Impact of Managerial and Entrepreneurial Skills on the Success of Small and Medium Enterprises in North Western Province, Sri Lanka

Abstract

Small and medium enterprises (SMEs) act as a useful vehicle for economic growth because they have the capacity to achieve rapid economic growth while generating considerable employment opportunities. However, SMEs are heavily criticized due to their high failure rate. It is important to study the factors that contribute to the success of entrepreneurs, so they can be emulated. As highlighted in many studies, lack of managerial knowledge and skills hamper the rapid growth of the SME sector. This research attempts to investigate the impact of managerial and entrepreneurial skills on the success of SMEs in the North Western Province in Sri Lanka. Simple random sampling was employed to select 129 SMEs as the sample. A questionnaire was distributed among owner–managers of these businesses to collect data. Conceptual, human and technical skills were considered as managerial skills, and entrepreneurial skills were also analyzed. Owners’ satisfaction with the financial and non-financial success of the enterprise was selected to measure business success. The study revealed that technical and entrepreneurial skills have a significant positive impact on business success. The findings can help policymakers who are connected to entrepreneurship development. They can organize programs to develop skills identified by this research that positively impact business success. The growth of SMEs can be accelerated by developing owners’ managerial knowledge and identified skills.