Factors influencing the establishment of small businesses enterprises in urban centers of Machakos county

Abstract

The aim of this study was to establish the factors influencing establishment of small business enterprises in urban centers of Machakos County, Kenya. The objectives of the study were to establish whether; entrepreneurial skills, financial resources, county business regulations and competition among small and large businesses influence establishment of small business enterprises. The study adopted a descriptive survey research design. The population comprised all small business enterprises in Machakos town, Mavoko town and Matuu town with small businesses of 1500, 2150 and 896 respectively which were randomly selected using systematic sampling procedure for the study. Purposive sampling was used to select Machakos Town, Mavoko and Matuu as the study site. The study relied on interview and data collected through a questionnaire structured to meet the objectives of the study. Quantitative information was summarized into frequencies and percentages. Independent chi square test were used to test hypothesis. Responses were tabulated, coded and processed by use of a computer Statistical Package for Social Science (SPSS) version 17.0 to analyze the data. Qualitative information in the interview guide were transcribed and reported in narrative reports. The study findings were; some knowledge on how to conduct business, cost of financing/source of financing, County regulations and competition of already existing businesses all have significant influence on establishment of small business enterprises significantly. The study concluded and recommended that the County Government should consider reducing the county regulations to influence the establishment of small scale businesses, the small scale businesses should also come up with strategic alliances with other businesses or try networking with other businesses that they shared the same goals with in order to counter competition from already large existing businesses. By identifying and cooperating with those allies, the small scale businesses could gain access to other local markets, increase sales and revenue, access external sources of funds, gain technological know-how, and become more resilient and stronger to withstand domestic and foreign competitive onslaughts among other benefits. Key recommendation is for the County Government to consider strategies of enhancing entrepreneurial skills to its citizens. Further similar studies should be undertaken in other sample counties in the country, and particularly to establish whether making entrepreneurial education a compulsory subject in all educational programs may influence establishment of small scale businesses in Kenya.