TABLE OF CONTENTS
ACKNOWLEDGEMENT
DEDICATION
APPROVAL
DECLARATION .
iv
TABLE OF CONTENTS v
L1ST OF FIGURES ix
LIST OF ABBREVIATIONS x
ABSTRACT
CHAPTER ONE 1
GENERAL INTRODUCTION 1
1.0 Introduction 1
1.1 Background of the Study 1
1.2 Statement of the Problem 3
1.3 Objectives of the study 3
1.3.1 General objective 3
1.3.2 Specific objective 3
1.4 Research Questions 4
1.5 Scope ofthe Study 4
1.5.1 Conceptual scope 4
1.5.2 Geographical Scope 4
1.5.3TimeScope 4
1.6 Significance of the study 5
1.7 Justification 5
1.8 Definition of the key terms 5
1 .9 Fig 1 .1: Conceptual Framework 6
CHAPTER TWO 8
V
LITERATURE REVIEW .8
2.0 Introduction 8
2.1 Theoretical review 8
2.2 Review of main concepts of the study 9
2.2.1 Entrepreneurship Skills 9
2.2.2 Financial Performance of SMEs 10
2.3 Actual literature review 11
2.3.lEffect of Management skills and financial performance of SMEs in Uganda 11
2.3.2 Effect of Communication skills and the performance of SMEs in Uganda 14
2.3.3 Effect of financial literacy on performance of SMEs 14
2.4 Conclusion 16
CI-IAPTER THREE 16
3.0 Introduction 17
3.1 Research Design 17
3.2 Area of the study 17
3.3 Study population 17
3.4 Sampling procedures 17
3.4.1 Sample size and Selection 17
3.4.2 Sampling techniques 18
3.5 Data Collection Methods and Instruments 18
3.5.1 Methods 18
Questionnaires 18
Interviews 18
3.5.2 Research instruments 19
3.6 Validity and Reliability of Instruments 19
3.6.1 Validity of the Instrument 19
3.6.2 Reliability of the Instrument 20
vi
3.7 Analysis of Data .20
3.7.1 Quantitative Data 20
3.7.2 Qualitative Data 20
3.8 Ethical Considerations 21
3.9 Limitations of the Study 21
CHAPTER FOUR 22
PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS 22
4.0 Introduction 22
4.1 Bio data of respondents 22
4.2 Effect of management skills on financial performance 24
4.3 Effect of communication skills on financial performance of SMEs 27
4.4 Technical financial management on financial performance of SMEs in Mbale
municipality 29
4.5 Financial performance 31
CHAPTER FIVE 33
SUMMARY OF THE FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 33
5.0 Introduction 33
5.1 Summary of the findings 33
5.1.1 What is the effect of management skills on financial performance of SMEs 33
5.1.2 What is the effect of communication skills on the financial performance of SMEs 34
5.1.3 What is the effect of technical financial management on the financial performance
of SMEs 34
5.1.4 Financial performance of SMEs in industrial division mbale municipality 35
5.2 Conclusions 36
5.2.1 Effect of management skills on financial performance of SMEs 36
courses enable the employees to be efficient when carrying tasks 36
5.2.2 Effect of communication skills on financial performance of SMEs 36
5.2.3 Effect of technical financial management on financial performance of SMEs
ABSTRACT The purpose of the study was to investigate the effect of entrepreneurship skills on the financial performance of SMEs in industrial division Mbale municipality. The objectives of the study were the effect of management skills on the financial performance of SMEs. The second objective was to examine the effect of communication skills on the financial performance of SMEs. Last objective examined the effect of technical financial management and financial performance of SMEs. The study used a case study design to conduct the study in industrial division Mbale municipality. Simple random sampling technique was used to select 86 SMEs into the study. The findings from the study show that there is a significant relationship between management skills and financial performance of SMEs. (R0...689) shows a positive correlation between management skills measured in terms of business following a business plan in implementation and increase in equity in business. Management skills positively affect financial performance of SMEs. The finding from the regression analysis shows that there is a moderate positive relationship between communication skills and financial performance of SMEs. An (R0.557) gives us evidence of a significant relationship between close contact with business customers and increase in equity in business. The finding from regression analysis shows that there is strong positive relationship between technical financial management and financial performance of SMEs. (R=O.765) gives us evidence that is a strong positive correlation between technical financial management in terms of hiring qualified personnel in financial advice and increase in equity in business. SMEs follow a specific business plan when implementing its activities; customers are treated with a high esteem and cnhance the relationship of the business and customer. Management capacity building enhances the skills of the employees in SMEs and refresher courses enable the employees to be efficient when carrying tasks. Most of the SMEs are well versed with accounting techniques; they also undertake their employees in formal book keeping training and also employ an expert in financial analysis. Financial accounting systems have made accounting easy and this has improved the financial performance of SMEs because of reduced errors in preparing the financial statements. SMEs in industrial division in Mbale municipality experience increment on equity and returns on various assets. Good investment policy reduce risks in the business and most of the SMEs are financially stable since their net margin profits are above average The government must increase on educating the public masses on various management skills and increase on the funding in public universities thus creating more management courses in various universities. This will enable the public be equipped with management skills in business and hence leading to the growth of SMEs country wide. SMEs should embark on getting various models that may enhance communication skills for example having an employee who understands all the languages. This will be another step in realizing mores sales and revenue among SMEs. Increment on courses under financial management in universities across the country will increase on the number of people with expertise in financial analysis and this will help SMEs to get skilled personnel in the area of financial management which will enhance their performance in industrial division Mbale municipality
