Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
Role of policy
It is perceived that policy makers can influence either the rate or movement of entrepreneurship. Two out
of three of the respondents wanted policy intervention to be used to stimulate their activities. This can
take the form of targeted policy.
Age
Age had a significant influence on business growth. Increase in age showed an increase in business
growth by 0.02% annually. The experience gained through those ages proved useful in making better
decision. Though they were risk averse, most of their decisions were made on previous practise. It is
unlikely that those with few years of experiencing will make risky decisions that will negatively affect
their capital base. Policy should be initiated to encourage younger people to get involved in business.
Education
The findings show that lack of business skills and experience played a key role in determining business
growth. The number of years spent on education is linked to improved individuals’ interpersonal skills
and need to perform well. Majority of respondents had a positive perception that; introduction of
entrepreneurial education in schools would have on cultivating entrepreneurial skills on the youth. The
argument sticks on notion that an individual’s lack of adequate skill negatively affects their ability to
operate a business as shown by 65% respondent.
Family Size
The results show that the probability of success is low for those with large families than those without;
there was a relationship between large families and cash flow challenges. Despite the entrepreneurs
acknowledging the adverse effect family based funds withdrawal had on their success, most said the
cultural setting makes it almost impossible not to dig into business accounts whenever a family member is
in need. .
Geographical endowment
Most interviewees felt that the capital city provides them with better opportunity, but mentioned
numerous things that negatively affect their growth. This includes aspects of unfair competition by crude
traders; 45% of the respondent with family suggested that they would be willing to relocate to cities that
provide the incentive to their families. It is perceived that the capital city has better infrastructure that
results in other positive externalities, thus increasing the chances of business success for individuals within
the city Setting; starting at an advantaged position (B1) given all other factors are constant.
Challenges
First, it was difficult to categorize SME based on their income; information regarding profit was not
readily disclosed. In some cases, individuals did not keep proper books of account. This inevitably
affected the ability to draw a credible conclusion on the influence financial leverage has on
entrepreneurship growth. It is against this background that the study avoided taking into account financial
ratios and working capital.
Second, not included in the model were characteristics that provide warning signs that an entrepreneurial
venture is financially vulnerable. These variables are needed; in theory their influence on success of
entrepreneurial initiative should not be ignored. However, the paper argues that high financial leverage
does not necessarily equate to business success hence it is possible to draw conclusion based on other
variables.
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