Abstract
This study aims to experimentally analyse how start-up awareness, management skills, and financial providers’ requirements relate to the key drivers of business success. A framework has been developed to increase start-ups’ capacity to obtain external financing (Bamata, 2019). Data were collected by a simple random sample from a survey of 253 SMEs in Pietermaritzburg, South Africa. Data analyses from the questionnaire using the statistical program SmartPLS were carried out utilizing descriptive and inferential analyses and structural equation modelling. It was shown that start-up awareness and management skills positively affect SMEs’ access to government, corporate, and personal/social sources of financing. Seven hypothetical connections were evaluated, and the results were obtained. The suggested framework maps the entrepreneurial awareness and management abilities of a start-up entrepreneur with funding provider needs and gives an idea of the type and optimum funding choices to be applied for the company (Bamata, Govender, & Fields, 2019). By utilising this framework, SME owner-managers would become aware of their financing needs and be ready to choose the most suitable source of external finance.
Highlights
The critical role of SMEs in economic growth has been acknowledged in most countries’ SMEs (Lekhanya, 2016)
The analyses have tested the applicability of each business success factor on accessing different sources of SME financing and the results are shown in Tables 3, 4, 5, and 6; and ascertain that all business success factors do not have the same influence on different sources of SME financing
The findings show that the exogenous constructions linked to the awareness of beginning are Start-up awareness (SUA) — the difference accounted for 59.8% of management skills (MS), while the variances for government finance (GF), corporate finance (CF), and personal and social finance (PSF) represented 5.3%, 14%, and 17.9% in this construct’s variance
Summary
The critical role of SMEs in economic growth has been acknowledged in most countries’ SMEs (Lekhanya, 2016). The World Bank Task Team (The World Bank, 2017) has described a range of reasons, which are known as limitations for start-up SMEs to access foreign funding to illustrate the difficulties that start-up SMEs face in accessing external financing. Factors such as the absence of finance skills, the abuse of financial industries, the asymmetry of intelligence, and the high risk of lending to start-ups included (Osano & Languitone, 2016; Zondi, 2017).
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