Impact of Managerial and Entrepreneurial Skills on the Success of Small and Medium Enterprises in North Western Province in Sri Lanka

Abstract

Small and Medium Enterprises (SMEs) perform as a useful vehicle for economic growth of countries because they have the capacity to achieve rapid economic growth while generating a considerable extent of employment opportunities. At the same time, SMEs are highly criticized due to their high failure rate. Then it is important to study the factors that contribute to the success of entrepreneurs so that they can be emulated and more entrepreneurs can benefit from it. As highlighted in many researches, lack of managerial knowledge and skills hamper the fast growth of the SME sector. This research attempts to investigate the impact of managerial and entrepreneurial skills on the success of the Small and Medium Scale Entrepreneurs in North Western Province in Sri Lanka. Accordingly the population of this study is all the Small and Medium scale Enterprises in North Western province in Sri Lanka. Simple random sampling was employed to select 129 SMEs as the sample. A questionnaire comprise with forty questions was distributed among owner – managers of these businesses to collect data. In this study, conceptual skills, human skills and technical skills were considered as the managerial skills and in addition entrepreneurial skills were also analyzed. Owners’ satisfaction with financial and non-financial success of the enterprise was selected to measure the business success. The study revealed that technical skills and entrepreneurial skills have a significant positive impact on business success. Findings of this research will help policymakers who are related to entrepreneurship development. They can organize programs to develop skills that were identified from this research which highly impact business success. The growth of SMEs can be accelerated by developing managerial knowledge and skills of the owners of the SMEs.