Influence of selected demographic variables on SMME survival

Abstract

The economic vibrancy of most small communities is generally driven by Small, Medium and Micro Enterprises (SMMEs) of different kind. Although the existence of these SMMEs tend to depend mainly on the disposition of the entrepreneur, the role of demographic variables tend to be very significant when it comes to their profitability and long-term survival. A myriad of research studies have highlighted the role of demographic characteristics. The paper aims to establish the influence of demographic variables on SMME sustainability and success. We employed a positivist research approach, which is descriptive in nature. A survey was used to collect data from 117 randomly sampled owners/managers respondents from a myriad of SMMEs in the Matjhabeng municipality in Welkom. Yielding a response rate of 69%. A regression analysis and interpretation was conducted to determine the influence of variables to each other. The regression data analysis revealed a mixed-bag of results with (i) education level, (ii) household income and (iii) consumer mobility reporting a significant relationship with SMME sustainability. Conversely, (iv) age level and (v) past work experience showed no significant relationship with SMME sustainability. To ensure sustained SMME growth and success, owner/managers must embrace and entrench a culture of investing not only in their self-development, but that of their team members/workforce as well. The study provides empirical evidence of the positive relationship between demographic variables and SMME’s sustained success and survival. Confirming that education and experience in particular are critical predictors of SMME success if investment on the most important asset, people, is given a high priority.