Thesis Submitted in Partial Fulfillment of the Requirements for the Award
of Master’s Degree of science in entrepreneurship of Mzumbe University
The aim of this research was to assess the Factors affecting the performance of
Small and Medium Enterprises (SME’s). The research is a cross-section
research design employing the use of questionnaires. The research was
conducted in Dar es Salaam regional in Tanzania, covering 110 small and
micro-enterprises. The hypothesis was level of education of business owners and
management experiences have a positive relationship with a enterprise’s
performance except one variable, power shortage, that has a negative
relationship. The results obtained show the existence of a positive correlation
between variables. Although theoretically, power shortage has negative
correlation with enterprise’s performance in this study the scenario is caused by
the following factors that most of the salons now days are using other source of
energy like solar and generators. So when the national grid goes off, the
ventures shift to other sources and the one which don’t have other source of
energy are closed up and customers go to those which have energy. Not only
that, but also many saloons which are near the industrial areas and factories
receive many customers during this time because people who are working in
those industries and factories are out of their working area when national grid
goes off so they get ample time for other activities near their working area. It
shows that at that time they go out for hair cutting and dressing in salons which
have other source of electricity.
From the discussions with the owners and workers of the salons the researcher
found that not only the mentioned and discussed factors affect the performance
of small and medium enterprises, there are other factors which can be
categorized as internal and external factors which other researchers can study in
this areas.
The internal factors include workers behavior, business fund management and
proper financial control of the business. The external factors include government
support, many taxes, lack of credit, national policy and regulatory environment,
scanty market information and many others. This area needs to be researched so
that we can get the clear picture of what are the factors which really are the main
cause of poor performance of small and medium enterprises.
The government must see the effort of her people in their daily activities and
help them to secure good working environment for them to attain their business
goals. The government should remove the taxes on other source of energy like
generators and solar equipment which will help in making sure that all the
business ventures afford to buy other sources of energy for their firms and stop
relaying only on hydroelectric power.
The government of Tanzania must empower Small Industries Development
Organization to be able to introduce as many short time courses as they can for
owners of the business and their workers so that they will increase their business
understanding and help them to go hand in hand with the fast growing science
and technology.