CUSTOMER CARE AND FINANCIAL PERFORMANCE OF SMALL

SCALE BUSINESSES AT BUSIIKA TRADING CENTRE

PRESENTED BY;

MULUVIA ASHA

19/MGT/BU/R/0007

SUPERVISOR :PATIENCE GLADYS NAMBALIRWA

FEBRUARYB 2022

1
  
Background of the study

Globally, customer care is the life blood of every small scale business (Allen, 2006).
Statement of the Problem
According to James Taylor, the report from the World Bank in 2020, it indicated that performance of
small scale businesses have been declining, 125 businesses performed poorly for example they had a target
of 20M sales in 2018 but the actual sales were 12M which show a 40% down fall, which was due to poor
customer handling and mismanagement of business funds.
According to Ahmad et al(2019), approximately 80%-90% of SMEs fail within 5-10 years. Good
financial management practices have been viewed as critical elements in the business. Therefore the study
established whether customer care influences financial performance of small scale businesses in Busiika
trading center.

2
 Objectives of the Study

General Objective
To establish the influence of the customer care on financial performance of small-scale
businesses in Busiika trading Centre.

Specific Objectives of the Study

I. To find out the level of customer care employed by small scale business owners in
Busiika trading center.

II. To find the level of financial performance of small scale business in Busiika trading
center.

III. To determine the relationship between the customer care and financial performance of
small scale businesses in Busiika trading center.

3
 Research Hypothesis

There is no significant relationship between customer care and financial performance of

small scale businesses in Busiika trading center
Conceptual Framework
Independent variables Dependent variables

Customer care
 Service quality Financial Performance of SSBs
 After sales services  Business expansion
 Sales discounts  Sales Volume

4
 Summary of Identified Gaps

The literature did not talk about the influence of the customer care on financial
performance of small-scale businesses in Busiika trading Centre.
This study therefore established the relationship between the customer care and
financial performance of small scale businesses in Busiika trading center
Research Design
 The study used the descriptive, cross-sectional and correlation research designs

 Descriptive research design was used to describe the procedures that were used to
manage customer care in Busiika Trading Centre.
 Cross sectional research design was used to collect data for a specific period of time
 Correlational research design was used to determine the relationship between customer
care and financial performance of small-scale businesses in BusiikaTrading Centre.

5
 Table 1: Sample Size

The study used the Morgan (1970) table which illustrates that if the target population is 137,
the sample size becomes 101
Types of small scale Target Population Sample Size
businesses

Retail Shops 100 74

Restaurants 12 9

Saloons 14 10

Grocery 8 6

Other 3 2

Total 137 101

6
 Sampling Procedures

Study used stratified and simple random sampling to determine the elements to be
included in the sample.
The population was divided into different group of businesses as shown in table 1 with the
strata being retail shops, saloons, restaurants, grocery and others.
From each stratum simple random technique was used to select the element from each
group by simple ballot according to the respective sample sizes.

Data Collection Procedure

To collect data, i got an introduction letter from the Dean, School of Business, Bugema
University, before proceeding to the area of study.
The introduction letter was presented to the Chairperson Busiika Trading Center and the
business owners or managers who provided the list of the customers. Permission was sought
from the managers and appointments was made with the respondents.

7
 Validity of Research Instrument

0.863
Reliability of the Research Instrument
Reliability of the Research Instrument was determined by carrying out a pre-test on 20
small scale business operators from Kiwenda trading Centre since it has similar business
characteristics with those of Busiika.

8
 Data Processing and Analysis

The researcher processed the raw data collected from the field by editing, coding, and
entry to SPSS. Statistical Package for Social Scientist (SPSS) was used to analyze the raw
data.
Objectives 1 and 2 were analyzed using descriptive statistics, such as mean and standard
deviation while objective 3 was analyzed using inferential statistics of Pearson’s moment of
correlation.
The qualitative data was analyzed using thematic analysis which aims to find common
patterns across a data set as it involves getting familiar with the dat.
The Hypothesis was determined based on the P -Value of 0.05 to reflect the level of
significance.

9
 SUMMARY OF RESULTS

Regarding the level of customer care, results indicate a grand mean of 2.41 and standard

deviation of 0.779 implying that there was a low level of customer care applied by operators

of small scale businesses in Busiika Trading Centre. And this could affect the sales turnover

and profitability of such organization.

Regarding the level of financial performance, results indicate a grand mean of 2.33 and

standard deviation of 0.869. This implies that there was a low level of financial performance

of small scale business in Busiika trading Centre. This suggests that small scale enterprises

in Busiika trading Centre realize minimal or low expansion and sales leading to low

profitability and declined financial performance. With such trend, such businesses are more

likely to collapse. 10
 SUMMARY OF RESULTS …,,,,,,,,,

The null hypothesis was rejected (P value 0.001≤ α value 0.01). However, the results
indicate that there was a weak positive relationship between the customer care management
and financial performance of small scale businesses in Busiika trading center at a
correlational coefficient of 0.331** or r 2=0.331*0.331=11.0=11.0 suggesting that in every
unit of customer care, there is a 11.4% increase in financial performance of small scale
businesses in Busiika Trading Centre.
The results reveals that the P value of 0.001 was less than the level of significance (0.01)
then the null hypothesis was rejected and alternative positive hypothesis accepted that states
that there is a significant relationship between Customer Care and Financial Performance of
SSBs at Busiika trading center.

11
 Conclusion

There was a low level of customer care applied by operators of small scale businesses in

Busiika Trading Centre in terms of after sales service and sale discounts as result this

leads to low level of financial performance besides customer care influences the financial

performance to small extent for small scale businesses in Busiika trading Centre.

Recommendations

Small scale businesses should apply effective customer care strategies in order to attract

more customers, make customers loyal and more satisfied with their services and products

by improving on the after sales service and offering reasonable sale discounts.

12
13