Determinants of the Business Performance  
of Small and Medium Enterprises  
in an Emerging Market Economy 
 
Peter Ansu-Mensah 
Sunyani Technical University, Ghana 
p.ansumensah@stu.edu.gh    
Paul Adjei Kwakwa  
Presbyterian University College, Ghana 
University of Energy and Natural Resources, Ghana 
pauladkwa@yahoo.com       
 
Sandra Nyamedor Teye Maku 
Presbyterian University College, Ghana 
 
Purpose: In a developing country such as Ghana, small and medium enterprises 
(SMEs) have become the fulcrum for economic growth and development. This study 
aims to examine factors influencing the business performance of SMEs in an 
emerging market economy.  
Study design/methodology/approach: A descriptive survey design was used to 
collect data from SMEs in the service sectors of retail, hospitality, trade/commerce 
and manufacturing. The target population were from two municipalities. SPSS 23.0 
was used to analyse the data got through the use of the questionnaires.  
Findings: The results indicate that governments in emerging economies are not doing 
enough to help SMEs. Access to credit had aided businesses to acquire modern 
technologies and raw materials for operation. Many entrepreneurs used their 
educational level, available business information services and marketing strategies to 
identify potential customers and to devise better strategies for dealing with their 
competitors.   
Originality/value: The study is the first to conclude that while access to credit aids 
SMEs’ in their operations, it can equally serve as a constraint to their performance. 
Besides, availability of business information service can help SMEs to gain 
competitive advantage. Moreover, marketing strategies impact SMEs performance 
positively. The study will help policy makers and development partners to fashion 
policies that will enhance the performance of SMEs. 
Keywords: SMEs, determinants, business performance, emerging market economy, 
government, Ghana. 
Introduction  
Small and medium enterprises (SMEs) indeed play significant roles in the economy of 
developed and developing nations (Herr & Nettekoven, 2018; Khan et al., 2020; Muzenda, 
2014).The SMEs capability to provide employment to boost an economy makes it an important 
sector that attracts various governments worldwide, and more specifically, in 
emerging/developing economies (Anigbogu, Onwuteaka, Edoko, & Okoli, 2014; Keskin, 
Sentürk, Sungur, & Kiris, 2010; Laurențiu, 2016; Zdraveski, Janeska, Sotiroski, & Kukunoski, 
2018). To understand the determinants of the performance of SMEs will not only assist 
individuals and businesses to be profitable, but also help in the socio-economic development of 
most countries thereby enabling them to generate jobs for the citizenry (Herr & Nettekoven, 
2018; Keskin et al., 2010; Zdraveski et al., 2018).  
There are various definitions of SMEs and it is noteworthy that these definitions have come 
about due to the economic sizes of nations across the world. Thus, while many countries use 
the number of employees/workforce as a yardstick in the attempt to define SMEs, others rely 
International Journal of Management, Knowledge and Learning | ISSN 2232-5697
                    Volume 10 (2021) 219–233 | https://www.doi.org/10.53615/2232-5697.10.219-233
on turnover (Keskin et al., 2010). According to Rasoli & Mirza (2019:99), the World Bank 
Group currently defines SMEs as “encompasses enterprises with up to 300 employees and total 
annual sales of up to US$15 million”. Equally, the body that regulates SMEs in an emerging 
economy Ghana, the National Board for Small Scale Industries (NBSSI) defines SMEs as 
businesses that are capable of employing more than 9 persons with fixed assets of 10 million 
Ghana cedis (Abor & Quartey, 2010; Akorsu & Agyapong, 2012; Domeher, Musah, & Hassan, 
2017). It is worth emphasizing that what is common about the above definitions relate to the 
number of people employed. Consequently, the NBSSI working definition has been adopted 
for this study because it is the body that regulates SMEs activities in Ghana. 
The important roles performed by SMEs in both developed and developing economies are 
enormous. SMEs are gradually being acknowledged as dynamic drivers of economic growth 
and development in Africa as well as globally (Abisuga-oyekunle, Patra, & Muchie, 2020; 
Afolabi, 2015). SMEs help with the social and economic development of a country which 
includes employing people, alleviating poverty (Akorsu & Agyapong, 2012; Ibrahim & 
Mustapha, 2019; Mutandwa, Taremwa, & Tubanambazi, 2015b; Muzenda, 2014), and 
development of human resource and contribution to gross domestic product (Akorsu & 
Agyapong, 2012; Mutandwa et al., 2015b; Nunkoo et al., 2020). The economic growth in 
Germany, China, Japan, Taiwan, Malaysia, Nigeria, Kenya and many others are considerably 
impacted by SME activities. With regard to SMEs contribution to GDP, Agyapong, Agyapong, 
& Poku (2017) and Peris, Supian, Hasanat, & Hossain (2020) revealed the following; Germany 
(75%), China, (60%), Japan (50%) and Bangladesh (25%).  
Conversely, despite their significance and contribution to the development of countries, SMEs 
are faced with myriad of problems among which are insufficient funding or lack of credit, 
managerial skills deficiencies, lack of raw materials, managerial inadequacies and bigger 
transaction charges (Abisuga-oyekunle et al., 2020; Akorsu & Agyapong, 2012; Mutandwa et 
al., 2015b; Nunkoo et al., 2020).     
Ghana is an emerging country in sub-Saharan Africa (SSA) region with a projected population 
of 30.42 million, with about 12.84 million as its total workforce  (Ansu-Mensah et al., 2021; 
Ghana – Total Labor force, 2019; World Population Review, 2019). In Ghana, SMEs have 
become the fulcrum for growth and development. According to scholars such as, Abor & 
Quartey (2010); Adongo, Atugeba, & Insah (2020); Sarbah & Wen (2014) and Setsoafia, 
Sarpong, & Kwadzo (2013), SMEs make an estimated contribution of 60-70% to Ghana’s GDP 
and therefore, they generate so much revenue annually to assist the government of Ghana. 
Outstandingly, the crucial role played by SMEs in the development of Ghana’s economy cannot 
be overstated. It is no wonder that the government of Ghana has fashioned policies to support 
SMEs so that they can continue to contribute their quota to the economic development of the 
country thereby performing starring roles such as; offering employment, poverty reduction, 
human resource development, and contributing to GDP. In spite of the foregoing government 
efforts, various SMEs are not able to improve on their performances and that their rate of failure 
is on the high. Furthermore, most research on the performance of SMEs has been done in 
developed economies. Therefore, a study on factors influencing the growth and business 
performance of SMEs in an emerging economy is an area of necessity and worth studying in 
the small business literature. 
Against this backdrop, the study aims to examine the factors influencing the business 
performance of SMEs in an emerging market economy. Consequently, the study will seek to 
answer the research question: what factors influence the business performance of SMEs in 
Kwahu East and Kwahu West Municipalities of the Eastern Region in Ghana? 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 220
The important contributions of this research will be as follows: first, the study’s findings will 
be vital to owners of SMEs in Ghana as well as other emerging market economies as the 
findings would support them to identify and cope with factors that influence the business 
performance of SMEs. Second, this study adds to the literature by considering factors that 
impact SMEs’ performance in emerging economies. Third, the study will help policy makers 
and development partners to fashion policies that will enhance and better the performance of 
SMEs. Again, the findings can be used by the government of Ghana and other developing and 
developed nations to advance their socio-economic development programs thereby helping 
them achieve their strategic visions in the foreseeable future. Moreover, development partners 
will equally find this study useful in developing programs for funding of activities for 
improving the performance of SMEs. Furthermore, this study will contribute to the scholarly 
dialogue regarding SMEs in emerging economies and will be important to future researchers 
who may want to use it as a reference document. 
The rest of this paper is structured as follows. The next section is on literature review which 
culminates in constructing the research model. The research methodology, results, discussions 
and conclusions follows subsequently.     
Literature Review 
Measuring Business Performance of SMEs 
Business performance is undeniably open to different dimensions and interpretations in the 
business arena. These diverse dimensions of the concept business performance comprise 
employee numbers, profitability, and sales (Muzenda, 2014). Performance measurement is the 
assessment of the extent to which businesses could be managed and what they offer to their 
customers and interested parties (Aziz & Mahmood, 2011; Mwihaki, 2015; Oyedele et al., 
2014; Vuolle, 2011). Researchers such as, (Bhagwat & Sharma, 2007; Mwihaki, 2015) have 
argued that SMEs can measure their business performance through the use of financial and 
nonfinancial processes which is of three perspectives (i.e., financial perspective, internal 
business perspective and customer perspective).  
Financial Perspective 
The performance of many organizations is measured on the basis of the firms’ market value, 
liquidity, investments, and profits (Neely, 2002; Neely & Austin, 2004). As organizations aim 
to be profitable, it behoves on them to ensure that the goals they set are achieved. If they 
succeed, then they are adjudged to be a performing business else the vice versa holds (Neely & 
Austin, 2004).  
Internal Business Perspective 
This perspective works on the premise that organizations should display both efficiency and 
effectiveness in their day-to-day activities in order to please their customers (Yang & Islam, 
2012). This, in so doing, enables the businesses to provide goods or services that customers will 
be satisfied with while the company too makes profit. 
Customer Perspective 
As one of their main aims, SMEs satisfy their customers through the provision and delivery of 
products or services on timely basis (Parry, Jones, Rowley, & Beata, 2012; Vuolle, 2011). 
Achieving such an aim suggest that the organization’s performance is high, whereas, not being 
able to realize that aim implies that the performance level has been lowly (Mwihaki, 2015; 
Otero, Gallego, & Pratt, 2014; Parry et al., 2012). 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 221
Determinants Influencing the Performance of SMEs 
Government policies and regulations on the performance of SMEs 
It is imperative for governments that intend to promote small enterprises to scrutinize the effect 
of its rules and procedures on small companies (Matovu, 2011). If proper care is not taken, 
policy initiatives of governments might destroy the small businesses. Though it is a known fact 
that SMEs role in the development of any economy is huge, yet little has been done to assist 
them perform such significant roles. In fact, mention can be made of countries such as India, 
which has come out with favourable actions to promote SMEs so that they can perform their 
duties effectively to aid the economy (Vettriselvan & Sathya, 2018; Xavier & Gomez, 2018). 
The government of Ghana also came up with reforms in 1992 to strengthen the private sector 
(Aryeetey & Ahene, 2005) 
Access to credit on the performance of SMEs 
Among the various limitations that SMEs encounter, finance is the overwhelming imperative 
of all. Inability to get funds/credit for raw materials purchases is really the sole problem of 
SMEs (Kayanula & Quartey, 2000). In their study on SMEs, Aryeetey & Ahene, (2005) 
revealed that 38% of SMEs identified funding as the main restriction and that SMEs have 
restricted admittance to capital markets. In sub-Sahara Africa, several small businesses do not 
make it past the initial stage because of governments and commercial banks inability to grant 
them credits (Abor & Biekpe, 2007; Kayanula & Quartey, 2000; Opoku-Afriyie, 2019). 
According to Kayanula and Quartey, (2000); and Opoku-Afriyie, 2019), the issue of financing 
facing small firms have fundamentally blocked the role these SMEs can play in socio-economic 
developments.  
Availability of business information service on SMEs performance 
It is reported that in order for SMEs in emerging market nations to promote sustainable levels 
of development, availability of business information services should be considered by 
governments and business services suppliers (Ngetich & Kithae, 2020; Ojo, Akinsunmi, & 
Oluwatimilehin, 2015). Numerous SMEs in developing countries work in situations where 
information is inadequate mainly because of insufficient business bolster services and lowly 
information technological foundations (Adeola, 2014). According to Kauffmann, (2005), 
access to information has in a way not been given a much consideration as limitations to the 
improvement in SMEs performance. In advanced nations, SMEs have easy access to business 
information services because of well-developed ICT infrastructure (Ganbold, 2008), while in 
emerging market economies, numerous difficulties exist with respect to ICT infrastructure, 
equipment and programming. And this has increased the problems for the SMEs sector 
especially in the area of business information services (Mutandwa et al., 2015b).  
Entrepreneurs’ characteristics on the performance of SMEs 
Numerous studies have looked at the connection between the attributes of the entrepreneur and 
the firm’s performance  (Islam, Khan, Obaidullah, & Alam, 2011; Oyedele et al., 2014; Širec 
& Močnik, 2010). Storey (2011, p.307)  has concluded that gender, age, education, motivation 
and past work experience are the elements which will probably influence the performance of 
the firm.  Regarding the entrepreneur’s gender, Opoku-Afriyie, (2019) and Philip (2010) 
announced that some SMEs firms that are led by men will undoubtedly perform superior to 
those by women. With the age of the entrepreneur, the more youthful the entrepreneur is the 
more energetic and committed to the work and will likely accept risk than older entrepreneurs. 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 222
With regards to education, the fact that a business owner has higher educational levels may 
inspire growth and the firm’s performance (Neneh, 2011).  
Therefore, Gunawan, Jacob, & Duysters (2016) reported that such people might not be qualified 
to perform management roles for the businesses. It is no wonder that (Ibrahim & Mustapha, 
2019; Mutandwa et al., 2015b; Muzenda, 2014) did not find any correlation between previous 
SMEs experiences and firm’s performance. Similarly, experience impact the performance of 
the firm (Barreira, 2004; Pena, 2004; Peña, 2002; West & Noel, 2009).  
Marketing strategies impact on the performance of SMEs  
It is important to note that marketing strategies indeed influence the business performance of 
SMEs (Ibrahim & Mustapha, 2019; Mutandwa et al., 2015b; Muzenda, 2014; Tang, Wang, & 
Zhang, 2007). Marketing strategies stipulate passages that marketing departments in firms take 
to realize their marketing aims (Wilson & Gilligan, 2005). These strategies are the various 
business activities that are planned and produced and are related to pricing and the eventual 
formation of SMEs competitive policies (Dzisi & Ofosu, 2014; Keh, Nguyen, & Ng, 2007). 
Marketing strategies aid in the achievement of business successes, hence, its influence on 
performance of SMEs cannot be over-emphasized (Amin, 2021). How firms frame and 
implement their marketing strategies impact the extent to which they can be successful or 
unsuccessful (Finoti et al., 2017). It is therefore necessary for various educational campaigns 
to be developed so as to encourage the implementation of the marketing strategies (Tang et al., 
2007).  
[ 
With regard to the reviewed literature above, a model is proposed with the variables: 
government policies and regulations, access to credit, availability of business info, 
entrepreneurs’ characteristics, marketing strategies and factors influencing SMEs performance.  
See Figure 1.  
 
          
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 1: Research Model 
 
Government 
Policies & 
Regulations 
Access 
to 
Credit 
Availability of 
Business Info 
Entrepreneurs’ 
Characteristics 
Marketing 
Strategies 
Factors Influencing 
SMEs Performance 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 223
Methodology 
Research Design  
A descriptive survey design was used in this study to examine the determinants of business 
performance of SMEs in an emerging market economy such as Ghana. Descriptive surveys 
enable the collection of data from big samples and for generalizations to a bigger population 
and thus help in the analysis and determination of individuals’ views, behaviours and attitudes 
(Creswell, 2009; Leavy, 2017).  
Sample and Sample Size  
The target population consisted of SMEs working in Kwahu West Municipal Assembly with 
its capital at Nkawkaw and Kwahu East District with the district capital at Abetifi. The sample 
was chosen from the manufacturing, retail (trade & commerce), hospitality and agriculture 
informal service sectors. This population is chosen because they are from the most 
business/commercial areas in the Eastern region of Ghana. It is notable that there was no precise 
number for the population of SMEs since most of the businesses in the two districts were not 
registered. Therefore, in this study, the researchers used convenience sampling to select the 
sample size of fifty-five SMEs, thirty from Kwahu West district and twenty-five from Kwahu 
East district. Besides, the respondents in the study were carefully chosen due to their readiness 
and availability. Moreover, the respondents’ ages extended from 20 to 61 plus. 
Procedures 
Convenience sampling was used to select the respondents of SMEs in the service sectors of 
retail, hospitality, trade or commerce, and manufacturing. It is worth mentioning that 
convenience sampling was used because there were no official records of the population of 
SMEs, as most of these SMEs prior to their setting up had not registered with the two district 
assemblies. However, further enquiries from the district assemblies revealed that the 
assemblies’ local instruments enjoin all SMEs to register before the start of their businesses. 
Initially, 80 structured questionnaires were given out but we received 55 usable ones and this 
represented a response rate of 68.8% (see Table 4.1). 
Measures 
The measurement items used in the study were 5-point Likert type scale which ranged from 1: 
strongly disagree, 2: disagree, 3: neutral, 4: agree and 5: strongly agree. Using the above scale, 
respondents were requested to point out their agreement levels on the questionnaire items. The 
variables were; government policies and regulations, access to finance, availability of business 
information, entrepreneur’s characteristic and marketing strategies and performance of SMEs.   
Data analysis  
The statistical package for social science (SPSS 23.0) was used to analyse the data got through 
the use of the questionnaires. .  
Findings and Discussion 
Findings 
Demographic profile of respondents 
In the analysis of the demographics respondents’ gender, age, level of education and nature of 
business have been discussed below. 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 224
Table 4.1: Demographic profile of respondents  
Item Category Frequency Percentage 
Gender Male 33 60 
 Female 22 40 
Age 20–30 24 43.6 
 31–40 12 21.8 
 41–50 8 14.5 
 51–60 8 14.5 
 61+ 3 5.5 
Education background Junior High School 3 5.5 
 Senior High School 22 40.0 
 Tertiary 30 54.5 
Nature of business Beauticians 9 16.4 
 Restaurants 13 23.6 
 Hotels 12 21.8 
 Fashion designers 9 16.4 
 Grocery shops 12 21.8 
Out of the 55 sampled respondents, 22 (40%) were females, while 33 (60%) were males. Again, 
Table 4.1 illustrates the ages of the respondents. Twenty-four (43.6%) respondents were 
between the ages of 20-30 years, 12 (21.8%) were between 31-40 years, 8 (14.5%) were 
between the ages of 41-50 years, another 8 (14.5%) fell between 51-60 years and 3 (5.5%) were 
between the ages of 61 and above. The highest percentages of respondents were those between 
the ages of 20-30 years whereas the lowest percentages of respondents were between 61+ which 
again suggests that these SME businesses are full of the youth of the country. 
With reference to the educational backgrounds of respondents, majority had tertiary education 
(54.5%) and the lowest qualification was basic education. With regards to the nature of business 
of the respondents, 9 (16.4%) were beauticians, 13 (23.6%) were into restaurant business, 12 
(21.8%) were in hotel services, 9 (16.4%) were fashion designers and 12 (21.8%) were grocery 
shop owners.  
Influence of Government Policies and Regulations on the Performance of SMEs 
Respondents were asked to indicate the degree to which they agree with statements below that 
highlight government policies and regulations influence on SMEs performance. 
 Table 4.2: Government Policies and Regulations Influence on SMEs Performance 
Do you think the local assembly is doing anything special to help the SMEs 
in your locality? 
Frequency Percentage 
Yes 11 20.0 
No 44 80.0 
Looking at Table 4.2 above, the findings indicate that the government is not really doing enough 
to support the SMEs. Again, the findings indicated that it is not just the government who is not 
helping but that most SMEs are also not playing their part to help.  
Influence of Access to Finance on the Performance of SMEs 
Respondents were asked to indicate the degree to which they agree with statements below which 
focus on how access to credit influences SMEs performance. 
Table 4.3: Access to Finance on the Performance of SMEs 
Statement SD 
F(%) 
D 
F(%) 
N 
F(%) 
A 
F(%) 
SA 
F(%) 
Access to finance has aided my business acquire 
certain raw materials needed for operation. 
4(7.3) 10(18.2) 17(30.9) 19(34.5) 5(9.1) 
My business is able to pay off its workers due to 
access to finance.  
3(5.5) 8(14.5) 14(25.5) 23(41.8) 7(12.7) 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 225
My business has acquired modern technologies 
which have affected its production positively due 
to access to finance. 
5(9.1) 12(21.8) 9(16.4) 22(40,0) 7(12.7) 
Access to finance has helped my business expand 
due to new strategies adopted. 
3(5.5) 18(32.7) 18(32.7) 12(21.8) 4(7.3) 
The above table indicates that 7.3% strongly disagreed, 18.2% respondents disagreed, 30.9% 
were neutral, 34.5% agreed and finally 9.1% strongly agreed on the fact that access to finance 
had aided their businesses in acquiring raw materials for operation. Also, businesses were able 
to pay their workers due to access to finance. This is illustrated that 23 (41.8%) and 7 (12.7%) 
agreed and strongly agreed respectively to the statement. Moreover, on whether acquiring or 
purchasing modern technologies has affected SMEs positively and hence improved their 
performance level due to access to finance; the result showed that just few businesses had access 
to finance to acquire certain technologies that helped improved their production. Furthermore, 
majority of respondents (32.7%) agreed that access to finance has helped their businesses 
expand due to new strategies adopted, but further 36.4% remained neutral.  
Influence of Availability of Business Information Service on SMEs Performance  
The study tries to find the limit to which respondents were in agreement with the statements on 
the influence of business information services availability on SMEs Performance. The result is 
indicated below:  
Table 4.4: Availability of Business Information on the Performance of SMEs   
Statement SD 
F(%) 
D 
F(%) 
N 
F(%) 
A 
F(%) 
SA 
F(%) 
Business information helps me devise better 
strategies for dealing with competitors. 
2(3.6) 7(12.7) 14(25.5) 26(47.3) 6(10.9) 
With business information, my business is 
able to identify potential customers and 
develop a business relationship with them. 
1(1.8) 5(9.1) 11(20.0) 24(43.6) 14(25.5) 
An information in my business helps in 
decision making and solving problems. 
0 5(9.1) 13(23.6) 23(41.8) 14(25.5) 
Information on strength, weakness, 
opportunity and threat about my business has 
helped me to know the internal and external 
position of the business hence; I am able to 
secure my business. 
2(3.6) 2(3.6) 11(20.0) 26(47.3) 14(25.5) 
Many respondents agreed, 26 (47.3%), and strongly agreed, 6 (10.9%), that businesses operate 
with information to help devise better strategies for dealing with their competitors. Also, access 
to information has helped businesses identified potential customers and developed a business 
relationship with them. This basically shows that majority of the SMEs agreed to the fact that, 
having information about their customers is one of the key things they need not miss when it 
comes to business. This helps them identify what their customers’ need. With this, they are able 
to establish a good relationship with them and do not lose them to other competitors. With 
regards to whether business information has aided in decision making and solved problems, 
respondents agreed (41.8%) and strongly agreed (25.5%). The respondents further indicated 
that the source of business information that helped in decision making in the business were 
internet, suppliers, customers, newspapers and magazines and seminars. Similarly, Table 4.4 
shows that many SME firms agreed that strength, weakness, opportunity and threats have 
helped them to identify and understand key issues affecting businesses. In brief, they are able 
to understand their businesses better, address weaknesses that may arise, deter threats, identify 
and capitalise on opportunities and take advantage of their strengths to develop business goals 
and strategies for achieving them.  
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 226
Influence of Entrepreneurs Characteristics on the Performance of SMEs 
Various statements on how entrepreneurs’ characteristics impact the performance of SMEs 
were asked. Below are the responses that were gathered. 
Table 4.5: Entrepreneurs Characteristics on the Performance of SMEs  
Statement  SD 
F(%) 
D 
F(%) 
N 
F(%) 
A 
F(%) 
SA 
F(%) 
Being persuasive in my business has helped me 
reach out to greater number of customers and 
that has increased my sales for the last four 
months. 
1(1.8) 7(12.7) 18(32.7) 24(43.6) 5(9.1) 
My business has been running successfully due 
to the passion and confidence I have in it. 
1(1.8) 0 12(21.8) 30(54.5) 12(21.8) 
Past experience has helped me do things better 
in my business. 
1(1.8) 2(3.6) 12(21.8) 19(34.5) 21(38.2) 
Having a strong vision or being goal oriented 
has helped me achieve greater success in my 
business. 
1(1.8) 
 
 
3(5.5) 
 
13(23.6) 
 
 
33(60.0) 
 
 
5(9.1) 
My level of education has helped me adopt 
certain strategies that enable my business gain 
competitive advantage. 
2(3.6) 2(3.6) 10(18.2) 21(38.2) 20(36.4) 
On whether SME firms are persuasive enough to reach out to greater number of customers, 24 
(43.6%) agreed and 5 (9.1%) respondents strongly agreed. On whether SME firms success is 
based on the passion and confidence owners have in it, 21.8% of the respondents strongly 
agreed and 54.5% respondents agreed. Meanwhile no respondent disagreed to this statement. 
When asked whether past experience has helped their businesses perform better, 34.5% agreed 
and 38.2% respondents strongly agreed. Thus, the majority of firms said past experience has 
helped them to correct mistakes from the previous work experience and made things better for 
their performance. However, for the least who disagreed said past experience does not really 
inspire their business career in the future.   
With regards to whether having strong vision or being goal oriented has helped SMEs or guided 
them achieve greater success in their business, majority of 60% agreed and 9.1% strongly 
agreed. The above table indicates that, many SME firms are focused on moving forward, since 
they are always looking toward the future. These firms establish goals and will do all they can 
to attain the goals. To them, having strong vision helps propel them toward accomplishment 
and it guides their path to success.  
In addition, when asked if educational level has helped the respondents to improve the 
performance level of their businesses, 3.6% strongly disagreed, 3.6% disagreed, 18.2% were 
neutral, 38.2% agreed and 36.4% strongly agreed. The least firms who disagreed believed that 
they did not need to be educated before they can run their businesses successfully, whereas 
others believed strongly that basic education certainly enhanced the overall quality of the 
business owner. 
Influence of Marketing Strategies on the Performance of SMEs 
Table 4.6: Marketing Strategies Influence on the Performance of SMEs 
Does marketing strategies have any influence 
on the performance of your business? 
Frequency Percentage 
Yes 34 61.8 
No 21 38.2 
Respondents were asked whether their marketing strategies had any influence on the 
performance of their businesses, majority 34 (61.8%) responded in the affirmative, whereas 21 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 227
(38.2%) said no. This implied that indeed the marketing strategies adopted by SME businesses 
impact their performance.  
Discussion 
Influence of government policies and regulations on the performance of SMEs 
The findings indicate that the government is not really doing enough to support/help SMEs in 
the districts. It is notable that this finding contradicts what is known in the literature. For 
example, studies conducted by scholars such as; (Aryeetey & Ahene, 2005; Kayanula & 
Quartey, 2000; Ofosuaa et al., 2015; Ubabuko et al., 2010) have revealed that the governments 
in emerging economies have introduced reforms, created private sector advisory groups, and 
awarded automatic quotas for investors.  
Influence of access to finance on the performance of SMEs 
Examining how access to credit influences the performance of SMEs, the findings indicated 
that many firms are of the view that access to finance had aided their businesses acquire raw 
materials for operation (Opoku-Afriyie, 2019). Equally, SMEs are able to acquire modern 
technologies which affect their production positively due to access to finance. Finally, many 
firms were not of the view that access to finance has helped their business expand due to 
adoption of new strategies. All the above results are in sharp contrast to scholars (Koráb & 
Poměnková, 2015; Maziriri & Chivandi, 2020; Punyasavatsut, 2011; Rand et al., 2011).  
Influence of availability of business information service on SMEs performance 
The findings of this research point out that many of the SME firms had used business 
information to devise better strategies for dealing with their competitors (Ngetich & Kithae, 
2020). Many managers/owners of the businesses also agreed that business information has 
helped them identified potential customers and developed a business relationship with them 
(Aziz & Mahmood, 2011). Many firms again agreed that business information has aided in 
decision-making. To these businesses, information on their strengths, weaknesses, 
opportunities and threats have helped them to identify the internal and external position of their 
businesses (Indris & Primiana, 2015).  
Influence of entrepreneurs characteristics on the performance of SMEs 
In looking at the effects of entrepreneurs’ characteristics on SMEs performance, many of the 
owners said being persuasive in the business has helped them reach greater number of 
customers. Consequently, this has increased their sales for the previous four months (Storey, 
2011). Additionally, majority of firms agreed that due to the passion and confidence they have 
in their businesses, they are able to run the business successfully without difficulty (Roland, 
Zamberi, Mohd, & Yusof, 2012). With regard to past experience, the study revealed that their 
businesses have been helped to perform better than previously as their previous knowledge 
directs them in what to do and what not to (Barreira, 2004; Peña, 2002; West & Noel, 2009). 
The findings again revealed that most businesses have been able to achieve greater successes 
because of the strong vision they have (D’Amboise, 2000). Finally, majority of firms were able 
to adopt strategies that helped them to gain competitive advantage over their competitors due 
to their educational level (Neneh, 2011). However, the few who disagreed that the level of 
education might not be a panacea for them to develop better strategies to gain competitive 
advantage could be right because with or without educational background, their businesses 
might have survived (Peters & Brijlal, 2011).  
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 228
Influence of marketing strategies on the performance of SMEs  
The study revealed that the marketing strategies adopted by SME businesses truly impact their 
performance. This was evident when majority of businesses responded positively to the 
statement that the marketing strategies adopted had strong impact on the performance of their 
businesses. This finding is supported by scholars such as; Amin, (2021); Finoti et al. (2017); 
and Tang et al. (2007) who concluded that marketing strategies impacted SMEs performance 
positively. 
Conclusions and Recommendations  
The study identified various factors that impact the business performance of SMEs in Ghana, 
an emerging market economy. These influencing factors were; the influences of government 
policies and regulations, access to credit, availability of business information service, the 
entrepreneurs’ features and marketing strategies and their impact on the performance of SMEs.  
Besides, it was found that access to credit aids SMEs’ businesses in the acquisition of raw 
materials for operation and businesses are able to pay their workers due to access to finance. 
However, access to credit was equally a great constraint to the SMEs performance and their 
overall contribution to the economic growth of Ghana’s economy. Also, the findings indicate 
that government is not really doing enough to support SMEs. It is therefore, recommended that 
the local assemblies and the government of Ghana should put in place measures like making 
grants and loans readily accessible to these SMEs. Again, the study revealed that for SMEs to 
perform well, a lot depends on individual entrepreneurs’ characteristics such as; level of 
education, past experiences in business, the ability to persuade, be creative, and have strong 
vision, passion and confidence in their businesses and this will certainly guide them in their 
endeavours. Moreover, the study discovered that marketing strategies adopted by SME 
businesses rightly impact their performance. Furthermore, the study supports the academic 
literature on business performance of SMEs. Consequently, the study is important to future 
investigators who may want to use it as a reference document and also as basis for advancing 
their arguments.  
It is hoped that the study’s findings will enable policy makers and governments to design 
pragmatic policies that will support the SMEs and improve the business performance of the 
SMEs in developing economies. In addition, development partners can use this study’s results 
to devise policies and actions to help improve the performance of SMEs in emerging market 
economies. Again, the government of Ghana should acknowledge SMEs contributions and 
involve them in its decisions and structure ways to support the firms to grow and perform 
adequately. Also, for many SMEs to perform well, a lot depends on their individual 
characteristics especially their level of education, ability to persuade, be creative, and have a 
strong vision and use of past experiences in their activities. It is thus, recommended that the 
government of Ghana should help them to improve their knowledge and skills. The SMEs 
themselves should develop new ideas to fulfill their civil obligations such as the payment of 
taxes. Finally, a periodic research or study should be done in Ghana to identify changes that 
may occur in SMEs performance. This will help put SMEs’ on track. 
Limitations and Future Research 
This study is limited in terms of generalization of the results. This is because the study was 
carried out in Kwahu Municipalities in the Eastern Region of Ghana without considering the 
other 15 regions in the country. Therefore, it will not be prudent to generalize the results. What 
is more, the sample size of fifty-five SMEs’ leaves much to be desired. It is our fervent hope 
Ansu-Mensah et al. | Determinants of the Business Performance of Small and Medium Enterprises 229
that a future research should continue to examine other features that can improve on the 
performances of SMEs in developing countries while increasing the sample size.  
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