The IUP Journal of Entrepreneurship Development
The Impact of Training on Small and Growing Businesses
Article Details
| Pub. Date | : Dec, 2019 |
|---|---|
| Product Name | : The IUP Journal of Entrepreneurship Development |
| Product Type | : Article |
| Product Code | : IJED21912 |
| Author Name | :Suncan Pavlovic, Jermaine Coelho, John Olukuru |
| Availability | : YES |
| Subject/Domain | : Management Journals |
| Download Format | : PDF Format |
| No. of Pages | : 24 |
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Abstract
It is widely believed that Small and Growing Businesses (SGBs) have the potential to be global engines of shared prosperity: to drive growth, promote sustainability, and support equality around the world. This study looks at the effect of providing training to SGBs on their growth, profitability and employment creation. Data was collected from participants of the advanced entrepreneurship program at the Institute for Small Business Initiatives in Kenya. The study features the introduction of a new metric-Effective Cash at Owner's Disposal (ECOD)-which is critical in evaluating SGBs, especially in developing economies. The data was then compared as at the intake date, 1 year and 2 years after. The findings of the study show that the program has a significant positive effect on the businesses that went through it with average revenue increasing by 63%, average EBITDA increasing by 106% and 2.2 net new jobs created by each enterprise within a year of enrolment. The study also finds that the program year is characterized by strong revenue and profit margin growth, as well as relatively moderate employment growth due to the optimization effect. In the year after the program year, the positive trend continues (at a notably lower rate), but once the streamlining process is completed, the employment growth booms (doubling the growth rate from the first year). The study also reveals that remarkable improvement in understanding of finance is not matched by an equivalent improvement in cost optimization and record keeping. The introduction of a userfriendly IT tool for financial analysis and cost optimization is likely to greatly increase the effectiveness of such entrepreneurship programs and create longer lasting impact.
Introduction
In the modern world of business, the various types of leadership styles and the contributions it makes to the overall company performance have been well studied and documented. What we are faced with is a paradox as to the actual evidence of the impact that leadership makes on an organization (Mumford et al., 2007). At times, leadership itself is questioned (Vroom and Jago, 2007). In saying that however, not many will consider discarding the role and impact that leadership has altogether. Within organizations, leadership assumes a key role and is seen to be at its foremost within periods of change and transition (Uhl-Bien et al., 2007).
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