Proactive marketing and financial management for Small and Medium Enterprises

Abstract

Although the discovery of diamond has propelled Botswana from one of the poorest countries in 1966 to a middle-income developing nation, the country still faces the problems of economic diversification, employment creation, income generation and poverty alleviation. The main strategy to achieve these goals has been the promotion of entrepreneurship and small business development. In spite of the concerted efforts made to promote the development of Small and Medium Enterprises (SMEs), the small business failure is increasing at an alarming rate. This paper investigates the perceived impacts of marketing and finance on the development of SMEs in Botswana. 39 marketing and finance related problems were identified, largely from the small business literature, and the respondents were asked to rate the impact of these problems using a five-point scale. Principal component analysis with varimax rotation produced four critical factors (ie marketing actions, customer relationship, investment analysis and working capital management). These factors were also found to have a statistically significant relationship with firm specific demographic variables showing the need for comprehensive and flexible small business assistance programmes. The implications of the findings for policy makers, practitioners and researchers are also presented.