Effects of Business Development Services on the Performance of Small and Medium Size Enterprises in Ellembelle District, Ghana

Abstract

The study looked at the effects of business development services on performance of small and medium sized enterprises in Ellembelle District. A variety of factors inhibit the development of small and medium sized enterprises in African countries, which in turn affects entrepreneurship, job creation and economic transformation. Using cross-sectional data from 250 small and medium sized enterprises in Ellembelle District. The study found in most of the examined variables the positive relationship between the use of business support services and the performance of small and medium sized enterprises in Ellembelle District. However, contrary to expectations, building business linkages and mentoring programs recorded negative relationships with performance of small and medium sized enterprises. This is related to restricted capacities stemming from the size of small and medium sized enterprises compared to large companies and deficiencies in the content of mentoring programs. In addition, the discrepancy between business support services demand and supply as well as the low adoption rate of business support services are associated with the inadequate adaptation of business support services to the needs of small and medium sized enterprises, high service costs and a lack of qualified service providers. Thus, the researcher argue that the provision of business support services to small and medium sized enterprises should be demand-driven and that institutions should build on the pre-eminent characteristics of small and medium sized enterprises when designing business support programs.