The effect of entrepreneurial skills on business performance: A case of study of small and medium enterprises in Nansana municipality

Abstract

This study explored the effect of entrepreneurial skills on business performance; a case study of Nansana municipality. The study was guided by the following objectives; 1. To establish whether management skills are associated with performance of SMEs 2. To establish whether marketing skills are associated with performance of SMEs 3. To establish whether financial management skills are associated with performance of SMEs Across sectional research design was used for the study. The study population consisted of SMEs. A combination of stratified and simple random sampling was used select the sample of eighty (80) respondents. A Statistical Packages for Social scientist (SPSS), was used to analyze the data. Inferential statistics were used to draw conclusions about the population while descriptive statistics was used to summarize the features of the data set. Financial management skills was measured using a likert scale to include respondents ability to maintain accounting records, keep invoices and business documents, manage finances and ability to provide financial statements to make business decisions. Similarly marketing skills included identifying customers, mechanisms used to communicate with customers, consulting customers about producer effectiveness and monitoring changes in the marketing environment. Management skills included managing a business, developing action plans, supervising employees to ensure good results and creating new opportunities for business success. The independent variable business performance was measured using market, sales and profits. Findings reported positive weak correlation coefficients. The P- values, showed financial management skills had a value (0.001) which is less than the significance level of 0.05. This indicates sufficient evidence that financial management skills influence business performance. The p-value of years in business, education level, sex and management skills and marketing skills were greater than the significance level of 0.05 indicating no sufficient evidence to say that they influence business performance. Therefore, SME owners or managers in Nansana municipality need to have strong financial management skills to be able to make effective decisions. They should consider maintaining accounting records, keep invoices and provide financial statements to make business decisions that can to improve their business performance.