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Challenges of Small Enterprises

September 09, 2019


Small Enterprises are very important for the economy of every country. These small enterprises create many jobs for the people in the country. Even though they contributes highly to the economy they still faces many challenges in surviving.
Sometimes small enterprises are neglected in as they may not be able to keep up with satisfaction level of their customers. Starting and managing a small enterprise will include facing different types of challenges such as success and failure. Sometimes it just takes one simple mistake or one wrong decision from the management and it may lead to the end of that particular enterprise.
For this topic the challenges among small and micro enterprises in Nairobi-Kenya will be discussed and analyzed. According to the research report done by Michael Bowen, Makarius Morara and Samuel Mureithi for the KCA JOURNAL OF BUSINESS MANAGEMENT 50 percent of new jobs are created in Kenya from the SME sector. They also highlighted that the health of the economy as a whole is related to the health and nature of micro and small enterprise sector.


Data Collection and Analysis

For the referenced research report a questionnaire was used to collect primary data. The respondents were business owners or those involved in the start-up and day to day running of these businesses.
Figure 1: Rating of Business Performance

According to the figure 1 the responded managers and business owners are categorized in male and female. Among these respondents 5.6% people are saying that their business is failing and majority of them; that is a 50% of them responded as their business to be deteriorating. The least of them which is a 2.5% of the managers and business owners are saying that their business is very successful and the rest 41.9% of them are saying their business is successful.

Figure 2: Age Distribution by Business positions

According to this grpah the highest peak is at the age category of 25 – 30. Which means that the majority of the managers and business owners who responded to the survey are within this age categotry. So it can be concluded that most of the small enterprises are run by people in their early 20s or late 30s.

Figure 3: Relationship between Performance and level of Education

For any kind of business whether it is small enterprise or a large company; having a well-qualified and well educated team leads to success of the business. In this chart 100% of the people who has finished primary school said that their business is not doing well. These people does not seem to have any other qualifications or any training regarding the business field. On the other hand people who have completed secondary school (75.4%) and those who haven’t completed secondary school (87.5%) said that their business is doing well. Which is a higher percent than the people who have a training and finished university and above. But compared to the less educated people and higher educated people, the business run by the less educated people are not doing so well with their business. Whereas the higher educated and well training people are doing well with their business.

Figure 4: Training versus Business Performance

This figure determines the relationship between business performance and the training provided in the business related field. So as per the results for a business doing poorly 50.5% of the responded said that they were ell trained but the majority of them which is a 60.8% said that they are not trained. This indicates that the poor the training the poor the performance. Whereas for a business doing well 49.5% of the respondents said that they were trained accordingly and 39.2% said that they did not get ant training. And again majority claims that well trained business perform well.



Each and every small enterprise is different from one another and has its unique factors for success and failure. Some business might face different challenges from each other. With the analysis of the above data it is clear that the small enterprises also should consider what is trending globally and move with the flow in the economy. They can focus more about the increasing and decreasing in the demand of certain factors and trends.
As discussed before proper training in the relevant area is important for a successful enterprise. Managers and business owners are responsible for running a successful business. If they are well trained and educated their understanding level about the market, economy and challenges for the small enterprises will be clear. Knowing their customer needs and wants is the key feature for a successful business.
Determining the age category and customer requirements should be taken considerate. For this research people of above 40s does not seem to have been able to run a successful business. Which may be due to lack of knowledge about their customer wants and needs. But on the other hand managers of their early 20s and late 30s seem to know what they are doing in the business as they run their business as a success. 



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