Effects of Risks on Growth of Small Enterprise Start Ups in Nakuru Town, Kenya
Micro and small enterprises have been used as a tool for economic development in a variety of developing regions. In many of these regions, with less developed financial sectors, new ventures plays a role in facilitating access to finance to small enterprises, which in most cases would not qualify for receiving bank loans. However, there are various risks which are associated with start up. Therefore, it was necessary to carry out a study on how star up risks affect growth of small enterprises. It was guided by the constructs of product risks and technological risks. This study is of importance to small enterprises since they will be able to manage risks and improve growth of their entities. The research was carried out in Nakuru town and involved 86 small enterprises whereby census technique was applied. However, 78 of them were accessible and were used in the study. Descriptive survey design was applied and data was collected by use of structured questionnaires. It was analyzed by both descriptive and inferential methods. Measures of central tendency involving means and measures of variation incorporating standard deviations helped to describe the effects of new ventures risks. Pearson correlation coefficient indicated the relationship between each independent variable and the dependent variable. Findings were presented by statistical tables. It was found that the association between products and technological risks with growth of SMEs was positive and statistically significant at 0.01 level of significance thus risks and risk management practices influenced growth of new ventures. The study recommends that enterprises should have proper risk assessment so as to deal with startup risks. Also the government should provide support on enterprise risk management besides other supports.
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