ON FACTORS AFFECTING PERFORMANCE OF SMALL BUSINESS,IN SOUTHERN ETHIOPIA REGION IN WOLAITA ZONE SODO ZURIA WOREDA

Abstract

This study was conducted to examine the factors influencing the performance of small businesses in Sodo Zuria Woreda, Wolaita Zone, Southern Ethiopia. The research employed a mixed-methods approach, combining quantitative and qualitative data collection techniques. Primary data were gathered through structured questionnaires administered to 82 small business operators, selected using simple random sampling from two kebeles (Shola Kodo and Tome Gerera). Additionally, key informant interviews were conducted with relevant stakeholders. The collected data were analyzed using both descriptive and inferential statistics. Descriptive statistics (means, frequencies) summarized the characteristics of respondents, while multiple linear regression analysis identified significant factors affecting business performance. The study revealed that access to finance, managerial skills, education level, working premises, and access to business development services significantly influenced small business performance. Notably, age showed a negative correlation with business success, while gender was found to be statistically insignificant. The findings indicate that inadequate access to capital, poor infrastructure, and limited managerial capacity remain critical challenges. Based on these results, the study recommends that financial institutions develop tailored loan products for small businesses, local governments improve infrastructure development, and business support organizations enhance training programs in essential managerial skills. These interventions could significantly improve the performance and sustainability of small businesses in the study area, contributing to local economic development and poverty reduction.