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Success Factors for SMEs in Addis Ababa

This document is a proposal for a study investigating success factors for small and medium enterprise (SME) development in Addis Ababa, Ethiopia. The proposal outlines that SMEs are important sources of employment and economic contribution in both developed and developing countries. However, SME failure rates are higher than large enterprises, often due to financial problems. The study aims to qualitatively analyze factors affecting SME performance and identify keys to success. Specific objectives are to examine influences on SME performance and recognize critical success factors for SME development in Addis Ababa.

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Zerihun
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124 views3 pages

Success Factors for SMEs in Addis Ababa

This document is a proposal for a study investigating success factors for small and medium enterprise (SME) development in Addis Ababa, Ethiopia. The proposal outlines that SMEs are important sources of employment and economic contribution in both developed and developing countries. However, SME failure rates are higher than large enterprises, often due to financial problems. The study aims to qualitatively analyze factors affecting SME performance and identify keys to success. Specific objectives are to examine influences on SME performance and recognize critical success factors for SME development in Addis Ababa.

Uploaded by

Zerihun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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A Qualitative Analysis of the Success Factors for the SME

Development in Addis Ababa

A PROPOSAL SUBMITTED TO RIFT VALLEY UNIVERSITY SCHOOL


OF GRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF MASTER DEGREE IN
BUSINESS ADMINISTRATION (MBA)

By Zerihun Hailu

ADVISER: - Nurziman

June, 2021

Addis Ababa, Ethiopia


INTRODUCTION

Both in developed and in developing countries most of the enterprises are Small and Medium
Enterprises (SMEs). SMEs have become important as sources for employment and as
contributors to economy.

Researchers have found out that the failure ratios of SMEs are greater than the ratios of Large-
Scale Enterprises. Financial problems are one of the most critical factors in the failure ratios.
Overcoming challenges, sustaining growth and barriers to entrepreneurship and SME growth
such as legal environment, administrative burden, external financing, tax, burden and unfair
competition are among the examined titles affecting the success of SMEs. Financial crisis
periods also play a vital role in failures (Ipek & Ilknur, 2016). Styles of management, leader
characteristics such as entrepreneurs’ personal characteristics affecting SMEs’ growth play a
critical role in local, regional or global financial crisis periods. Examples about the leaders’ and
employees’ characteristics in the SMEs during the global financial crisis have been examined
qualitatively in one of the studies. Researchers have also figured out that 57% of the SMEs have
become unsuccessful in the first five years of their establishments. That’s why in their life cycle
the first five years are very important for SMEs. The basic reasons for failure are summarized as
follows:

 Insufficient management
 Insufficient capital
 Job-related crisis
 The problems in the payment to credit side
 Competition

General Objectives

The general objective of this study will be to investigate factors affecting the performance of
micro and small enterprises development in Addis Ababa city.

Specific objectives:

The specific objectives of this study will be:


 To examine factors affecting the performances of SME
 To identify success factors for the development of SME

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