An Exploration Of Factors That Lead To Success Of Micro, Small And Medium Enterprises In Ga East Municipality

Abstract

Micro, Small and Medium Enterprises (MSMEs) have over the years developed to become an important driver of economic growth. Ideas are transformed into opportunities which have provided jobs for a large number of people outside formal jobs through the setting up of small businesses. This study focuses on the Ga-East municipality. The objectives are to identify the factors that lead to MSMEs success and also the major challenges faced by MSMEs operators. Using an ordered probit model with primary data, the study reveals that age and years of education of microenterprise owners as well as sound bookkeeping practices determine business success. The study further revealed that the major challenge faced by business owners is fuel and transportation costs. It is recommended that government give further training to firms regarding sound bookkeeping to further enhance their productivity. In addition, government must make entrepreneurship education a priority so that majority of people upon completion of formal education would have entrepreneurial skills. Also, government must work on the transportation sector and the macro-economy as a whole to bring down transportation cost and cost of credit.