Factors affecting the performance of small and medium enterprises in KwaZulu-Natal.

MBA University of KwaZulu-Natal, Durban 2014.Small and Medium Enterprises (SMEs) have an important role to play in the development of the country. A strong SME sector contributes highly to the economy, contributing to the Gross Domestic Product, by reducing the level of unemployment, reduction in poverty levels and promotion of entrepreneurship activity. Even though SMEs make a contribution to the economic growth and are of significant importance, SMEs globally, and in South Africa especially, are still faced with many challenges. In South Africa, the growth of SMEs and prevalence of SMEs is significantly low. Therefore, the aim of the study was to identify the internal and external factors affecting the performance of SMEs in KwaZulu-Natal, and to make recommendations to overcome these factors to improve the performance of SMEs. This was crosssectional survey conducted via online using anonymous questionnaire among the SMEs who were members of the Durban Chamber of Commerce. The results revealed technological advancement was a factor as 81.82% of the respondents, mentioned that would improve the performance of the business. With regards to challenge, 73.02% SME owners/managers viewed competition as a major challenge. Majority of the SME owners/managers, between 82.54% and 86.67% viewed all the macroeconomic factors studied as hindering factor. The factor crime and corruption was viewed by 88.89% as affecting business performance. However competition was the only factor, amongst the studied internal and external factors that revealed a significant association with the performance of SMEs in KwaZulu-Natal (p=0.011). No other variable were found to be associated with the performance of SMEs in KwaZulu-Natal. SMEs in Kwa-Zulu Natal are faced with competition which is impacting the performance of the business negatively. SMEs are finding it difficult to maintain their market share and position, due to the competition from local competitors as well as international competitors. SMEs need to recognize they must prepare for both domestic and international competition. Collaboration between SMEs could be a way for SMEs to confront competition. By entering into joint ventures, the opportunity to combine strengths, information and technological capabilities to increase sales or to enhance their customer base exist