Effects of Risk Taking on the Market Share of SMEs in Ado-odo/Ota, Local Government Area, Ogun State, Nigeria

Abstract

In Nigeria, small and medium‐sized businesses are often regarded as a powerful engine for economic growth and development. Small businesses must take measured risks in order to grow their market share. For SMEs to build a robust market share there is need for calculated risk taking. Hence, this study examined the effect of risk taking on market share of selected SMEs in Ado‐odo/Ota, Ogun state. This survey included 153 respondents who were either firm owners, managers, supervisors, or employees of selected SMEs. The frequency distribution table and the multiple regression technique were used in SPSS version 23 for the analysis. According to the findings, more than half of the SMEs (115, 77.2 %) have only been in business for less than five years and are predominantly (52, 34.9%) in the age range 33‐37. The data also demonstrate that there is a link between taking risks and a small business's market share. The R‐value was 0.58, indicating that the risk indicators used in the study explained 58 % of the variation in the outcome variable. The F‐statistic was 18.3; P=0.000, according to the ANOVA table. This suggests that the four risk indicators have a huge impact on market share when taken together. Among the four factors, willingness to pursue a promising new strategy (t-statistic= 7.8; p 0.01) and ability to foster a risk‐taking culture in the workplace (t‐statistic = 2.2; p0.05) had the greatest impact on employee satisfaction.