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【Abstract】Most of the small business in developing countries have not yet see their growth take off. The performance of small business is low those country especially in Togo. While existing studies often attribute the poor performance to factor outside firms, problem within firm are rarely closely examined. This article use a survey method to gather data from 50 small business owners and managers located in capital city of Togo. Several analyses were conducted to identify the critical success factors constraining the growth and survival of small business in Togo. The results of the study reveal that the most common constraints hindering small business growth and survival in Togo are lack of financial support, poor management, lack of training and experience and poor infrastructure. Understanding the factors impending the growth and survival of small business in Togo will help policy makers- government (local), to design targeted policies and programs that will actively stimulate innovation, as well as helping those policy makers to support, encourage, and promote small businesses for poverty alleviation in Togo. For small businesses this study offers alternative models to counteract the problem of Warranty and lending issues. Strategic alternatives on how to address issues such as poor management, access to finance, and poor infrastructure were suggested.
【Key words】Critical success factor;Small business;Business growth
0.Introduction
Currently many efforts have been done in Africa on encouraging new start-up enterprises, under structural adjustment program to reduce foreign debts. As state corporations are broken-up the politically acceptable alternative would be African-owned companies. In most sub-Saharan countries with weak business classes unable to launch large companies, African entrepreneurs must be contented from small beginnings.
Unfortunately, for many different reasons, the business environment in Togo has not been favorable to small business growth. In that, only few of them survive past their first 3 years after establishment. Research for this thesis has been done during august 2011 in Togo. In total 50 small business owners in a different activity sector were interviewed.
This research will discuss the nature and structure of the small business environment (or informal economy) in TOGO, the characteristics of the small business owners and small businesses, as well as the critical success factors that promote the growth challenges of entrepreneurial business in Togo. Lastly, the study will try to propose a solution to overcome those challenges. 1.Research findings
1.1 Characteristic of Small business in Togo
The study reveals that Togolese informal sector is the one that grouped small scale businesses due the lack of means to pay taxes and relevant fees related to the formal sector.
Another characteristic of small business in Togo is the use of the 4P’s of marketing by MICKAEL PORTER but with a very different characteristics like the negotiation of the prices, the location (usually on the side of a busy road close to home), lack of promotion due to the lack of fund and also the product are usually whatever they can get a decent price.
1.2 Level of success and growth of Small Business in Togo
All the small businesses don’t have the same level of growth or success. Some sectors have high level of success and growth than others. For example food preparation score high than the other in trade sector due to the fact that it addresses essential human needs which people cannot live without with. Apart from that the commerce sector also provides goods which are important to satisfy lower order needs or higher order needs according to the social class.
1.3 Critical success factors of Small Business in Togo
1.3.1 Personal Initiative
The researched showed us that entrepreneurs have high initiative that makes them to be able to stay very competitive on the market. Their motivation and desire to achieve their aims make them to take the real action, to be proactive and give them the courage to self –start and to overcome barriers in the aims to play a major role.
1.3.2 Gender
The factor gender is an important one in the Togolese business sector. The research shows us that most of the successful businesses in Togo are owned by the women.
1.3.3 Human capital
Human capital is one of the factors inhibiting the growth of the small business in Togo. When we talk about human capital we mean knowledge and capacity. We realize through this research that the educational level of most of the entrepreneur is very low (25%) and that inhibit the development of the business.
1.3.4 Limited Access to Capital/Credit
The interview realized showed us that most of the small businesses still do not have access to the capital they need to make their businesses growth. This due to the fact that many entrepreneurs misunderstand that the capital and credit options are available to them. Another reality is also that most of the entrepreneur don’t have the appropriate form of guarantee to have access to the loan offered by the microfinance institution existing. 1.3.5 Knowledge of the market
This factor is also very important in terms of products and services offered. The entrepreneurs should have a good understanding of their customers’ competitors’ suppliers etc… the survey realized showed us that despite the fact that most small business owners education level are very low they have a good knowledge of their market. Gained surely because, of their years of experiences in the market.
1.3.6 Level of differentiation
Only 7% of interviewed considered their business to be differentiate and most of them are the one involved in food preparation and commerce.
1.3.7 Level of diversification
Most of the interview considered diversification of product like a means to hedge their risk. Nevertheless, not all of them are able to afford the cost that generate. The problem is that, they don’t have enough capital to diversify by buying other product to sell.
1.3.8 Level of planning
We noticed that any of business owners has conducted formal market research, and just few of them have some knowledge in their operating sector at their beginning.
1.3.9 Access to resources and technologies
Adequate resources and technologies is also a success factor for small business. Actually many of the interviewees don’t have access to proper resources and technologies. So most of them have no option but to avoid the inefficient most of them use labor intensive manual process.
2.CONCLUSION AND SUGGESTIONS
Development and evolution in the Togolese small business have been slow. This is due to the nature of the economic external environment in Togo which is largely informal, characterized by limited growth, and dominates by the effects of poverty, as well as the limitations and constraints of individual small business, such us limitations and constraints include lack of training and knowledge of the markets, limited access to much needed capital, etc. Model testing revealed that personal initiative, know-how of the business and the past experience of the manager are the main key factors of success. but those like Human capital, Access to Capital/Credit, level of differentiation, level of diversification, level of planning and access to resources and technologies constituted the problems facing the small scale business for their growth and success. According to those problems a number of suggestion were proposed such as administration performance, financial performance, operating performance, strategic performance to make small business succeed and growth. SUGGESTIONS:
The findings revealed that a number of factors were responsible for small business failure in TOGO. To overcome the problem of small business we have suggest them toachieve:
·Administration performance: the country government and non-government organizations also have their part of responsibility in this part. They should think about organizing some management workshops and seminars to train the owners about personal and financial management, how to make a good business plan, basic accounting, marketing strategies and recordkeeping.
·Financial performance is also very important for small business in Togo. Owners should merge with others that have similar businesses, negotiate favorable credit purchases from the supplier, source affordable loans from financial institutions and negotiate advance payments from the clients.
·operating performance is also an important factor of success: business owner have to focus on the satisfaction of the customer on the quality and the availability of the product, benefit from growth in sales, try to gain a position on the market, expansion of the customer, ensure the continuous availability of their product, receive few complaints from the customers, be the best in its class in term of quality, be able to face the competition.
·Strategic performance for small business: business owners should achieve all we’ve suggested above without waste of resources and should be able to pursue others to expand its activities.
【References】
［１］Benzing, C.,Chu.,H.M., and Kara,O.(2009). Entrepreneurs in Turkey: A factor analysis of motivations, success factors, and problems. Journal of Small Business Management,47(1)：58-91．
［２］Boynlon, A.C.,and Zmud, R.W.1984."An Assessment of Critical Success Factors," Sloan Management Review (25:4)：17-27.
［３］Kiggundu, M.N.(2002),"Entrepreneurs and entrepreneurship in Africa: what is known and what needs to be done", Journal of Developmental Entrepreneurship, Vol. 7，No.3：56-67.
［４］Okpara, J.O., Wynn, P.(2007),"Determinants of small business growth constraints in a sub-Saharan African economy", SAM Advanced Management Journal, Vol. 72 No.2：24-35.
［５］Raduan Che Rose, PhD; Naresh Kumar, PhD; Lim Li Yen, the dynamics of entrepreneurs’ success factors in influencing venture growth Volume II, Issue 2, 2006 Journal of Asia Entrepreneurship and Sustainability.
［６］Scott Brunger, Survey of Small Business Owners in Togo,West Africa Using the Kirton Adaptor-Innovator Scale,USASBE 1997.
［７］Stefanovic, I., Prokic, S., Rankovic, L.(2010).Motivational and success factors of entrepreneurs: the evidence from a developing country. Zb. rad. Ekon. fak. Rij.·2010·vol. 28·sv. 2·251-269．
［８］Yaqub, M.Z, and Hussain, D.(2010). Micro-enterpreneurs: Motivations Challenges and Success Factors. International Research Journal of Finance and Economics.
［９］Yusuf, A., Schindehutte, M.(2000), "Exploring entrepreneurship in a declining economy", Journal of Developmental Entrepreneurship, Vol. 5 No.1.
［１０］Yusoff A (1995), Critical Success Factors for Small Business: Perception of South Pacific Enterprises. Journal of Small Business Management,33(3)：68-73.
［１１］Amanda Marie Vallone, a study of the success and failure of apparel entrepreneurs, August 2008.
［１２］Makgati Jacky Phaladi and Wellington Didibhuku Thwala(2009) critical success factors for small and medium sized contractors in north west province, South Africa.
【Key words】Critical success factor;Small business;Business growth
0.Introduction
Currently many efforts have been done in Africa on encouraging new start-up enterprises, under structural adjustment program to reduce foreign debts. As state corporations are broken-up the politically acceptable alternative would be African-owned companies. In most sub-Saharan countries with weak business classes unable to launch large companies, African entrepreneurs must be contented from small beginnings.
Unfortunately, for many different reasons, the business environment in Togo has not been favorable to small business growth. In that, only few of them survive past their first 3 years after establishment. Research for this thesis has been done during august 2011 in Togo. In total 50 small business owners in a different activity sector were interviewed.
This research will discuss the nature and structure of the small business environment (or informal economy) in TOGO, the characteristics of the small business owners and small businesses, as well as the critical success factors that promote the growth challenges of entrepreneurial business in Togo. Lastly, the study will try to propose a solution to overcome those challenges. 1.Research findings
1.1 Characteristic of Small business in Togo
The study reveals that Togolese informal sector is the one that grouped small scale businesses due the lack of means to pay taxes and relevant fees related to the formal sector.
Another characteristic of small business in Togo is the use of the 4P’s of marketing by MICKAEL PORTER but with a very different characteristics like the negotiation of the prices, the location (usually on the side of a busy road close to home), lack of promotion due to the lack of fund and also the product are usually whatever they can get a decent price.
1.2 Level of success and growth of Small Business in Togo
All the small businesses don’t have the same level of growth or success. Some sectors have high level of success and growth than others. For example food preparation score high than the other in trade sector due to the fact that it addresses essential human needs which people cannot live without with. Apart from that the commerce sector also provides goods which are important to satisfy lower order needs or higher order needs according to the social class.
1.3 Critical success factors of Small Business in Togo
1.3.1 Personal Initiative
The researched showed us that entrepreneurs have high initiative that makes them to be able to stay very competitive on the market. Their motivation and desire to achieve their aims make them to take the real action, to be proactive and give them the courage to self –start and to overcome barriers in the aims to play a major role.
1.3.2 Gender
The factor gender is an important one in the Togolese business sector. The research shows us that most of the successful businesses in Togo are owned by the women.
1.3.3 Human capital
Human capital is one of the factors inhibiting the growth of the small business in Togo. When we talk about human capital we mean knowledge and capacity. We realize through this research that the educational level of most of the entrepreneur is very low (25%) and that inhibit the development of the business.
1.3.4 Limited Access to Capital/Credit
The interview realized showed us that most of the small businesses still do not have access to the capital they need to make their businesses growth. This due to the fact that many entrepreneurs misunderstand that the capital and credit options are available to them. Another reality is also that most of the entrepreneur don’t have the appropriate form of guarantee to have access to the loan offered by the microfinance institution existing. 1.3.5 Knowledge of the market
This factor is also very important in terms of products and services offered. The entrepreneurs should have a good understanding of their customers’ competitors’ suppliers etc… the survey realized showed us that despite the fact that most small business owners education level are very low they have a good knowledge of their market. Gained surely because, of their years of experiences in the market.
1.3.6 Level of differentiation
Only 7% of interviewed considered their business to be differentiate and most of them are the one involved in food preparation and commerce.
1.3.7 Level of diversification
Most of the interview considered diversification of product like a means to hedge their risk. Nevertheless, not all of them are able to afford the cost that generate. The problem is that, they don’t have enough capital to diversify by buying other product to sell.
1.3.8 Level of planning
We noticed that any of business owners has conducted formal market research, and just few of them have some knowledge in their operating sector at their beginning.
1.3.9 Access to resources and technologies
Adequate resources and technologies is also a success factor for small business. Actually many of the interviewees don’t have access to proper resources and technologies. So most of them have no option but to avoid the inefficient most of them use labor intensive manual process.
2.CONCLUSION AND SUGGESTIONS
Development and evolution in the Togolese small business have been slow. This is due to the nature of the economic external environment in Togo which is largely informal, characterized by limited growth, and dominates by the effects of poverty, as well as the limitations and constraints of individual small business, such us limitations and constraints include lack of training and knowledge of the markets, limited access to much needed capital, etc. Model testing revealed that personal initiative, know-how of the business and the past experience of the manager are the main key factors of success. but those like Human capital, Access to Capital/Credit, level of differentiation, level of diversification, level of planning and access to resources and technologies constituted the problems facing the small scale business for their growth and success. According to those problems a number of suggestion were proposed such as administration performance, financial performance, operating performance, strategic performance to make small business succeed and growth. SUGGESTIONS:
The findings revealed that a number of factors were responsible for small business failure in TOGO. To overcome the problem of small business we have suggest them toachieve:
·Administration performance: the country government and non-government organizations also have their part of responsibility in this part. They should think about organizing some management workshops and seminars to train the owners about personal and financial management, how to make a good business plan, basic accounting, marketing strategies and recordkeeping.
·Financial performance is also very important for small business in Togo. Owners should merge with others that have similar businesses, negotiate favorable credit purchases from the supplier, source affordable loans from financial institutions and negotiate advance payments from the clients.
·operating performance is also an important factor of success: business owner have to focus on the satisfaction of the customer on the quality and the availability of the product, benefit from growth in sales, try to gain a position on the market, expansion of the customer, ensure the continuous availability of their product, receive few complaints from the customers, be the best in its class in term of quality, be able to face the competition.
·Strategic performance for small business: business owners should achieve all we’ve suggested above without waste of resources and should be able to pursue others to expand its activities.
【References】
［１］Benzing, C.,Chu.,H.M., and Kara,O.(2009). Entrepreneurs in Turkey: A factor analysis of motivations, success factors, and problems. Journal of Small Business Management,47(1)：58-91．
［２］Boynlon, A.C.,and Zmud, R.W.1984."An Assessment of Critical Success Factors," Sloan Management Review (25:4)：17-27.
［３］Kiggundu, M.N.(2002),"Entrepreneurs and entrepreneurship in Africa: what is known and what needs to be done", Journal of Developmental Entrepreneurship, Vol. 7，No.3：56-67.
［４］Okpara, J.O., Wynn, P.(2007),"Determinants of small business growth constraints in a sub-Saharan African economy", SAM Advanced Management Journal, Vol. 72 No.2：24-35.
［５］Raduan Che Rose, PhD; Naresh Kumar, PhD; Lim Li Yen, the dynamics of entrepreneurs’ success factors in influencing venture growth Volume II, Issue 2, 2006 Journal of Asia Entrepreneurship and Sustainability.
［６］Scott Brunger, Survey of Small Business Owners in Togo,West Africa Using the Kirton Adaptor-Innovator Scale,USASBE 1997.
［７］Stefanovic, I., Prokic, S., Rankovic, L.(2010).Motivational and success factors of entrepreneurs: the evidence from a developing country. Zb. rad. Ekon. fak. Rij.·2010·vol. 28·sv. 2·251-269．
［８］Yaqub, M.Z, and Hussain, D.(2010). Micro-enterpreneurs: Motivations Challenges and Success Factors. International Research Journal of Finance and Economics.
［９］Yusuf, A., Schindehutte, M.(2000), "Exploring entrepreneurship in a declining economy", Journal of Developmental Entrepreneurship, Vol. 5 No.1.
［１０］Yusoff A (1995), Critical Success Factors for Small Business: Perception of South Pacific Enterprises. Journal of Small Business Management,33(3)：68-73.
［１１］Amanda Marie Vallone, a study of the success and failure of apparel entrepreneurs, August 2008.
［１２］Makgati Jacky Phaladi and Wellington Didibhuku Thwala(2009) critical success factors for small and medium sized contractors in north west province, South Africa.