Effects of entrepreneur and firm characteristics on turnover of SMEs in Uganda: a case study of Kawempe division

Abstract

This research project was intended to examine overall effects of entrepreneur and firm characteristics on turnover of SMEs in Kawempe Division. The research findings were based on a sample size of 105, which was determined using Cochran’s formula (1963) at 5% level of precision. Face to face interviews were conducted in Kawempe Division with a well-designed guide in KOBO collect of all the predetermined questions. Data was then downloaded to Excel and cleaned for analysis. It was thereafter imported to STATA for analysis and inference was made at three stages; Univariate, Bivariate and Multivariate. The results showed that entrepreneur’s experience in business, education level of an entrepreneur, firm’s age and its size significantly influence SMEs turnover in Kawempe Division at 5% significance level since their respective probability values are less than 0.05 in a joint analysis. Particularly, SMEs turnover increases by 7705.58 shillings as entrepreneur’s experience in business increases by one year keeping other factors constant (p value=0.034). More so, entrepreneurs who have completed university have more of their business turnover than those who completed primary by 137784.03 shillings keeping other factors constant (p value=0.041). Also, firm’s age increases its turnover by 21482.44 shillings keeping other factors constant (p value= 0.000). Lastly, firm’s size increases SMEs turnover by 13241.50 shillings keeping other factors kept constant (P value=0.017). Therefore, the study recommended that the government should make higher education accessible and affordable by all people willing to get involved in business in Kawempe Division as it significantly increases SMEs turnover. More so, entrepreneur’s experience was found to have a significant relationship with SMEs turnover other factors kept constant. The study recommended that improvements in working experience by entrepreneurs is also a necessary ingredient for enhancing turnover of their enterprises. Finally, it was observed that firm’s size is significantly associated SMEs turnover. Therefore, the study recommended that SMEs should increase on number of workers employed since they are associated with increase in firm’s turnover.