A Study of the Causes of Failure of Small-scale African Businesses: a Case Study in Machakos District

Abstract

This study was carried out in Machakos District to find out the causes of failures of Small-Scale African businesses from the "failures". themselves. So a questionnaire to solicit information from those failed businessmen was administered. Small Scale African businessmen have not always done their businesses as expected. This is despite the fact that government and other non-government agencies have made deliberate efforts to help the upcoming African businesses and especially in the rural areas. Government and non-government institutions meant to help these businesses and their roles are mentioned .. The problem that confronted business in the area of study and caused failures were analysed and were found of two types basically. These are problems internal i.e. that are considered as directly associated with the businessmen themselves and within their control. And second are external Problems that, originate from the business environment and as Such, the owners do not have direct control on them. The firs t Category are problems that include the big size of the family, high school fees bill-resultant from the first problem, and the inadequate business management skills. Then second category problems include the presence of hawkers, the drought and /or famine prevalent in Machakos District, the defective distribution and licensing system - where the distribution agents are not allowed trade credits and thus may not carry sufficient stock to satisfy retailers-needs, and wholesalers are also given retailers licenses. These then given unfair competition to the small scale businesses in addition to hoarding, especially of fast moving items. The conclusion reached after the investigation and analysis was that government and other non-government organizations interested in encouraging small scale African businesses, especially in the rural areas will have to redefine their roles. This is because they are dealing with a dynamic environment 6Jwith diverse and unique problems confronting each individual. The success of these agencies will depend on the change of attitude towards the family, general and/or more relevant education to the youth and the general development of other sectors of the Kenyan economy. " Finally-any he In meant to help the small scale African entrepreneurs will only succeed if it is carried by a disciplined workforce that will not only give advice and help to each . entrepreneur according to his unique situation and needs, but also ensure a follow-up constantly so that problems can be detected and corrected in time.