Factors Influencing Small Business Performance: A Case Study of Mtwara Mikindani Municipality


(A Constituent College of St. Augustine University of Tanzania)

FACULTY OF BUSINESS ADMINISTRATION

Factors Influencing Small Business Performance: A Case Study of Mtwara Mikindani Municipality


A Research Report Submitted to the Faculty of Business Administration in Partial Fulfillment of the Requirements for the Award of Bachelor of Business Administration (BBA) At Stella Maris Mtwara University College

MWENGUOH, Allyson
June, 2019

CERTIFICATION

The undersigned certifies that he has read and hereby recommends for acceptance by Stella Maris Mtwara University College a dissertation entitled: “Factors Influencing Small Business Performance: A Case Study of Mtwara Mikindani Municipality” in partial fulfillment of the requirements for the Bachelor of Business Administration.




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RITHA KITELEKI
(Supervisor)
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Date




 

 

DECLARATION

I, MWENGUOH, Allyson, declare that this is my original work and has not been submitted and will not be presented to any other college, institution or university other than the Stella Maris Mtwara University College (STEMMUCO) in Mtwara for academic credit.
                                                                                                            

 

 

 

……………………………
MWENGUOH,Allyson
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Date

 

 

 

 

 

 

ACKNOWLEDGEMENT

I would like to extend my acknowledgment to my beloved mother and my family for the moral and material support, God blesses them.

 

 

 

DEDICATION

This study is dedicated to my motherfor her indescribable sacrifice, tolerance, wisdom, love, care, philosophy and strategies towards my success. She deserves to be considered as my mentor, illuminator, role model and inspiration. May Almighty God bless her!













ABSTRACT

The purpose of this study is to assess the factors influencing small business performance in Mtwara Municipality. Under this circumstance the study have looked also on how ownership on the basis of an entrepreneurial orientation, effect of capital as well as technology in business performance in Mtwara municipality.
The study was conducted in three wards such as Rahaleo, Shangani and Ligula from Mtwara Mikindani municipality. Case study research design technique was employed to support research design. Simple random sampling techniques were used in gathering information from population of 400 and sample sizes of 40 respondents have been used. Data were collected using structured questionnaire analyzed using Microsoft excel
The findings of the study revealed that entrepreneurial oriented has greater influence on performance of business especially through innovations which lead to increase in sales, profit maximization, customers retention and increase of new customers, not only innovation but also in looking the question of capital the study examined that amount of capital also affects business performance since sufficiency capital lead to the good performance in business. Finally the study looks upon the relationship between business performance and technology whereby due the ability of entrepreneur oriented to innovate, also the study found that technology cannot be isolated with performance in business activities as it cut across the modernization and simplification of different activities like data keeping and processing. 


TABLE OF CONTENTS







LIST OF TABLES



















LIST OF FIGURES




 

 

 

 

 

 

LIST OF ABBREVIATIONS

BG:                             British Gas
C.E.O:                         Chief Executive Officer
E- Commerce:             Electronic commerce
GDP:                           Gross Domestic Product
 IV:                              Intervening Variables
NBS:                           National Bureau of Statistics
SMEs:                         Small and Medium Enterprises
T.O.E:                         Technical Context, Organizational Context, Environmental Context
USA:                           United State of America








CHAPTER ONE

1.0 Introduction

The aim of this research was to determine the factors influencing small business performance in Mtwara Mikindani municipality. This part covered background to the research problem, statement of problem, research objectives, research questions and significance of the study.

1.1 Background of the study

In different parts all over the world both men and women were involving in small business activities as different entrepreneurs aiming at making their economic status and life very better. This attempt leads to investigate the various factors which were responsible for development and performance in small business in Mtwara Municipality.
Today unemployment rate stands at a staggering 12.7% (NBS 2009) forcing a large number of the working population to opt for self-employment. But due to a number of reasons the newly formed businesses fail to operate on profits and eventually close down or continue operating without a good return on investments constrained from performance and expansion. Recent studies on Small and medium enterprises by Mfaume R and W. Leonard(2003) and Kuzilwa J.A (2003), all of which were undertaken in Tanzania have identified the factors limiting the success of small and medium size businesses among them being corruption, lack of education and training, government policy, in-access to finances and many more to be revised later on in this particular study. This study find this research gape and focus on reviewing on the positive side for looking on factors influencing the performance of small business in Mtwara municipality. Also considering the fact that, factors for influencing small business performance studies in Tanzania and in developing countries in general are few and those few have not been done to the extent of providing concrete insight to be used as frameworks for further studies and also not all elements in that literature would fit findings of factors influencing small business performance into the developing world context of small firms, but at least find out some overviews to my research discussed those factors influencing small business performance and in Mtwara municipality especially three wards such as Rahaleo, Ligula and Shangani. By so doing, the societies understand most important things on small business performance, degree of relevance and usefulness. Under this circumstance the background factors like desire to achieve, accept responsibility, hard works, and risk orientation of the entrepreneur had a bearing on the success of entrepreneurs. In addition to this, the socio-economic factors such as discovery of oil and gas, emergence of academic institution such as Stella Maris Mtwara University College and Public Service College, Makonde Beach hotel, regulations, encouragement and support from society and family, good banking with available credit, social integration, social status, and free trade with limited tariffs, enterprise zone, available technology, and strong telecommunication and distribution networks are also important for creating small business.
There was no single uniformly acceptable definition of small business; that was so because a small firm in one industry and one in another industry might have different levels of capitalization, sales and employment from a small firm in another industry. Thus, definitions which are objective in nature (considers size such as number of employees, sales, profitability , net worth etc) at a sectorial level, mean that in some sectors all firms may be regarded as small while in other sectors there are no possibly firms which are small (D.J. Storey 1994).
McMahon et al (1993) referred to defining a small business as a ‘vexing and enduring difficult’ and went on to indicate that small enterprises are easier to describe than to define in precise terms. What small enterprises in fact have in common and what sets them apart from large enterprises, are other less tangible attributes that are more difficult or even impossible to measure. McMahon et al (1993) have summarized a common view that small firms are best identified by their inherent characteristics but SMEs policy of Tanzania (2003) described that, countries use various measures of size depending on their level of performance. The commonly used yardsticks are total number of employees, total investment and sales turnover. In the context of Tanzania, micro enterprises are those engaging up to 4 people, in most cases family members or employing capital amounting up to Tshs.5.0 million. The majority of micro enterprises fall under the informal sector. Small enterprises are mostly formalized undertakings engaging between 5 and 49 employees or with capital investment from Tshs.5 million to Tshs.200 million. Medium enterprises employ between 50 and 99 people or use capital investment from Tshs.200 million to Tshs.800 million.

1.2 Statement of the Problem

The study assessed the factors influencing the small business performance in Mtwara municipality. Small business are known to play a major role in social economic performance which is the case also to this municipality and contribute significantly to employment creation, income generation and stimulation of performance in both urban and rural areas, In-turn contributing to the performance of the country as a whole economically, socially and even politically.
It is estimated that about a third of our national GDP originates from the Small business sector. According to the informal sector survey of 1991, micro enterprises operating in the informal sector engaging 1.7 million small businesses consisted of about 20% of the labor force (3 million people then). Though data in Tanzania especially in the Small business sector are somewhat unreliable and sketchy, the above data saves to show how crucial the Small business sector is to the Tanzanian economy.
Since SMEs tend to be labor intensive, they create employment at relatively low level of investment per job created. With the current unemployment rate standing at a record high of 12.7 (NBS 2009 est.), most of these unemployed people opt for entrepreneurship which falls in the SME sector. Given the situation and the fact that Tanzania is characterized by low capital formation, small business is the best option to address to this problem.
This research also tried to examine the reason for conducting such as factors influencing small business performance in Mtwara municipality and to identify those factors influencing the performance of small business.

1.3 Objectives of the Study

This study focused on the following objectives

1.3.1 General Objectives

 To assess how ownership influences small business performance in Tanzania.

1.3.2 Specific Objectives

              i.      To determine how entrepreneurial orientation influence small business performance in Mtwara
            ii.      To examine the relationship between technology and business performance in Mtwara
          iii.      To examine the effect of capital on small business performance in Mtwara

1.4 Research questions

The key questions answered by this research are:
           i.         How entrepreneurial orientation does influences business performance in Mtwara?
         ii.         What are the effects of technology in small business performance?
       iii.         What are the effects of capital on small business performance in Mtwara?

1.5 Significance of the study

The study can help the entrepreneurs to expand their knowledge in business doing, also can help to realize common factors influencing the small business performance in Mtwara municipality as well as the way forward. It can also help government and other institutions in solving issues rising in various businesses activities, it can help other researchers in their studies within the same field of study.

1.6 Scope of the Study

This study had been conducted in Mtwara Mikindani municipality within three wards such as Rahaleo, Ligula and Shangani. The choice of this area to this study were due to adequate number of respondents and because of being near by the researcher hence become easy to visit using low cost in in term of transport cost.

1.7 Limitation of the Study

During data collection it happened some hindrances such as limited time in data collection, lack of finance to facilitate the work, language barriers, as well as negative response to some respondents who were not be able to answer the questions.

1.8 Delimitation of the Study

As far as facing number of limitations in my study, I tried my level best to balance the use of time during data collection process and also to reduce language barrier to my respondents by changing my questionnaire into Swahili language so as to make them easy understandable.

CHAPTER  TWO

LITERATURE REVIEW

2.0 Introduction

In this chapter, the theoretical literature studies had been reviewed about the factors influencing small business performance, different matters such as ownership, technology, the intrepreneural skills and decisions and others were discussed to ensure that no important variable could be ignored and all required literature features had been included for the success of the study.

2.1 Theoretical Literature Review

Theories used to explain the factors influencing small business performance. Several theories have been used within past research to explain small business performance.   One among them is the TOE theory developed in 1990 (Tornatzky and Fleischer, 1990). The theory identified three aspects of an enterprise’s contexts that influence the process by which it adopts and implements; they include technological context, organizational context, and environmental context. The theory based on the argument put forth by Arasa and Achuora (2012) study on the antecedent to successful adoption of small business performance in textile industry in Kenya. Such a theory has also been adopted by Ochola (2013) in a study on e- commerce adoption among micro , small and medium sector in Nairobi county, Kenya, which identified organizational, technological, and environmental issues as factors affecting adoption and implementation of e –commerce among SMEs. The current study sought to explain three theories in regard to small business performance, they include Resource-based theory, and transaction cost theory and efficiency theory.  Among these three theories the researcher chooses one theory (resource based theory) which was the best theory to explain small business implementation.

2.1.1 Resource-Based Theory

Resource-based theory has evolved in recent years to provide a way to understand how resources allow an institution or a firm to enjoyexcellent performance. (Philip Selznick 1957). Resource-based theory builds on past ideas about resources, but it represents a big improvement on past ideas in at least two ways. First, resource –based theory offers a complete framework for analyzing organizations or institutions. Second, the ideas offered by resource based theory have been developed and refined through scores of research studies involving a big number of organizations or institutions.
The tangibility of resources was very important with resource based theory. Tangible resources are resources that can be readily seen, touched, and quantified. They include physical assets such as plants, machinery, land, equipment as well as cash. Intangible resources are quite difficult to see, to touch or to quantify. They include knowledge, skills and competence of the employees, reputation (brand names) and culture of organization or institution (Barney, J.B. 1991).
According to Barney (1991) and Werner felt (1984), the firms or institutions create value by combining resources, both tangible and intangible resources along with resources, capabilities and assets are used in literature.
Under this circumstance, my research applied the resource based theory as a major way which incurred both tangible and intangible resources that associated human resource, technological resource etc.
Also D.J. Storey (1994) considers the growing small firm by a categorization combining three components namely; the starting resources of the entrepreneur(s); the firm; and the strategy.
Table number two shows that each component can be considered as a variety of different elements.

2.1.2 Ownership

 Most businesses start like a one-person band with the owner playing all the instruments. That person can usually play some of the instruments well, but he or she must also play some of the instruments by necessity. Like any musical ensemble, there are many roles in a small business. In the beginning, owners are often the best person in the company at making or delivering the product or service. And because they have the most at stake, they often wear a variety of hats including sales, accounting and more. Through a combination of skill, planning, talent and perhaps luck, some businesses grow, this performance lead to new and changing roles in the business for everyone, including the owner. Of all the roles and owner had in the business, maybe the most important one is to be the designer for the business (Grubler, 2003).

2.1.3 Technology

When you consider how much time these owners spend daily on their computers, you can see the significance of this issue (Gibson, 2001). Small businesses look to technology as a critical tool to increase efficiency and grow business networks which is particularly important now and future given the downturned economy

2.1.4 Decision

The implications of both bad and good decision making in business is numerous – from starting up the business to customer and  instilling employee cutbacks; each one of these scenarios require rational decision making. In the instance that a bad decision is made, a business not only stands to lose a huge amount of potential revenue but can even collapse and dissolve. However, good decision making in business is crucial to ensure the continuous survival of the business in question. In most instances, it is up to the manager or chief executive officer (CEO) to oversee all aspects of the business operation, and implement the necessary decisions that help a business to grow and increase its market share (Westhead, 1995).

2.1.5 The entrepreneurial Orientation

D.J Storey (1994) refers this as the characteristics of the individual or individuals who provide the prime managerial resources of the small business. The entrepreneur(s) and their access to resources can be identified prior to the business being established. In principle each element could be measured or assessed prior to starting the business, although some elements are more difficult to measure than others. An example is measuring motivation or social marginality might pose more problems than specifying gender, number of founders or their ages. Nevertheless, the integrating, or common characteristics of the entrepreneur or resource components is that all element that can be prior to business startup and they relate exclusively to the entrepreneur and his or her access to resources not to the business which is established (Kim & Arnold 1996).

2.2 Empirical Literature Review

Most of the previous studies dealing with the conditions of successful business have focused on large companies rather than SMEs (i.e., Ghosh and Kwan, 1996; Kauranen, 1996 and Pelham, 2000). However, changes in the environment cause more uncertainty in SMEs than in large companies. Their resources for acquiring information about the market and changing the course of the enterprise are more limited. The response to environmental changes was different in SMEs than in large companies. Large firms may even exit from one of its business areas, but this is not usually possible in a single-business firm. The options for responding are limited by the firms’ resources and strategic choices as well as by the opportunities offered by the industry and location. Those ways may also differ between the performance stages of the firm. SMEs have long been believed to be important in supporting economics performance within a country (Mazzarol, Volery, Doss, &Thein, 1999). One of the important roles of SMEs in this context includes poverty alleviation through job creation. Thai SMEs are increasingly seen as creator of new jobs (Swierczek& Ha, 2003) and Vietnamese SMEs employ 64% of industrial workforce.
The following recent studies based on surveys have dealt with the factors affecting SME success. Nurul Indarti and Marja Langenberg (2005) identified key components to be important in analyzing the business success of SMEs which includes the characteristics of the entrepreneurs; the characteristics of the SMEs; and the contextual elements of SME performance. Westhead(1995) studied factors influencing the survival of 227 high-technology small firms. Ghosh and Kwan (1996) made a cross national inter sectoral study of the key success factors of 152 SMEs in Singapore and 164 SMEs in Australia. Kauranen (1996) carried out a follow-up study of 37 new manufacturing firms in Finland and studied the determinants of the future success of the firm in the short term and in the long term. Yusuf (1995) explored critical success factors for small firms in several industry sectors based on the perceptions of 220 South Pacific entrepreneurs. Wijewardena and Cooray (1996) explored the importance of a set of success factors by studying a sample of 300 small manufacturing firms in Japan. Gadenne (1998) investigated the effect of various management practices on small firm performance by studying 369 small businesses in the retail, service, and manufacturing industry in Australia. Bracker and Pearson (1986) studied planning and financial performance of small mature firms in the dry cleaning business. Baker et al. (1993) studied planning in successful high-performance small firms.
The following recent studies based on surveys have dealt with the factors affecting SME success. Nurul Indarti and Marja Langenberg (2005) identified key components to be important in analyzing the business success of SMEs which includes the characteristics of the entrepreneurs; the characteristics of the SMEs; and the contextual elements of SME performance. West head (1995) studied factors influencing the survival of 227 high-technology small firms. Ghosh and Kwan (1996) made a cross national intersectional study of the key success factors of 152 SMEs in Singapore and 164 SMEs in Australia. Kauranen (1996) carried out a follow-up study of 37 new manufacturing firms in Finland and studied the determinants of the future success of the firm in the short term and in the long term. Yusuf (1995) explored critical success factors for small firms in several industry sectors based on the perceptions of 220 South Pacific entrepreneurs. Wijewardena and Cooray (1996) explored the importance of a set of success factors by studying a sample of 300 small manufacturing firms in Japan. Gadenne (1998) investigated the effect of various management practices on small firm performance by studying 369 small businesses in the retail, service, and manufacturing industry in Australia. Bracker and Pearson (1986) studied planning and financial performance of small mature firms in the dry cleaning business. Baker et al. (1993) studied planning in successful high-performance small firms. Pelham (2000) explored the relationship between market orientation and the performance of manufacturing SMEs in eight industry sectors. Based on the findings of earlier research, the factors affecting SME business success were classified into the following categories: (1) an entrepreneur Characteristics (Kristiansen, Furuholt, & Wahid, 2003; and Rutherford & Oswald, 2000), (2) characteristic of SME (Kristiansen, Furuholt, & Wahid; 2003), (3) management and know-how (Swierczek& Ha,2003), (4) products and services (Wiklund 1998; and Hitt& Ireland 2000). (5) Customers and markets (William, James, & Susan; 2005), (6) the way of doing business and cooperation (Hitt&Ireland 2000; and Jarillo 1988). (7) Resources and finance (Swierczek& Ha, 2003; andKristiansen, Furuholt& Wahid, 2003). (8) Strategy (McMahon, 2001), (9) external environment(Huggins, 2000; and NurulIndarti&MarjaLangenberg, 2005); and (10) internet (HenrietteHesselmann, Comcare, and Peter Bangs; 2002). However only 6 factors namely Characteristics of SMEs, Management and know-how, Products and Services, The Way of Doing Business and Cooperation, Resources and Finance and External Environment were considered for the theoretical framework of this study based on suitability with Bangladeshi context. Therefore, Business success is the dependent variable and independent variables are: Pelham (2000) explored the relationship between market orientation and the performance of manufacturing SMEs in eight industry sectors.
Although the significance of rapidly growing small businesses in creating employment (especially in a third world country like Tanzania) is very obvious to many, the theoretical understanding of the performance of small firms remains sketchy. This is partly because of the fact that small firms which makes the transition from small to large changes in character (Penrose, 1959). What Penrose pointed out about small firms changing in characters encouraged a number of researches to be done on the changes in a firm associated with performance. This is how the stage models came to life.

2.3 Conceptual Framework

After reviewing the theoretical and empirical literatures, the researcher came out with a conceptual framework as below.


Figure 2.1: Conceptual Framework

Capital
Intervening variables
Location
Size

·         Sales growth
·         Profit maximization
·         employees motivation
Business Gross

·         Technology
·         Decision making
·         Entrepreneurial orientation
Ownership Structure
 






2.4 Research gap

A study by Barber et al (1989) Barriers to Performance in Small Firms can be consulted. The study summarized the literature on the topic under three headings: Management and Motivation, The sources, and Market Opportunities and Structure. The idea is the same as presented above by D.J. Storey’s factors influencing small business firm development, only that barrier to performance looks at the question of small business performance in a negative way. It can also be argued at this point that, even though these studies were done in the Kenya mostly they provide a general base on how small firms were constrained from performance.
From the study above, there was different in content and context which were not mentioned, the study was done in Kenya and in Mtwara Mikindani Municipality, the objectives of the study was not similar and also it differ from number of sample size and size of study area. There is a need to conduct a research with the same title in Mtwara Mikindani Municipality because the above study was not similar in context and content. Hence, this study was aim to assess the factors influencing small business performance in Mtwara Mikindani Municipality.













CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction

This chapter discussed about research design,  area of the study, study population, sampling techniques, management and analysis of data, type of data, data collection methods and approach, validity and reliability of the data.

3.1Research design

The research designed the conceptual structure within which research was conducted; it constituted the blue print for the collection, measurement and analysis of data (Kothari, 2004). And Kumar (2005) adds that research design as a procedural plan that adopted by the researcher to answer questions validly, objectively, accurately and economically.This study cut a cross sectional research design as it was simple and commonly be used design in the social sciences. The study used case study design. This was due to the fact that the resercher was able to visit the area and meet the respondets and pass across important documents.

3.2Area of study

The study was conducted in Mtwara municipality located in southern zone of Tanzania The municipality consist of 13 wards but the study decided to search on only three wards such as Ligula, Rahaleo and Shangani wards. The municipality is bordering with Moqambique, to the south by Ruvuma river, to the west Mtwara is bordered by Ruvuma region to the north by Lindi region and to the east by Indian ocean (Mtwara district Homepage of the 2002 National Census).
The reason behind why selected the study, that the area were more influencial in small business activities and many business activities are practised there and also it was easy for me to meet my respondents.

3.3 Target  population

A population or ‘universe’ was constituted by all the items under consideration in any field of inquiry (Kothari, 2007).The targeted population  was 400 respondents who are the business stakeholders in Mtwara municipality.

3.4 Sample and Sample size

Table 3.1: Shows a Chart of Respondents Used in the Field

SN

RESPONDENTS

NUMBER OF RESPONENTS

1

EXPERT

1

2

SMALL BUSINESS ENTREPRENUERS

30

3

CUSTOMERS

9

Total

40

Source : Field data,(2019)

3.5 Sampling procedure

A sample is adequate plan for obtaining preventive information from a given population while Sampling is a process of obtaining a sample ( Mwenje 2001). Purposive sampling involves selection of particular units of the universe for constituting a sample which represents the Universe and is also used for selecting items which he considers as representative of the population. ( Kumar, 2004, pp.15).

3.6 Data Collection Methods

data are facts or observations about physical phenomena or business transactions. more specifically data are objective measurements of the attributes (characteristics) of entities such as people, places, things, and events, (o’brien, 2002). in this study, both primary and secondary data were used.  

3.6.1  Questionnaire

It was another way to collect primary data which involves having a list of questions, the answers to which are recorded by respondents. (Kumar, 2005).
In this study both the mailed questionnaires and self administered questionnaires used. For mailed questionnaires, a physical distribution of questionnaire were done to different small business organizations. Short questions and frequent follow-up visit methods were also used to increase rate of responsiveness instead of monetary incentive. For the case of self administered questionnaires, the researcher were flexible to either wait the questionnaires to be filled by respondents or agree the date or time to collect. This type of questionnaire reduces the problem of low rate of return, and consumes less time and cost.

3.6.2 Observation

Observation means viewing or seeing. This was one among the tools of data collection in research where by the researcher observed the situation and writes what the researcher has observed from the field, however this technique was used together with the information from the field in which the researcher see what happened in the field area by observing various activities that carried out by small business entrepreneurs.

3.7. Data analysis

Data collected were filled using microsoft exel tool, the researcher performed the analysis by use of tables, charts, graghs, and diagrams. Qualitative and quantitative techniques has been  used to analyze the data. Under the qualitative analysis, narrative and content analysis techniques used to explain specific research questions so as to understand their contribution to the research questions. The method used to analyze data so that the results can be interpreted for each of the research question. Thereafter, interpretation have been done by relating to the relevant  literatures on Small business.

3.8 Validity and Reliability of the data

A pilot study prior to final field application was conducted among 5-10 respondents in order to ensure validity and reliability of data. Clarity on instructions, items, and relevance was dealing upon in an attempt to establish the reliability of the measures










CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND DISCUSSION

4.0. Introduction

This chapter presents results of data analysis and findings from study area it mainly concerned with; to determine how entrepreneurial orientation influence small business performance in Mtwara Mikindani Municipality.The organization of the report was based on the specific objectives which guided this study as indicated below:-
i.                    To determine how entrepreneurial orientation influence small business performance in Mtwara Mikindani Municipality.
ii.                  To examine the relationship between technology and business performance in Mtwara Mikindani Municipality.
iii.                To examine the effect of capital on small business performance in Mtwara Mikindani Municipality.

 

 

 

 

 

 

 

 

 

4.1 Demographic profile and characteristics

4.1.1 Gender of respondent

Figure 4.1: Gender of respondents

Source: Field data, (2019)
The study considered gender issues during data collection whereby 40% were female while 60% of respondents were male who participated in providing data.

4.1.2 Age of respondents

Table 4.1:Shows demographic response by age

Ranges in years
Number of respondents
Percentage (%)
15-24
4
10
25-35
18
45
36-45
11
27.5
Above 45
7
17.5
Total
40
100
 Source: Field data, (2019)

Figure 4.2: Show demographic response by age

Source: Field data, (2019)
From table 4:2 above, the research findings revealed that, 4 respondents were aged between 15 and 24 years, 18 respondents were in age between 25 years and 35 years, 11 respondents were in age between 36 years and 45 years, and 7 respondents were in the age 45 years and above.

4.1.3 Education of the respondents

Table 4.2:Shows level of education of respondent

Ranges in years
Number of respondents
Percentage (%)
Primary level
9
22.5
Secondary level
25
62.5
Tertiary level
6
15
Total
40
100
Source: Field data, (2019)
The data from the field revealed that 22.5% attained primary education level, 62.5% attained secondary education level and 15% of respondents attained tertiary education level. Therefore through identification different level of education enabled researcher in interpretation of information provided by each respondents.

4.2. The influence entrepreneurial orientation on small business performance in Mtwara Mikindani Municipality

The study indented to explore the influence entrepreneurial orientation on small business performance in Mtwara Mikindani Municipality, closed ended type questionnaire was distributed to all respondents as follows;

4.2.1 Small business performance

Figure 4.3: Shows entrepreneurial orientation influence on small business performance     

Source: Field data, (2019)
From the field, 68% of 40 respondents agreed strongly by commenting that orientation in small business influence business performance and by adding business management skill and also 25% agreed by saying it also adds competence and risk management in the small business activities. Not only that but also 8% of the total 40 respondents disagreed by saying that there is no need for small business orientation since people can practice using experience and they can get the same profit as others.
Other respondents had claimed that “due to the entrepreneur orientation help to update new knowledge on the business which enables the business man to perform the business effectively. It enables the business man to gain new business technique to compete with other traders”.

4.2.2 Companies Risk taking bound to success

Figure 4.4:Companies Risk taking bound to success

Source: Field data, (2019)
66% of the respondents agreed strongly that companies risk taking are bound to success. Also 22% agreed by commenting that risk taking provides competence on conducting business by having the heart of tolerance and reflecting the future life cycle of the capital flow in terms of loss and profit. Not only that but also 10% disagreed by saying that risk taking cannot harm the business since the success can be attained through other factors such as opportunity seeking and advertisements.
It was observed from the study area entrepreneur orientation encourage the businessman to have confident for uncertainties that happen during the business. This is because risk taking among the managers is what helps them to figure out and take care about uncertainties that can happen in the process of running a small business.

4.2.3 Optimal use of resources bound to success

Figure 4.5: Optimal use of resources bound to success

Source: Field data, (2019)              
From the field data obtained, 48% of the respondents strongly agreed that optimum use of resources can bound to success due to the fact that careful use of financial resources and products limits un profitable use of financial and material resources without reliable reasons. Also 43% agreed that optimal use of resources helps to determine the profit obtained in the business thus influencing effective planning of the business. Also 10% disagreed by saying that success comes by plans, and therefore misuse of resources can come as a result of  unexpected emergencies regardless of the optimum use of resources that was planned.
It was observed from the study that, other respondents had said that “through entrepreneur orientation enable the businessman to use effectively the available resources for the better performance of the business. It enables to use human resource according to their qualifications and knowledge. Through the orientation help to know the application of different business machines such computer.  

4.2.4 Help ability to tackle any business challenges bound to success

Table 4.3:Ability to tackle any business challenges bound to success

Response
Total
Percentage (%)
Strongly agree
35
87.5
Agree
4
10
Dis agree
1
2.5
Total
40
100
Source: (Field data, 2019)
Figure 4.6:Ability to tackle any business challenges bound to success
Source: Field data, (2019)
Data collected from the field shows that ability to tackle any business challenges bound to success was strong strongly agreed by 88% of the respondents. They said that ability to tackle business challenges create the minds of business men think more deeper and finding more alternatives to save their interests rather than those who have no such abilities. Also 10% agreed by commenting that it adds more knowledge of understanding business environments within and outside the organization. Lastly 3% disagreed by saying ability to tackle challenges can help to manage the capital but challenges tackled normally result to loss.
A respondent from ‘MadukaMakubwa’ business centre claimed that “business orientation enables the business man to have business confidence in attacking different challenges. It gives the power an entrepreneur to ask for the loan and develop it to the business without fear a loss”.

4.2.5 Ability to compete against other business bound to success

Figure 4.7: Ability to compete against other business bound to success

Source: (Field data, 2019)
83% of the total respondents from the field strongly agreed and  evidenced that ability to compete against other business can bound to success and this is because competition brings about business awareness and creativity compared to those who do not compete.13% agreed by saying that ability to compete with other business can help businessmen to search for new markets and capital so as to satisfy their customers thus bringing more profit 5% disagreed by saying that competition can bring businessmen into loss especially when it will be so stiff and business men would have no creativity on competition.
One of the respondents added that, one of the basic techniques of business performance is to allow business competition. It opened the mind to think beyond the business reality and found many techniques to enable your business grow and grow faster

4.3The relationship between technology and business performance in Mtwara Mikindani

4.3.1 Technology influence small business performance

Table 4.4: Business technology influence performance on the small business activities

Response
Total
Percentage (%)
YES
32
80
NO
8
20
Total
40
100
Source: (Field data, 2019)
Field data showed that 80% of the total 40 respondents agreed by commenting ‘Yes’ that technology in small business influence performance by saying that it attracts customers due to new products and services innovated day after day. Also 20% of the respondents said  ‘No’ by opposing that technology in small business is not much considerable since low capital used cannot attract high profit through innovation rather than being persistence on the few profit obtained.On other side one of the respondents interviewed and claimed that small business had no need of technology use since it operated with small capital and while its customers were final consumer found around the area.

4.3.2 Technology leads to increase in sales

Figure 4.7:Technology leads to increase in sales

Source: (Field data, 2019)
53% of respondents strongly agreed that innovation leads to increase in sales by stipulating that innovation creates new products and services that attract customers. Thus sales increase as a result of demand of quality goods and services from the customers. But also 33% of the respondents agreed by saying that sales through innovation can increase because been those customers who were buying products form far areas will be buying to the businessman who has innovated new products or services in his area of business activities. Not only that but also 15% explained that sales can increase even if there will be no innovations especially when business will be conducted in the area that has no such kind of those products or services.
The study argued that technology enabled the business advertisement through the use of social media such as Facebook, Instagram and Twitter. It supplies easily the advertising of the business to many people and for short time. Hence through the technology the sales increased, hence business development.

4.3.3 Technology leads to profit maximization

Figure 4.8:Technology leads to profit maximization

Source: Field data, (2019)
75%  of the respondents from the field  agreed strongly and explained that technology leads to profit maximization due to the fact that innovation attracts many customers to buy the products on the small business thus causing small  business men getting high profit after having continuous sales and being able to add more products and services.15% of the respondents agreed just commenting that profit can be maximized as a result of increasing demand of the  high quality products  and services due since there is no customer who will need non quality products. Also 10% of the respondents disagreed and claimed that profit maximization is not resulted with the business innovation.
Other respondents interviewed and explained that profit depends on the location of the business and number of customers but not through innovation. Innovation can be there but when the location had no customers the business could not be longer developed.


4.3.4 Technology leads customers Retention

Figure 4.9:Technology leads customers Retention

Source: Field data, (2019)
43% of total 40 respondents strongly agreed and commented that technology can lead to customer retention as a result of being creative and opportunity seeking on a small business man and this can make all customers that he or she had before to continue affording goods and services from him or her32% of the respondents had agreed on the technology leads customers retention. Also 25% disagreed by saying that retention of customers can depend on technology because some customers can move to other areas although they get good innovated services.
Through the data collected the respondents agreed by commenting that technology that is done by loyalty and good care to the customers can attract and make customers to stay buying products for a long time without going to somewhere else.



4.3.5 Technology leads to increase of new customers

Figure 4.10:Technology leads to increase of new customers

Source: (Field data, 2019)
From the field of data investigation 85% of the total 40 respondents agreed strongly by saying that technology leads to increase of new customers by evidencing that those customers who are well serviced with better services and products are the one who tell others about the quality of the businessmen products and services. This causes others to come and try if it is true or not and when they get satisfied with services they become permanent customers. Also 15% agreed by saying that innovation attracts new customers because of designing new and different products and services for the customers. Likewise there was nobody who disagreed on this issue of innovation and increase of customers.                                  

4.4 Effect of capital on small business performance in Mtwara Mikindani Municipality

From the findings the study identified that, capital have greater effect on performance to the small business in Mtwara area as shown below by respondents to the table below.

 

4.4.1 Capital is one of the factor that influencing performance of your small business

Figure 4.11: Below shows responses on whether capital is one of the factors that influenced performance in business

Source: Field data, (2019)

4.4.2. Amount of capitals that can be influential in business

Table 4.12: Below shows responses on whether capital is one of the factors that influenced

Amount of capital
Number of respondents
Percent (%)
2 million to 5 million shillings
0
%
5 million shillings to 50 million   
4
10
50 million to 100 million
9
22.5
100 million to 200 million
27
67.5
Total
40
100
Source: Field data, 2019
Refers to tables above as objective intended to examine the effect of capital to the business performance in Mtwara Mikindani Municipality, as revealed in table 21 by 90% which is equal to 36 numbers of respondents agreed on the factor that capital in one of the factor that influenced performance in business. In connection to that refers to the table 22 above in assessment on which amount of capital that could be suitable to the business small owners. Since most of them pointed higher amount of capital, therefore capital is to potential for any small business performance.
On other hand the interviewed respondents claimed that, capital shape the nature of the small business by considering the amount of capital required operating the business. Large capital enabled the business to become growing and expanded, it enabled to employ the technology which will stimulate the increase of the customers and imported new products needed by the customers at a right time.


CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.0 Introduction

This chapter includes summary, conclusion and the recommendation on findings based on factors influencing small business performance

5.1 Summary of the findings

The study intended to find out the factors that influenced performance to the small business in Mtwara-Mikindani municipality, mainly it concerned with determination how entrepreneurial orientation influence small business performance in Mtwara, to examine the effect of capital on small business performance in Mtwara, to examine the relationship between technology and business performance in Mtwara. During data collection and analysis researcher also involve primary information from respondents that helped in editing and analysis of data with regards to the age, gender and education level which attained by respondents.
From the finding the study identified that entrepreneurial oriented has greater influence on performance of business especially through innovations which lead to increase in sales, profit maximization, customers Retention and increase of new customers, not only innovation but also in looking the question of capital the study examine that amount of capital also affects business performance since sufficiency capital lead to the good performance in business. Finally the study looks upon the relationship between business performance and technology whereby due the ability of entrepreneur oriented in to innovate, therefore technology cannot be isolated with performance in business activities. 

5.2 Conclusion

Based on the facts obtained from the field and data analysis based on the objectives where one of the objectives was determine how entrepreneurial orientation influence small business performance in Mtwara, to examine the effect of capital on small business performance in Mtwara, and to examine the relationship between technology and business performance in Mtwara. Therefore through interpretation of data the study identified greater connections on different factors which influenced small business development by looking entrepreneurial orientated, capital and interrelationship between business performance and technology possessed by small business man.            

5.3 Recommendations

The researcher makes the following recommendation to Government, small business owner and researchers that should consider in order improving performance of the small business.

5.3.1 Recommendation to the government

The government should encourage the small business entrepreneurs by increase recruitments professional to the required sector of business, provide loans to support the business and provide policy and practice it to the development of small business in Tanzania.

5.3.2. Recommendation to the small business

The increases in performance to the business should be considered in connection to;
        i.            Goes technological change so as to cope with market competition
      ii.            Small business owner should strive to be with sufficiency capital that could allow them to import according to the demands
    iii.            Increase creativities so as to create gap through uniqueness.
    iv.            Learn how other does in their business that could increase knowledge.

5.3.3 Recommendation for further study

There   is a need for further research on factors which influence small business in Mtwara-Mikindani Municipality, both government and private sectors should provide enough support to the researcher, by looking on different factors which influenced performance in business so as to identify further influential factors that lead to the performance in business sector.
Technology increase business performance
Innovation is the great way to success in this digital age. The path of innovation in business means doing something different, smarter or better that will make a positive difference in terms of value, quality or productivity by using emerging or proved technologies of the world.Currently online shopping, digital marketing, social networking, digital communication and cloud computing etc are the best examples of change which came through the wave of information technology. Now accurate business planning, effective marketing, global sales, systematic management, real time monitoring, instant customer support and long term business growth cannot be achieved at the optimum level without technology.
Capital improve business performace
Findings of this research highlight the importance of capital as the key component of internal resources in securing competitive advantage and achieving business performance in Mtwara logistics companies. It provides insight on the importance of companies‟ investment on capital. Companies may need to have a planned program on capital (especially related to training and education, skills, knowledge, competency and creativity and attitudes), in order to secure greater performance and gain competitive advantage for their long term survival in business. The correlation results indicates the existence of an interactive relationship between capital aspects and business performance and that the companies should understand and improve its level with an overall point of view.

5.4Fulfillment of the research gap

The study revealed the link between capital and business performance,relates the significant role of human capital on firm‟s competitiveness and performance. Further, continuous improvement of business orientation in terms of knowledge, skills and abilities is important for business input and performance. Capital has been found to be related to high quality of productivity, longevity of companies, greater tendency to business and economic growth found a significant relationship performance and productivity. Hence the success of every business depends on certain factors. Some of which are accurate analysis, choosing the right technology and the future vision. Research from the last two decade has proved that those organisations that do invest in technology and choose the path of innovation increase their market share, financial figures and overall competitiveness. Information technology is the only technology which provides you the opportunity to analyse specific data and plan your business journey accordingly. It also provides you many tools which can solve complex problems and plan the scalability (future growth) of your business. hence the study going to determine the importance of caapital, techology and business orientation towards the business performace.



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APPENDICES

APPENDIX I: Questionnaire for Small Business Owners, Small Business Managers and Sales Officers

Dear respondent,
I am MWENGUOH, Allyson, from Stella Maris Mtwara University College, conducting a research on factors influencing small business performance in Mtwara municipality. Please, I beg your full cooperation in answering the following questions.
Personal details
·         Please tick (√) where appropriate, do not write your name anywhere.
 Sex:   Male   (   )                                Female (    )       
Age:     0-24 (   )                                 25-35 (    )
           36-45 (    )                            Above 45 (    )       
Education Level
Standard VII (   )    Form IV (    )    Form VI (   )          Diploma (   )         Bachelor degree (   )   
Please, answer all questions by inserting a tick (√) in appropriate space.
1.      Does entrepreneurial training influences small business performance?
(i) Strongly agree (   ) (ii) Agree (   ) (iii) Disagree (    ) 
(b) Does business innovation influences performance your small business activities?
YES (   )                        NO (    )

2.      (c) Innovation lead to the following aspects
Please state the level of which innovation could influence the factors which shown by ticking the correct answer
1 Strongly Agree 2 Agree 3 Disagree,
 Tick where appropriate
A
Increase in sales
1
2
3
B
Profit maximization
1
2
3
C
Customers Retention
1
2
3
D
Increase of new customers
1
2
3

3.      Have you got any training of running your business before or after starting your business?   
YES (  )                           NO (  )
If yes, what are the impacts of training in running your business?
              i.      ………………………………………………………………………………………………
            ii.      ………………………………………………………………………………………………
          iii.      ………………………………………………………………………………………………
4.      What are the influences of the technology to the development of small business in Mtwara Mikindani Municipality?
           i.         …………………………………………………………………………………………
         ii.         …………………………………………………………………………………………
       iii.         …………………………………………………………………………………………
5.      Do you think capital is one of the factor that influencing performance of your small    business?         YES (   )                         NO (   )
6.      What are the impacts of capital to the development of the small business performance?
           i.         …………………………………………………………………………………………….
         ii.         …………………………………………………………………………………………….
       iii.         …………………………………………………………………………………………….



Thank you for your cooperation




 

 

 

KIAMBATANISHO: Maswali Dodoso

Dodoso kwa Wamiliki wa biashara, Mameneja wa biashara, wajasiliamali mbalilmbali  na wateja au wanunuzi wa biashara na mtaalamu wa mambo ya biashara
Ndugu, Naitwa MWENGUOH, Allyson, natoka Chuo kikuu cha Stella Maris Mtwara , nafanya utafiti kuhusu Sababu zinazochangia ufanisi wa biashara ndogondogo ndani ya manispaa ya Mtwara Mikindani. Tafadhali, naomba ushirikiano wako katika kuyajibu maswali haya.
Maelezo yako binafsi
·         Weka( √  ) Panapotakiwa, Usiandike jina lako.
 Jinsia yako?    Mume   (   )                                    Mke (    )       
 Umri wako? Miaka    0-24 (    )                     25-35 (    )
                                     36-45 (    )                     zaidi ya 45 (    )       
Kiwango chako cha Elimu:
Darasa la VII (   )    kidato cha IV (    ) kidato cha VI(   ) stashahada (   )      Shahada (   )   
Tafadhali naomba ujibu maswali  kwa kuweka (√) jibu sahihi
1.      (a) Unafikir tabia za kijasiria mali zinachangia ufanisi wako kibiashara?
(i) nakubali sana (   )  (ii) nakubali (   ) (iii) sikubali (    ) 
(b) Unadhani maboresho ya biashara ?yanachangia ufanisi wa biashara hiyo?
Ndiyo  (     )                 Hapana       (    )

2.      (c) Maboresho ya biashara huchangia haya yafuatayo
·         Weka tiki (√) faida ya maboresho unayoona ina usahihi kwa mujibu wa biashara yako.
1 Nakubali sana 2 Nakubali 3 Sikubali,





A
Huchangia ongezeko la mauzo
1
2
3
B
Ongezeko la faida
1
2
3
C
Kuwa na wateja wa kudumu
1
2
3
D
Ongezeko la wateja wapya?
1
2
3

3.      Unadhani matumizi ya tekinolojia yanachangia mafanikio yako ya kibiashara?
(i) Nakubali sana (   ) (ii) Nakubali (   ) (iii) Sikubali (   )
Eleza mchango wa matumizi ya tekinolojia katika mafanikio ya biashara
  1. ……………………………………………………………………………………………..
  2. ………………………………………………………………………………………………
  3. ………………………………………………………………………………………………

(c) Kwa uzowefu wako, ukosefu wa tekinolojia huchangia kuporomoka kwa ufanisi wa       kibiashara?      (i) Nakubali sana (  ) (ii) Nakubali  (  )  (iii) Sikubali (   )
4.      Ufanyaji wa maamuzi makini unachangia ufanisi wako kibiashara?
         (i) Nakubali sana (  ) (ii) Nakubali  (   ) (iii) Sikubali (    )
5.      Mtaji ni nyenzo muhimu kwenye biashara yako?        
           Ndiyo (   )                         Hapana (   )
Eleza faida ya kuwa na mtaji mkubwa katika maendeleo ya biashara
              i.      ……………………………………………………………………………………………
            ii.      ……………………………………………………………………………………………
          iii.      …………………………………………………………………………………………….



Asante kwa Ushirikiano







RESEARCH BUDGET

S/N
COST
DESCRIPTION
QUANTITY
AMOUNT  (Tsh)
1
Stationary
Ream paper 1
1
12,000

2
Secretarial
Typing
Photocopying
Binding


30,000
45,000
30,000
3
Meals
Breakfast
 Lunch
Dinner
60 Days
60 Days
60 Days
60,000
150,000
150,000
Total
377,000




WORK PLAN

2018
2019
Activity
May
Jun
July
Aug
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun


Proposal development and submission

Data collection


Data analysis


Report Writing


Report Submission






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