Factors Affecting Business Growth in Kenya
The licensed variable is 10% significant. This means that a company that operates legally is more likely to report more profits than a company that operates illegally. The legal status makes these companies more profitable and sustainable [31, 36]. Government regulations affect the performance of SMEs or other businesses. Government regulations can help or hinder business growth. Some companies are required to sell their products according to some of the procedures described, and their compliance ensures business continuity. For example, some gold miners are required to sell minerals through government agencies and are not allowed to export them themselves. In Kenya, a study found that in some sectors there was a positive correlation between profitability and other government requirements [25]. Barringer, B. R., and Jones, F. F. (2004).
Achieving Rapid Growth: Revisiting the Problem of Management Capacity. Journal of Developmental Entrepreneurship, 9(1), 73-86. The financial problems (finprob) turned out to be insignificant. Problems related to the fact that the company had financial problems at some point in the business did not have a significant impact on the profitability of the business. This contradicted other studies that found that financial problems contributed to SME failure and held back growth [12, 34, 35]. Marital status was not significant. Whether you are married or not does not have a significant impact on profitability. Some single women work in Zimbabwe with varying results and compete equally with married people. Business is no longer determined by marital status, as individuals can make independent decisions or make decisions to promote the business.[13] Laws and regulations have severely compromised the growth of businesses in the country. This is due to the high interest rates on returns imposed on companies by the government. For a company that does not have deep roots in the business world, this has a direct impact on its performance and hinders its growth.
Nkua et al. [12] focused on the impact of access to credit on SME growth and business activity. Nkua et al. [12] argue that the availability of credit is important for the survival and growth of SMEs. It is also argued that policymakers should pursue financial sector policies to encourage financial intermediaries to develop appropriate products and services for SMEs. In Ghana, lack of adequate access to credit is a major obstacle to the growth of small businesses. The argument is based on the premise that funds are needed, among other things, to invest in innovation and restructuring. These results of the study showed that there was a significantly positive association between access to credit and certain attributes of a business.
The results also showed that the following factors also influence SMEs` access to bank credit: registration, business registration, asset ownership, documentation and business planning. Commercial insurance (bus insurance) has proven to be insignificant. This means that commercial insurance has no impact on the profitability of the business. However, the results differed from some other studies that indicated that an insured company would likely report more profits [40]. The lack of entrepreneurial skills, zeal and capacity hinders business success. Njanike [24] argues that before starting a business, the following important question must be answered: Am I an entrepreneur? If you go into business by default, the probability of failure is high, and if they are self-managed, these companies get opponents. Many businesses on the African continent today are the product of unemployment, budget cuts, economic malaise and shrinking labor markets. Wrong location; The success of a company is determined by its positioning in the right business environment.
Having the right business location helps you reach the right audience, making it easier for a business to sell products and services. Employee motivation (empmot) has not had a significant impact on the profitability of SMEs in Zimbabwe. This means that any form of employee motivation program has had no impact on profitability. The reason for this may be that so many incentives managed by owners or families may not mean much to them, as they will enhance the value of the business. However, many studies have found different results than the current study, as employee motivation is thought to have a major impact on business profitability [36, 37]. Women and men run businesses in the same sector and the profitability of their businesses varies. Does gender have an impact on the profitability of SMEs in Zimbabwe? Lack of management experience is a major obstacle to a company`s growth. Most young people who start a business do not have the skills to lead it to growth; They are running their business for the first time.