Determinants of growth of small scale enterprises in Uganda :

Abstract

This study assessed the determinants of the growth of small scale enterprises in Bugembe town council, i.e. to investigate how the level of capital employed determine the growth of small scale enterprises, to find out how the market size the growth of small scale enterprises and to investigate the influence of taxes on the growth of small scale enterprises of Bugembe town council in Jinja district. The study took across-sectional design where both qualitative and quantitative approaches were used in the study. The study used the qualitative data basing on the fact that it provided a wide range of responses, no limits were put on respondents, and many respondents participated at a time and also enabled the researcher to understand fast, analyze and reveal data in a more meaningful way. However, quantitative data was also used to provide numerical analysis in terms of frequencies and percentage composition as a way of measuring incidental effects or influences between different variables. A sample size of 50 respondents was used to provide reliable findings to the study questions that were administered to them. The study examined the determinants of growth of small scale enterprise in Bugembe town council in Jinja district. The findings revealed that capital employed determines the growth of SMEs through impacting the level of production and quality of goods and services. This is because one with huge capital invests more than one with little capital. The study went ahead to assess how market size determines the growth of SMEs and findings revealed that; big market size boosts sales revenue which consequently increases the profit levels of the firms or small enterprises. It also contributes to the competition management in the market and hence enables the business owners to acquire a great share in the market, and URA should improve on the methods of collecting taxes by designing and updating simplified system. Taxes should be collected in relation to the size and profit of SMEs considering all other that can constrain the progress of such SMEs as there is a relationship between SMEs sizes and their ability to pay taxes. The researcher recommended for the need to train enterprise owners, managers, and other operators in order to equip them with relevant governance skills and knowledge specifically tailored towards impacting various business management practices that promote growth of SMEs.