Shortage of credit management other lending lending
working capital institutions skills institutions institutions
N Valid 92 92 92 92 92
Missing 0 0 0 0 0

ff1 Shortage of working capital

Cumulative
Frequency Percent Valid Percent Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 3 3.3 3.3 19.6
agree 59 64.1 64.1 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

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Vol.10, No.22, 2018

ff2 Inadequacy of credit institutions

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 3 3.3 3.3 20.7
agree 59 64.1 64.1 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

ff3 Lack of cash management skills

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 14 15.2 15.2 19.6
undecided 3 3.3 3.3 22.8
agree 57 62.0 62.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

ff4 High collateral requirement from banks and other lending institutions
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 3 3.3 3.3 19.6
agree 59 64.1 64.1 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

ff5 High interest rate charged by banks and other lending institutions
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 11 12.0 12.0 16.3
undecided 3 3.3 3.3 19.6
agree 59 64.1 64.1 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

Statistics
Poor organization and Lack of clear division of
ineffective Lack of well trained and duties and responsibility
communication experienced employees among employees
N Valid 92 92 92
Missing 0 0 0

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Vol.10, No.22, 2018

maf1 Poor organization and ineffective communication

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 15 16.3 16.3 20.7
undecided 3 3.3 3.3 23.9
agree 56 60.9 60.9 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

maf2 Lack of well trained and experienced employees

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 16 17.4 17.4 21.7
undecided 3 3.3 3.3 25.0
agree 56 60.9 60.9 85.9
strongly agree 13 14.1 14.1 100.0
Total 92 100.0 100.0

maf3 Lack of clear division of duties and responsibility among employees

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 17 18.5 18.5 22.8
undecided 3 3.3 3.3 26.1
agree 55 59.8 59.8 85.9
strongly agree 13 14.1 14.1 100.0
Total 92 100.0 100.0

Statistics
Lack of Absence of
Lack of persistence and initiative to
information to courage to take Lack of assess ones
exploit business responsibility for motivation and Lack of tolerance strengths and
opportunities ones failure drive to work hard weakness
N Valid 92 92 92 92 92
Missing 0 0 0 0 0

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ef1 Lack of information to exploit business opportunities

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 3 3.3 3.3 20.7
agree 58 63.0 63.0 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

ef2 Lack of persistence and courage to take responsibility for ones failure
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 3 3.3 3.3 20.7
agree 58 63.0 63.0 83.7
strongly agree 15 16.3 16.3 100.0
Total 92 100.0 100.0

ef3 Lack of motivation and drive

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 3 3.3 3.3 20.7
agree 59 64.1 64.1 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

ef4 Lack of tolerance to work hard

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 13 14.1 14.1 18.5
undecided 3 3.3 3.3 21.7
agree 58 63.0 63.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

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Vol.10, No.22, 2018

ef5 Absence of initiative to assess ones strengths and weakness

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 13 14.1 14.1 18.5
undecided 3 3.3 3.3 21.7
agree 58 63.0 63.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

Statistics
Lack of knowledge for Lack of motivation and promotion Lack of trust enterprises for
enterprises for enterprises developments of
N Valid 92 92 91
Missing 0 0 1

scf1 Lack of knowledge for enterprises

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 12 13.0 13.0 17.4
undecided 3 3.3 3.3 20.7
agree 57 62.0 62.0 82.6
strongly agree 15 16.3 16.3 98.9
45 1 1.1 1.1 100.0
Total 92 100.0 100.0

scf2 Lack of motivation and promotion for enterprises

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.3 4.3
disagree 14 15.2 15.2 19.6
undecided 3 3.3 3.3 22.8
agree 57 62.0 62.0 84.8
strongly agree 14 15.2 15.2 100.0
Total 92 100.0 100.0

scf3 Lack of trust enterprises for developments of

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 4 4.3 4.4 4.4
disagree 14 15.2 15.4 19.8
undecided 3 3.3 3.3 23.1
agree 57 62.0 62.6 85.7
strongly agree 13 14.1 14.3 100.0

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plf Politico-Legal Factors

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 7 7.6 7.6 7.6
disagree 2 2.2 2.2 9.8
undecided 15 16.3 16.3 26.1
agree 59 64.1 64.1 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

Statistics
Working Place Factors
N Valid 92
Missing 0

wpf Working Place Factors

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 7 7.6 7.6 7.6
disagree 2 2.2 2.2 9.8
undecided 13 14.1 14.1 23.9
agree 62 67.4 67.4 91.3
strongly agree 8 8.7 8.7 100.0
Total 92 100.0 100.0

Statistics

tf Technological Factors
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 7 7.6 7.6 7.6
disagree 3 3.3 3.3 10.9
undecided 15 16.3 16.3 27.2
agree 58 63.0 63.0 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

Statistics
Infrastructural factors
N Valid 92
Missing 0

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if Infrastructural factors
Frequency Percent Valid Percent Cumulative Percent
Valid Strongly disagree 8 8.7 8.7 8.7
disagree 2 2.2 2.2 10.9
undecided 15 16.3 16.3 27.2
agree 59 64.1 64.1 91.3
strongly agree 8 8.7 8.7 100.0
Total 92 100.0 100.0

Statistics
Marketing Factors
N Valid 92
Missing 0

mf Marketing Factors
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 8 8.7 8.7 8.7
disagree 3 3.3 3.3 12.0
undecided 15 16.3 16.3 28.3
agree 57 62.0 62.0 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

Statistics
Financial Factors
N Valid 92
Missing 0

ff Financial Factors
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 9 9.8 9.8 9.8
disagree 3 3.3 3.3 13.0
undecided 12 13.0 13.0 26.1
agree 59 64.1 64.1 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

Statistics
Management Factors
N Valid 92
Missing 0

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maf Management Factors

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 9 9.8 9.8 9.8
disagree 3 3.3 3.3 13.0
undecided 11 12.0 12.0 25.0
agree 60 65.2 65.2 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

Statistics
Entrepreneurial factors
N Valid 92
Missing 0

ef Entrepreneurial factors
Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 9 9.8 9.8 9.8
disagree 5 5.4 5.4 15.2
undecided 11 12.0 12.0 27.2
agree 58 63.0 63.0 90.2
strongly agree 9 9.8 9.8 100.0
Total 92 100.0 100.0

scf social -cultural factor

Frequency Percent Valid Percent Cumulative Percent
Valid strongly disagree 9 9.8 9.8 9.8
disagree 5 5.4 5.4 15.2
undecided 12 13.0 13.0 28.3
agree 56 60.9 60.9 89.1
strongly agree 9 9.8 9.8 98.9
34 1 1.1 1.1 100.0
Total 92 100.0 100.0

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Politico-Legal Factors 92 1.00 5.00 3.6630 .96393
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Working Place Factors 92 1.00 5.00 3.6739 .95052
Valid N (listwise) 92

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Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Technological Factors 92 1.00 5.00 3.6413 .97869
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Infrastructural factors 92 1.00 5.00 3.6196 .99275
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Marketing Factors 92 1.00 5.00 3.6087 1.01588
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Financial Factors 92 1.00 5.00 3.6087 1.04783
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Management Factors 92 1.00 5.00 3.6196 1.04663
Valid N (listwise) 92

Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Politico-Legal Factors 92 1.00 5.00 3.6630 .96393
Working Place Factors 92 1.00 5.00 3.6739 .95052
Technological Factors 92 1.00 5.00 3.6413 .97869
Infrastructural factors 92 1.00 5.00 3.6196 .99275
Marketing Factors 92 1.00 5.00 3.6087 1.01588
Financial Factors 92 1.00 5.00 3.6087 1.04783
Management Factors 92 1.00 5.00 3.6196 1.04663
Entrepreneurial factors 92 1.00 5.00 3.5761 1.07144
social -cultural factor 92 1.00 34.00 3.8913 3.34945
Valid N (listwise) 92

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European Journal of Business and Management www.iiste.org
ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online)
Vol.10, No.22, 2018

One-Sample Statistics
Std. Error
N Mean Std. Deviation Mean
Politico-Legal Factors 92 3.6630 .96393 .10050
Working Place Factors 92 3.6739 .95052 .09910
Technological Factors 92 3.6413 .97869 .10204
Infrastructural factors 92 3.6196 .99275 .10350
Marketing Factors 92 3.6087 1.01588 .10591
Financial Factors 92 3.6087 1.04783 .10924
Management Factors 92 3.6196 1.04663 .10912
Entrepreneurial factors 92 3.5761 1.07144 .11171
social -cultural factor 92 3.8913 3.34945 .34920

One-Sample Test
Test Value = 0
95% Confidence Interval of the
Mean Difference
t df Sig. (2-tailed) Difference Lower Upper
Politico-Legal Factors 36.449 91 .000 3.66304 3.4634 3.8627
Working Place Factors 37.073 91 .000 3.67391 3.4771 3.8708
Technological Factors 35.687 91 .000 3.64130 3.4386 3.8440
Infrastructural factors 34.971 91 .000 3.61957 3.4140 3.8252
Marketing Factors 34.072 91 .000 3.60870 3.3983 3.8191
Financial Factors 33.033 91 .000 3.60870 3.3917 3.8257
Management Factors 33.171 91 .000 3.61957 3.4028 3.8363
Entrepreneurial factors 32.013 91 .000 3.57609 3.3542 3.7980

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