Entrepreneurs Should Invest in Training

Published on 24th October 2006

Despite the fact that both the Public and the private sector have invested a lot of money in the training of business entrepreneurship, there is a downward trend regarding the operational success of small businesses in Zimbabwe. Of the 500 000 businesses established in 1991, only 277 000 were operating by 1998.

A study to establish the role of functional literacy on the business viability and success among women suggests strategies that can be employed to improve Women in Business – Zimbabwe (WIBZ). The study revealed that there is a correlation between functional literacy and business viability.

The descriptive survey used non-probability sampling procedure. Fifty-three trainers (out of a population of 60) and 84 business entrepreneurs (out of 110) were selected using the Krejeic and Morgan (1970) table for determining the sample size, which had a 95% level of confidence as its target. Data was collected from trainers and women in Business in the Harare Province through pre-tested questionnaires. The trainees’ questionnaire was used to determine WIBZ training courses compatibility with adult education theory and principles. The business entrepreneur questionnaire was used to establish the role of functional literacy on business viability and strategies through which women’s business can be improved.

Findings and Discussion

Age details of the women entrepreneurs who participated in the study ranged from 30 years and below to 51-60 years. 53.5% of the participants were in the 41-50 year age group. Only 6% were 30 years and below. 46.4% had O’ level qualifications followed by 33.3% who had A’ level qualifications, with one (1.2%) having no formal schooling.  Married women comprised 76.2% with only 2.4% being single. Thirty-three respondents were involved in trading and 27 in manufacturing. Three respondents could not identify their areas of business activity.

The 31-50 years age group mainly comprised of married women and probably widowed respondents who are breadwinners in their own right. Economic pressures motivate women to engage in business to supplement their inadequate resources. This age group attends business-training courses to get new knowledge, skills and attitude for effective business running, thus, supporting the notion that adults learn from direct inquiry into problems affecting their lives. WIBZ entrepreneurs sampled had O and A-Level qualifications hence literate enough to understand and implement learning experiences. The assertion that literacy stimulates the desire for skills training may hold water.

Trading was the most popular business activity observed, as it not only brings instant money that can solve the immediate needs but also enables women entrepreneurs  get money quickly to solve their problems.

WIBZ perception of the relevancy of functional literacy skills to business viability showed that 79% of the respondents attended a business training programme while 21% had not. Seven out of the eighteen who did not attend indicated that they had not received communication on time and seven suggested that they did not have money to pay for the programme. Attendance by 79% indicates the demand for functional literacy skills in the running of business.

On the content covered, over half (53.6%) of the respondents had attended an Entrepreneurship course while 44% had attended a Marketing course. Staff Recruitment, Developing a Business Plan and Forms of Business courses had been taken by 36.9%, 35.7% and 34.5% of the respondents respectively. The rest were tutored on Financial Requirements (38.1%), Costing (48.8%), Record Keeping (40.5%), Cash Flow (38.1%) and Tax and Insurance (26.2%). On the basis of needs analysis, some courses receive more priority in the training programmes designed for WIBZ.

On areas of business operations that benefited greatly from the training courses undertaken, it can be concluded from the responses in the table below that many business women attend courses thus supporting the idea that companies that continually train their employees tend to benefit.

Operations that Benefited from the Training Courses

Entrepreneurship development

54.8%

Business idea

41.7%

Forms of business

36.9%

Marketing

35.7%

Staff recruitment

32.1%

Financial requirements

26.2%

Record keeping

25%

Cash flow planning

23.8%

Developing a business plan

22.8%

Tax and insurance

15.5%

Ninety five percent of the respondents indicated that they needed more training. The remaining five percent did not respond. The need for more training is an indication that entrepreneurs had seen the benefits of the previous training to their business. On the need for further training, Marketing (36.9%) finance, costing (23.5%), tax and insurance (22.7%), record keeping (21%), cash flow planning (19.3%) were given in order of priority.

Business areas that benefited from skills training cited in order of priority were: marketing, staff recruitment, financial management, and costing, record keeping and cash flow production. The skills training that improved their business performance identified were: marketing, staff recruitment, costing, buying, record keeping, stock control and business planning. The findings continue to make it clear that business training programmes are skills oriented.

Responses on personnel skills required to increase business viability after attending training courses indicated marketing, staff recruitment, finance, buying, bookkeeping and auditing. The least skill was auditing with 7.1%, perhaps explaining the failure of some businesses due to lack of proper audit.

The improvement of businesses as a result of training shows an upward trend suggesting the contribution of functional literacy on business viability. Pearson’s correlation coefficient was computed asking whether a business-training programme was attended and whether there was an improvement after attending the course. The correlation coefficient was: r = 0.683. This depicts a strong coefficient between course attendance and business improvement. While correlation does not imply causation, this figure shows that when functional literacy improves, business performance also improves. To further support this, the hypothesis that functional literacy skills are a positive function of business viability was tested against alternative hypothesis that functional literacy skills are not a positive function of business viability using the t-statistic at 95% level of significance.

The question which shows areas the respondents have been successful was taken. The tabulated t-value at 67 degrees of freedom and 5% level of significance was found at 1.96 which is greater than the calculated t-value of 1.689. One cannot reject the hypothesis that functional literacy skills are a positive function of business viability, hence justifying the stated hypothesis. There is a significant number of people who need training i.e. in marketing (36.9%), finance management (23.5%), costing (23.5%), tax and insurance (22.7%), implying that there is need for business training in the areas indicated.

In assessing the compatibility between WIBZ entrepreneurs course with principles of adult education, it was discovered that 86.6 % of the trainers fall within the 31 – 60 age range. This means that the trainers are generally mature and are likely to handle trainees in the adult fashion.

Seventy nine percent of the trainers are tertiary qualified and adult education trained suggesting that they have greater insights in the field of training and are competent to train business women. They are able to design, implement and evaluate business training and adjust courses to suit prevailing conditions. This is in line with the thinking that adult educator must be trained personnel in their respective areas.

Most of the trainers (37.7%) have experience ranging from 11- 20 years; hence they can capitalize on experience to make business entrepreneur courses effective apart from the adult education training they received in the various courses. This is in line with the argument that adult educators require in-depth knowledge of adult learning methodology in order to facilitate learning. Since adult education learning and principles are supplied by the trainers in WIBZ courses, their programmes could be said to be effective and functional literacy skills play a major role in project viability.

Recommendations

Women In Business-Zimbabwe are making frantic efforts to improve their functional literacy as a way of improving their business skills. It is important for the relevant institutions involved in providing such training to consider offering more of such business courses. Since many women entrepreneurs are engaged in trading and manufacturing, future training programmes should empower women entrepreneurs with capacities to venture into other non traditional areas like banking, insurance and commercial agriculture.

The funding of women business enterprises needs to be considered by stakeholders such as government, financial institutions, women organizations lobby groups with a view of creating opportunities for opening up windows for funding. While Zimbabwe has done a lot in this regard, more still needs to be done especially for the women entrepreneurs as revealed in this study.

By K.C. Mbetu, Executive Dean-Faculty of Commerce, and S. Magida, Lecturer- Department of Adult Education

Midlands State University


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