An assessment of the impact of strategic planning on the performance of small and medium-sized enterprises in Uganda: a case study of Nakawa Division

Abstract

The main objective of this study was to Assess the Impact of Strategic planning on SMEs Performance in Uganda with specific reference to Nakawa Division, Kampala District. The focus was put on age, period of establishment, differences in the highest level of education attained, nature of SMEs, gender of the respondents, challenges facing SMEs, and Impact of strategic planning on performance. The study used a quantitative approach and both primary and secondary data sourced from Nakawa Division in Kampala District using a sample size of 100. Respondents were asked to fill out the questionnaire. Closed-ended questions were used to collect data from the target group. Data analysis was done at three levels; at the Univariate level were frequency distribution tables and percentages were used and Bivariate level where cross-tabulations were used to generate the Chi-square test that was used to explain the relationship between independent variables which included age, period of establishment, highest education level attained, a difference like SMEs, challenges facing SMEs and the dependent variable which is strategic planning. The study concluded that strategic planning greatly affects SMEs performance and there is a significant relationship between the two variables as SMEs exhibiting strategic planning were seen to portray better performance in terms of increased sales growth, asset retention, profit margins, personal retention, higher survival rates, ability to achieve both long and short term objectives as well as organizational goals and objectives in comparison to those that hadn't embraced it. The study recommends that possible measures and strategies be undertaken by the government, NGOs, and Donors to increase strategic planning levels through refunding of commercial banks and micro-financial institutions by extending cash loans or by loosening liquidity ratio requirements to provide financial institutions with extra liquidity required to provide small scale loans to SME owners since financial challenge was identified as the major challenge facing SMEs in Nakawa Division. Time constraints, financial challenges, limited access to data, cultural biases, language barrier, the insufficient sample size for statistical measurements were some of the limitations of the study. The study asserts that future research should cover a wide range of studies and a larger sample size in different regions of Uganda. This will help make better results for future researchers.