Factors affecting the performance of small-scale businesses in Uganda. A case study of Katuna Town Council

Abstract

This study aimed at establishing the factors affecting the performance of small-scale businesses in Uganda specifically looking at the small-scale businesses in Katuna Town Council. The intention of this study is to provide the understanding on how people should start their businesses by looking at the factors affecting business performance and this helps to reduce the risk of business failure and increase the chances of business success. The study examines factors that affect the performance of small-scale businesses and these factors include; technological competency, managerial competency and skills, access to finance, competition and the demographic factors basing on the knowledge, attitude and practice by the respondents. The study population was 200 out of which a sample of 108 respondents was selected and it was randomly selected. Questionnaires and interviews were used as data collection methods and the data was analysed using Microsoft Excel, Stata-64 version15 and at univariate, bivariate levels. The research findings indicated that access to finance insignificantly influences the performance of Small-scale businesses, the P-Value (0.092) was greater than the critical value (0.05). The study findings also indicated that managerial competency and skills insignificantly influences its performance financially since the P-Value (0.570) was greater than the critical value (0.05). Competition significantly influences small-scale businesses performance since the P-Value (0.004) was less than the critical value (0.05). The study findings also indicated that marital status of traders significantly influences the performance of Small-scale businesses' development since (p-value =0.041) was less than the critical value 0.05. The study concluded that role in the business significantly influenced the business performance since the p-value 0.043 is less than the critical value 0.05 Age positively influences business performance since the p-value 0.092 is greater than the critical value 0.05

The study recommended that there should be inclusive interventions by the government in efforts to advance technology and this will improve small-scale business performance. The study also recommended that there should be reduction in interest rates to enable business traders in Katuna town council access external finance.