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Tristart survey on business readiness among the youth and women timothy mahea 2011

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A research conducted with a view to understand the Business Readiness among the youth and women in Kenya who have benefited from the youth and women enterprise development funds.

A research conducted with a view to understand the Business Readiness among the youth and women in Kenya who have benefited from the youth and women enterprise development funds.

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  • 1. Are the Youth and Women of Kenya readyfor Business? 1
  • 2. A Study on Youth and Women Entrepreneurs’ Preparedness in Kenya:A Case Study of the Kenya Youth Enterprise Development Fund andKenya Women Enterprise Fund Beneficiaries using the TRISTART BusinessEvaluation Tool. AUTHORS: Jackline Sagwe Samuel Gicharu Timothy Mahea KENYA INSTITUTE OF MANAGEMENT PUBLICATION, 2011 1
  • 3. EXECUTIVE SUMMARYABOUT TRISTART TOOL been conducted into the reasons why women enter SMEs, lessTriStart is a unique, online self-assessment business readiness is known about their business readiness and the challengesevaluation tool, which offers an overall business readiness they face in growing their businesses. Achieving gender parityscore. It provides an analysis of an individual’s personalized and empowering women in SMEs remains therefore a keybusiness readiness report based on 19 key components which consideration in both the Medium Term Plan 2008 – 2012 andhave been grouped into three categories, and then statistically Vision 2030 where entrepreneurship is identified as one of thecorrelated into entrepreneurial success criteria consisting of: key drivers of socio economic transformation.Market and Technology (technology orientation, market status,market prospects and customer orientation), Experience and Various programs by the Kenya Government such as youthSkills( breadth of business experience, business experience, and women enterprise development funds have already beenbusiness planning expertise, business area expertise, level put in place in order to facilitate creation of entrepreneurialof responsibility, finance and accounting, administration and ventures in Kenya. The question is how prepared are thesales and marketing) and Entrepreneurial Spirit ( strategic Kenyan youth and women to enterprise development. Thefocus, appetite for risk, dynamism, visual communication, Kenya Institute of Management through its SME Solutioninformal communication, team independence and team centre sought to assess business readiness among theplayer). youth and women entrepreneurs using the TriStart business evaluation tool.Based on the responses provided in the online survey,individuals are scientifically graded against successful and The TriStart helps determine how well an existing or annot-so-successful businesses which have gone before them. individual’s idea does in the market by identifying key factorsTriStart assessment delivers a clear understanding of an critical to business success, applying a business readinessindividual or team’s strengths and weaknesses thereby score highlighting business success or failure factors byenabling them to identify where they need interventions. The highlighting the strengths and weakness of an individual andtool is of relevance to entrepreneurs at start up and various the team in the business. The evaluation explores personalitystages of growth, venture capitalist, and institutions financing characteristics, competencies, and motives before one beginsSME’s. It enables banks and venture companies understand an entrepreneurial venture.the viability of a business that they are advancing credit to. Study ObjectivesStudy Background Our study sought to determine whether the youth and womenIt is widely acknowledged that SMEs generate employment of Kenya are ready for business. The study was guided by theopportunities, economic growth and produce commercial following questions;innovations of high quality. Consequently, there is a growing (i) What is the level of business readiness among the youthappreciation within Government, Development Community and women entrepreneurs in Nairobi, Kenya?and Civil Society that an important aspect of holistic and (ii) What are the factors that contribute to the businessall inclusive development is the active participation and readiness among the youth and women entrepreneurs ininvolvement of women and the youth in decision making. Nairobi, Kenya?The population growth rate of the youth has outstripped boththe growth the economy and employment opportunities. (iii) Do individual capabilities of entrepreneurs such asThis means in essence fresh employment opportunities must training, education, and prior experience in the same fieldbe created including by the youth themselves. The best way have a significant effect on the growth of the businesstherefore the youth can create opportunities is through through the management strategies and businessentrepreneurship. practices they choose to adopt?Similarly, to achieve sustainable wealth creation and Methodologyemployment, women’s participation in the small business The study adopted a cross sectional descriptive design. Thesector is a growing phenomenon worldwide. Entrepreneurship study population consisted of entrepreneurs who havehas been recognized in various government policy documents benefited from the Kenya Youth Fund and Women Fund. Theas the engine of economic change with a growing tendency for study adopted two-stage sampling. The first step involvedsmall enterprises promotion. While considerable Research has stratification of entrepreneurs in terms of type of funding: 2
  • 4. Youth fund and Women Fund. Secondly, a random sample On team preferences about two thirds of the entrepreneursof 240 entrepreneurs was selected in proportionate to the surveyed indicated that they would like to be part of the teamsize of each stratum (type of fund). Primary data collection that encourages their individuals to do their own thingsmethod by use of questionnaires carefully designed by By completing the TriStart evaluation the entrepreneurs wereTristart to assess business readiness of the sample randomly assessed against the TriStart entire database of global start-selected. Prior to data collection, ethical approval was sought up and early stage businesses on which the TriStart researchfrom National Council of Science and Technology (NCST). programme is based. The entrepreneur’s TriStart evaluationData management and analysis was done using SPSS. Data score reflects his/her current likelihood of being successful inmanagement involved checking for consistency, coding, his/her business venture. The evaluation identifies three corelabeling and documenting. During management, overall data component categories within which the 19 critical factorsquality was assessed. Data was disaggregated into type of sit. These are knowledge and skills; market and technologyfunding; gender and analyzed appropriately. and entrepreneurial spirit. Individualized reports indicateThe analysis was categorized into business sector, business that overall the women fund beneficiaries scored better onknowledge, experience, market position and style. The business readiness as compared to youth fund beneficiaries.study targeted 240 entrepreneurs drawn from both Youth 61% of the youth beneficiaries scored 26 -50% whereas 68%and Women funds in equal proportions, however only of the women fund beneficiaries scored the same. 39.1% of110 youth entrepreneurs and 75 women entrepreneurs the youth fund beneficiaries scored 51-75% whereas 32% ofresponded translating to a response rate of 91.7% and 62.5% the women fund scored the same.response rate for women and youth. The entrepreneurswere distributed across the eight constituencies as follows: Majority of the entrepreneurs (98%) scored 0 -25% on marketDagoretti (9.2%); Embakasi (17.3%); Kamukunji (12.9%); and technology. An indication that entrepreneurs are notKasarani (5.4%); Langata (6.5%); Makadara (3.7%); Starehe well prepared in market and technology. On experience(24.4) and; Westlands (9.2%) and skills, 46.4% of the youth entrepreneurs rated breath ofStudy Findings experience as high and 34.7% of the women entrepreneursOn business sector, majority of the entrepreneurs (86%) rated it as low. Business experience was rated medium onindicated that they need both advice and money. On business average by both youth and women entrepreneurs. Businessstart up, about one third of the entrepreneurs indicated that planning expertise on the other hand was rated lowly bythey will be ready in 1 to 3 months to start their business. This both the youth and women entrepreneurs. Interestingly levelindicates that this category of entrepreneurs after receiving of responsibility was rated highly by both youth and womenfunding did not start their business immediately. Further, entrepreneurs.majority (59%) of the entrepreneurs had not developedbusiness plans and only 30% of the entrepreneurs indicated Entrepreneurial spirit was assessed on strategic focus,that they had submitted the business plans they developed appetite for risk, dynamism, vision communication, informalto investors, bank and support agency. communication, team independence and team player. 50.7%On market sector the respondents responded to growth of the women fund entrepreneurs and 53.6% of the youthprospects, level of competition and market existence. Majority fund entrepreneurs rated (50.7%) rated strategic focus as(79.5%) of the entrepreneurs indicated that team members low. On the other hand 43.6% of the youth and 37.3% of theare very important as sources of support. About average of women fund entrepreneurs rated appetite for risk as high.the entrepreneurs had not modified their products/services The results further indicate that dynamism was rated highlyto give greater customer appeal. Further, majority of the by both entrepreneurs. Vision communication was ratedentrepreneurs indicated that the products and services they as medium. Interestingly team independence was rated byoffer were customer friendly. majority from both youth and women entrepreneurs as low.Majority (76.8%) of the entrepreneurs surveyed indicated Conclusionthat they prefer when success brought about their effort 61.3% of the women entrepreneurs and 48% of the youthis attributed to everyone in the team. Average of the surveyed have less than 50% likelihood of business success.entrepreneurs described their communication style as This explains why 1 in every 3 new businesses fails within thepredominantly formal and they naturally communicate what first 6 months.needs to be done by assigning clear responsibilities and tasks. 3
  • 5. The entrepreneurs were assessed on: Entrepreneurial Spirit This involved entrepreneurs’ strategic focus, appetite for risk,1. Knowledge and skills dynamism, visual communication, informal communication, team independence and team player.2. Market and Technology • Overall 98% of the entrepreneurs scored 26-50% on 3. Entrepreneurial spirit entrepreneur spiritKnowledge and Skills • 97.3% of the youth fund beneficiaries scored 26-50% This involved entrepreneurs’ breadth of experience, business whereas 100% of the women fund beneficiaries scoredexperience, business planning expertise, work experience, the same.business area expertise and level of responsibility. The key • In a scale of 1(low) and 3 (high) majority of the findings are entrepreneurs rated their knowledge on strategic focus and team independence as low.• Entrepreneurs demonstrated inadequate knowledge of • Dynamism and visual communication was rated highly the sector they operate in. by both entrepreneurs.• 46.4% of the respondents indicated that the business Growth prospects, level of competition in the market sector, launched had performed okay knowledge of a clear leader in the market sector, business• Insufficient branding, brand awareness and brand knowledge, prior work experience and its relevance to the distinction business venture and market position are among the factors that contribute to the business readiness among the youthMarket and Technology and women entrepreneurs in Nairobi, Kenya.On this the entrepreneurs were assessed on technologyorientation, market status, market prospects and customer Individual capabilities of entrepreneurs such as training,orientation. education, and prior experience in the same field were found• Majority of (98%) scored 0 -25% on market and to have a significant effect on the growth of the business technology. An indication that entrepreneurs are not venture. well prepared in market and technology and yet they In conclusion the results indicate that entrepreneurial operate in a business environment that is technologically readiness is still low among the entrepreneurs who benefited advanced. This explains why half do not apply new from both youth and women fund. This is therefore crucial methods or technology to provide products/services at for enterprise funders needs to assess the entrepreneurs on lower cost. business readiness to identify the business readiness gaps.• Team members were as well as suppliers was identified as Further the results are useful in categorizing entrepreneurs very important sources of support by the entrepreneurs. for purposes of training.• Half of the entrepreneurs had not modified their products/services to give greater customer appeal.• Majority (65.4%) of the entrepreneurs surveyed indicated that they would like to be part of the team that encourages their individuals to do their own things.• 50.3% indicated that, “I hate uncertainty”, applies to them. This is an indication that they are not willing to undertake risky ventures.• Lastly in a scale of 1(low) and 3(high) majority of the entrepreneurs rated their knowledge on technology orientation and market status as low 4
  • 6. CONTENTSEXECUTIVE SUMMARY .................................................................................................................................................................................... 21.0 Introduction ............................................................................................................................................ 81.1 Objectives of the study ............................................................................................................................................................. 81.2 Research Questions ................................................................................................................................................................... 82.0 Literature Review.................................................................................................................................... 82.1 Introduction .................................................................................................................................................................................. 82.2 Women Entrepreneurship ....................................................................................................................................................... 92.3 Youth Entrepreneurship ........................................................................................................................................................... 92.4 Need for Entrepreneural Preparedness.............................................................................................................................102.5 Motivation to become an Entrepreneur ...........................................................................................................................102.6 Team Formation.........................................................................................................................................................................113.0 Data and Methods ................................................................................................................................113.1 Introduction ................................................................................................................................................................................113.2 Research Design ........................................................................................................................................................................113.3 Population and Sampling Design........................................................................................................113.3.1 Population ...................................................................................................................................................................................113.3.2 Sampling Technique ................................................................................................................................................................113.4 Data Collection Methods .......................................................................................................................................................123.5 Data Entry Management and Analysis ..............................................................................................................................124.0 Discussion of Study Findings ...............................................................................................................124.1 Demographics ............................................................................................................................................................................124.2 Business Sector ....................................................................................................................................134.2.1 Business Idea ..............................................................................................................................................................................134.2.2 Market Sector .............................................................................................................................................................................154.3 Business Knowledge.............................................................................................................................184.3.1 Knowledge and Business Plan..............................................................................................................................................184.4 Experience .............................................................................................................................................194.4.1 Work Experience........................................................................................................................................................................194.4.2 Business Experience .................................................................................................................................................................214.5 Market Position ..........................................................................................................................................................................214.5.1 Sources of Support ...................................................................................................................................................................214.5.2 Competitive Advantage..........................................................................................................................................................214.5.3 Product .........................................................................................................................................................................................224.6 Style .......................................................................................................................................................224.6.1 Communication .........................................................................................................................................................................224.6.2 Team Preferences ......................................................................................................................................................................234.6.3 Attitude.........................................................................................................................................................................................244.7 Tristart Individualised Report .............................................................................................................244.7.1 Knowledge and Skills...............................................................................................................................................................254.7.2 Market and Technology ..........................................................................................................................................................254.7.3 Entrepreneurial Spirit ..............................................................................................................................................................264.8 Tristart Factors ............................................................................................................................................................................274.8.1 Market and Technology ..........................................................................................................................................................274.8.2 Experience and Skills ...............................................................................................................................................................274.8.3 Entrepreneurial Spirit ..............................................................................................................................................................285.0 Discussions, Conclusions and Recommendations .............................................................................285.1 Business Idea ..............................................................................................................................................................................285.2 Market Sector .............................................................................................................................................................................295.3 Style ...............................................................................................................................................................................................295.4 Results on Individualised Reports .......................................................................................................................................295.5 Conclusions and Recommendations .................................................................................................................................295.6 Limitations and Future Research .........................................................................................................................................29References...............................................................................................................................................................30 5
  • 7. LIST OF TABLESTable 1: Constituencies respondents sampled from ....................................................................................................................13Table 2: Responses on start up .............................................................................................................................................................14Table 3: Success of Business Launch...................................................................................................................................................15Table 4: Growth prospects .....................................................................................................................................................................15Table 5: Level of competition in the market sector .......................................................................................................................16Table 6: Other Factors on market sector ...........................................................................................................................................17Table 7: Responses on Knowledge and business plan.................................................................................................................18Table 8: Contents of the Business Plan ..............................................................................................................................................19Table 9: Relevance work experience to business venture ..........................................................................................................21Table 10: Business Experience .................................................................................................................................................................21Table 11: Sources of Support ...................................................................................................................................................................21Table 12: Competitive Advantage..........................................................................................................................................................22Table 13: Product .........................................................................................................................................................................................22Table 14: Communication .........................................................................................................................................................................23Table 15: Team Preferences ......................................................................................................................................................................24Table 16: Attitude.........................................................................................................................................................................................24Table 17: Cross tabulation on type of funding received and Overall Tristart Evaluation results.....................................25Table 18: Cross tabulation on type of funding received and; Knowledge and skills ...........................................................25Table 19: Cross tabulation on type of funding received and entrepreneurial spirit ............................................................27Table 20: Rating on Market and Technology......................................................................................................................................27Table 21: Rating on Experience and Skills ...........................................................................................................................................27Table 22: Entrepreneurial Spirit ..............................................................................................................................................................28 6
  • 8. LIST OF FIGURESFigure 1: Response rate ................................................................................................................................................................................12Figure 2: Advice to entrepreneurs ............................................................................................................................................................13Figure 3: Are you working for yourself or someone else..................................................................................................................13Figure 4: Business Plans ...............................................................................................................................................................................14Figure 5: Use of Business Plans in Seeking Funds ...............................................................................................................................14Figure 6: Business Launch ...........................................................................................................................................................................15Figure 7: Market Existence .........................................................................................................................................................................16Figure 8: Business Expectations ................................................................................................................................................................18Figure 9: Work Experience ...........................................................................................................................................................................19Figure 10: Highest level of responsibility held.....................................................................................................................................20Figure 11: Are the people you work with previous colleagues......................................................................................................20Figure 12: Knowledge and Skills ..............................................................................................................................................................25Figure 13: Market and Technology ...........................................................................................................................................................26Figure 14: Cross tabulations on type of funding received and, Market and technology .....................................................26Figure 15: Entrepreneurial Spirit ...............................................................................................................................................................26 7
  • 9. 1.0 Introduction score highlighting the propensity for success or failure andEntrepreneurship has become a vital driver for economic highlighting the strengths and weakness of an individual andgrowth, economic competitiveness, job creation and the the team in the business. The evaluation explores personalityadvancement of societal interests (Linan, Rodrıguez-Cohard characteristics, competencies, and motives before one beginsand Rueda-Cantuche, 2005). Van Praag and Versloot (2007), an entrepreneurial venture.based on a literature review of 57 studies on the relationshipbetween small enterprises and economic growth, and 1.1 Objectives of the studyconcluded that entrepreneurs play a very important role The main objective of the study is to explore businessin the economy. According to the authors, these smaller readiness of both women and youth who have benefitedenterprises generate employment opportunities, economic from the Women Fund and Youth Fund respectively. It isgrowth and produce commercial innovations of high commonly assumed that those who seek entrepreneurialquality. Consequently, there is a growing appreciation within funding are ready for business. This study therefore soughtGovernment, Development Community and Civil Society that to investigate whether these assumptions hold and if so howan important aspect of holistic and all inclusive development gender and age plays a part in shaping such outcomes. Theis the active participation and involvement of women and study specifically sought to address the following objectives:the youth in decision making. Such an orientation – in effect i To assess the level of business readiness among the youthachieving gender equality and empowering women is and women fund beneficiaries.considered to be one avenue for promoting women’s rights, ii To identify business readiness gaps among the youth andempowerment, and leadership actively by positioning them fund beneficiaries.at the center of economic development. iii To generate information for influencing policy in making choices and implementing cost effective interventionsThe focus on the youth has also gained a lot of support that enhance business readiness among the youth andsince their population has been growing at a high rate and women entrepreneurs.the employment opportunities have not matched thatgrowth. This has therefore shifted the focus to empowering 1.2 Research Questionsof the youth in order to enable them become entrepreneurs i. What is the level of business readiness among the youthand hence employers. Various programs by the Kenyan and women entrepreneurs in Nairobi, Kenya?Government such as Kenya Youth Enterprise Development ii. What are the factors that contribute to the businessFund have already been put in place in order to facilitate readiness among the youth and women entrepreneurs increation of entrepreneurial ventures in Kenya. Nairobi, Kenya? iii. Do individual capabilities of entrepreneurs such asHowever, women and youth face barriers in their quest training, education, and prior experience in the same fieldto become successful in entrepreneurship. Major barriers have a significant effect on the growth of the businessencountered include; lack of confidence in their own through the management strategies and businesscapabilities, lack of working capital since majority of them practices they choose to adopt?especially in the rural areas earn less in employment, andsocio-cultural barriers since women have to perform multiple The remaining part of the paper is organized as follows.roles of a familial nature irrespective of their career. Section two presents the literature review, section three data and methods, section four study findings and section fiveAchieving gender equality and empowering women in presents the discussion of findings and recommendations.SMEs remains a key consideration in the Medium TermPlan 2008 – 2012 and Vision 2030 where entrepreneurship 2.0 Literature Reviewis identified as one of the key drivers of socio economic 2.1 Introductiontransformation. It’s in this respect that the Kenya Institute Most people think of entrepreneurship as the processof Management through its SME Solution Centre sought to of starting a new business. Researchers, theorists, andassess business readiness among the youth and women business practitioners define it in many different ways.entrepreneurs using the TriStart tool business evaluation For example, Gartner (1988) defines an entrepreneur astool. The TriStart helps determine how well an existing or an someone who creates new independent organizations.individual’s idea does in the market by identifying key factors Schumpeter (1934) defined entrepreneurs as innovatorscritical to business success, applying a business readiness who implement entrepreneurial change within markets, 8
  • 10. where entrepreneurial change has five manifestations: the sectors women therefore prefer for starting a business areintroduction of a new (or improved) good; the introduction mostly characterised by high turbulence rates, thus providingof a new method of production; the opening of a new relatively few opportunities for rapid business growth (Storey,market; the exploitation of a new source of supply; and 1994; Robb and Wolken, 2002).the re-engineering/organization of business managementprocesses. On the other hand, Shane and Venkataraman Buttner and Moore (1997) and Lerner et al. (1995) highlighted(2000) define entrepreneurship as a field of business that women’s motivations to start their own businesses such asseeks to understand how opportunities to create something self-fulfilment and personal goal attainment among others, asnew created by specific persons, who then use various means the prime reason for women’s low quantitative performanceto exploit or develop them, thus producing a wide range of (such as jobs creation, sales turnover and profitability) wheneffects (p. 218). Dollinger (2003) on the other hand interprets compared to men. Selection of strategies that focusedentrepreneurship as the creation of an innovative economic on market expansion and new technologies, as well asorganization (or network of organizations) for the purposes willingness to incur greater opportunity costs for the superiorof gain or growth under conditions of risk and uncertainty. performance of their firms were the key factors for the high growth of women-owned business as compared to low orAccording to Timmons and Spinelli (2003) entrepreneurs are no growth firms (Gundry andWelsch, 2001) This literatureself-starters who appear driven internally by a strong desire review provides insights into the nature and characteristicsto compete against their own self-imposed standards and to of women-owned businesses. However little has been down pursue and attain challenging goals. The authors further argue on their level of preparedness on market and technology;that real entrepreneurs have low need for status and power, knowledge and skills and; entrepreneurial spirit.but they derive personal motivation from the challenge andexcitement of building enterprises. In their study involving 130 2.3 Youth Entrepreneurshipmembers of the Small Company Management Programme The level of unemployment in Kenya is very high. The mostat Harvard Business School, they found out that motivation affected by high unemployment rates are the youth whoto excel was the single most important factor in their long- after graduating from Universities and other institutionsterm successes. The need to excel is characterized by high but of learning, find themselves unable to secure formalrealistic goals, drive to achieve and grow, and interpersonally employment opportunities, thereby failing to gainfullysupporting versus competitive. contribute to economic development of this country despite their enthusiasm, energy and drive.2.2 Women EntrepreneurshipWomen’s participation in the small business sector is a growing According to the ILO (ILO publication, 2007), the increase inphenomenon worldwide. While considerable research has the number of youths in secondary and tertiary educationbeen conducted into the reasons why women enter small is a positive development; however, labour markets inbusiness, and their penchant for operating solo operations or many countries are presently unable to accommodate themicro businesses (up to five employees), less is known about expanding pool of the skilled young graduates. In Africa,their level of business preparedness. Female entrepreneurs several African governments have developed entrepreneurialoften tend to pursue business in a limited number of skills development programs in order to solve youthsectors, in which women traditionally are economically unemployment problem and ensure economic growthactive such as the retail and service sectors. Research from (Nafukho, 1998). In the case of Kenya for instance, thethe West indicates that female business owners prefer to Government has created both a youth entrepreneurship fundstart their business in sectors where female employment is the belief that this will stimulate the creation of new businessconcentrated (Luber and Leicht, 2000; McManus, 2001). The enterprises by Kenyan entrepreneurs (Nafukho, 2007). Thechoice of sector is attributed to a combination of resource question is how prepared are the youth for entrepreneurship.constraints, environmental uncertainty and specific female It is important therefore to note that money is only one ofaversion to risk-taking, which lead them to engage in activities the resources that apply to a business; it is inevitable thatwith low entry thresholds and low financial risk. This pattern entrepreneurship culture and expertise be first inculcated tohelps explain why female businesses are typically smaller the youth and the prospective entrepreneurs.in employment and sales than their male counterparts. The 9
  • 11. 2.4 Need for the Entrepreneurial Preparedness everyone unaware; demographics; changes in perception,Entrepreneurs are people who create and grow ventures and mood, and meaning and; new knowledge, both scientific andall entrepreneurs must be successful business people, but not non-scientific.all business people are entrepreneurs (Macke and Markeley,2003).The authors further argue that many business people Knowledge has as a major factor influencing economic growthrun great businesses, but they are not motivated or lack the which takes place predominantly through entrepreneurialskills to grow businesses and create new enterprises. Whereas capital or the capacity to engage in the entrepreneurialentrepreneurs create new enterprises for different reasons activities as highlighted by the new growth theory with itssuch as self-sufficiency, lifestyle, or desire for wealth they are emphasis on knowledge (Romer, 1990, 1994).all motivated to turn ideas into new business ventures. Although growth theories are not directly concerned with entrepreneurship and small firms, many authors haveSmall, medium and micro enterprises (SMEs) play major identified these as the key mechanisms through whichroles in economies by creating jobs and increasing income knowledge spill-over contributes to job creation and thelevels of a majority of the people (Ongori and Migiro, 2009). overall growth of the economy (Wennekers and Thurik,These enterprises serve as drivers of economic growth Nooteb Audretsch and Thurik, 2001; Pagano and Schivardi,and innovation. However, SMEs face a myriad challenges. 2003; Schuh and Triest, 2000).To minimise the challenges, it’s important to assess thebusiness readiness of the entrepreneurs. To be successful Relevant literature mainly describes factors thought toas entrepreneurs, people must possess certain behaviors, influence small business growth in two categories. The firstmotives, and cognitive frameworks. Peterson and Gonzalez comprises entrepreneurs’ characteristics such as behaviour,(2005) argue that entrepreneurial behavior is critical for people personality, attitude (Storey, 1994), their capabilities, includingwho want to start their own business and for employees who education and training that create higher expectations inwant to maintain their jobs. Baum, Frese, Baron, & Katz (2007) some industry sectors (Henry et al., 2005), and their social find that entrepreneurs’ personal characteristics are the most capital which influences access to resources (Brush et al.,important factors for business success even more important 2004). Other entrepreneurial factors identified by Storeythan the business idea or industry setting. (1994) are previous management experience, family history, functional skills, and relevant business sector knowledge.Rauch and Frese (2007) indicate that personality characteristics None of these however have conclusively shown to constituteare enduring dispositions that show a high degree of stability a universal success factor.over time. The authors conducted a thorough review of theliterature related to personality traits and entrepreneurship 2.5 Motivations to become an Entrepreneurbefore identifying the characteristics that are critical for Several authors have argued that the decision to become anentrepreneurs to possess in that they have an effect on entrepreneur is a complex and multi-faceted phenomenonbusiness creation and success. On the other hand, Frese, (Marlow and Strange, 1994; Shane et al., 1991; Stevenson,Baron, and Katz (2007) report that despite the belief that 1990). Among the motivating factors is the desire forentrepreneurs’ personal characteristics are important for new independence and autonomy (Harrison and Hart, 1993; venture success, the psychology of the entrepreneur has not McDowell, 1995; Shane et al., 1991; Vivarelli, 1991). Therefore,been thoroughly studied. independence appears to be a universal motivator for both women and men in deciding to become entrepreneursDrucker (2004) sees entrepreneurs as individuals who act (Kirkwood, 2007). Earlier studies on gender differences arecreatively, innovate and reconstruct. He values them as inconsistent.individuals who see and use profit-making opportunities bybringing together the factors of production. According to Kirkwood (2007) found out that motivations that emergedDrucker, there are seven sources for innovative opportunity: from experiences at work were also an importantthe unexpected - the unexpected success, the unexpected consideration to many entrepreneurs. Two distinct categoriesfailure, the unexpected outside event; the incongruity of work-related motivation were found in the literature; those-between reality as it actually is and the reality as it is assumed regarding a particular job or employer and broader careerto be or as it ‘ought to be; innovation based on process need; or employment level factors. . On a higher level than anchanges in industry structure or market structure that catch individual job are career and employment issues such as career 10
  • 12. flexibility, advancement and co-career issues (DeMartino and who have experience in diverse functional areas (Feeser andBarbato, 2003), difficulty finding employment (Fox, 1998; Willard, 1990; Harrison et al., 2004a).Hakim, 1989) and redundancy (Marlow, 1997). DeMartino and Barbato (2003) found women were more motivated than 3.0 Data and Methodsmen by co-career issues and career flexibility. The opposite 3.1 Introductiontrend existed for advancement where significantly more men This chapter provides a discussion of the researchwere motivated by this factor than women (DeMartino and methodology adopted by the study. It provides a discussionBarbato, 2003). on the research design paying attention to the choice of the design, the population of study, sample and samplingEarly studies have shown that a number of factors hamper techniques, ethical consideration, data collection methodsthe growth of small businesses, including lack of capital or as well as data analysis and data presentation methods usedfinancial resources, however, the degree to which limited in the study.financial resources alone are a major obstacle to businessdevelopment is still controversial (Okpara, 2011). Kallon 3.2 Research Design(1990) found that the capital needed to initiate a business This study adopted descriptive survey Research Design.is significantly negative when related to the rate of growth According to Saunders, Lewis and Thornhill (2003) surveyfor the business. He also found that access to commercial strategy is a deductive approach popular in business research.credit did not contribute to entrepreneurial success in The main advantage of this research design is the ability toany significant way, and if it did, the relationship would be collect large amounts of data from sizeable population in anegative. This explains why entrepreneurial preparedness highly economical way.is key to business success and growth. Management suchas accounting, finance, personnel, and management issues, 3.3 Population and Sampling Designhave been cited as a major cause of business failure for smallbusinesses in the literature. Tushabomwe-Kazooba (2006) 3.3.1 Populationfound out that that poor recordkeeping and a lack of basic Population is defined as a full set of cases from which abusiness management skills are major contributors to small sample is taken, (Saunders, Lewis and Thornhill, 2003). Thebusiness failure in Africa. study population consisted of entrepreneurs who have benefited from the Kenya Youth Enterprise Development2.6 Team formation Fund and Women Enterprise Fund. Due to the large numbersResearchers now recognize the importance of teams in of beneficiaries it was impractical to survey the wholethe creation of new firms, after decades of emphasis on population, as a result, a sample was scientifically selected toentrepreneurs as individuals (Forbes et al., 2006). This perhaps represent the populationexplains why the youth and women fund target groups for 3.3.2 Sampling Techniquefunding. Ventures founded by entrepreneurial teams tend to Saunders, Lewis and Thornhill (2003) state that probabilitybe more innovative than those with only one founder (Ruef, sampling is commonly associated with survey based research2002) and larger teams are associated with higher levels of due to the need to make inferences from the selected sampleventure growth (Lee and Tsang, 2001). Representative studies to answer the research questions. Fox and Bayat (2007) addshow that truly solo entrepreneurs are not predominant. that a probability sample is one in which each element in the population has a known and non-zero chance of beingMartinez and Aldrich (2011) argue that strategic theories included.stress that entrepreneurs should balance instrumental andexpressive goals in the selection of teams. On the rational- The study adopted two – stage sampling. The first stepinstrumental side, theorists urge entrepreneurs to consider involved stratification of entrepreneurs in terms of type ofthe complexity of entrepreneurial endeavors and include a funding: Kenya Youth Enterprise Development Fund andvariety of work experiences and complementary skills. For Women Enterprise Fund. Secondly, a random sample of 240instance high technology firms tend to be founded by teams entrepreneurs was selected in proportionate to the size ofwho recruit members they have met in previous jobs and each stratum. 11
  • 13. 3.4 Data Collection Methods Data management and analysis was done using SPSS. DataThis study utilized primary data collection method by use management involved checking for consistency, coding,of questionnaires carefully designed by Tristart to assess labeling and documentation. During data management,business readiness of the sample randomly selected. Prior to overall data quality was assessed. Data was disaggregateddata collection, ethical approval was sought from National based on type of funding; gender and analyzed appropriately.Council of Science and Technology (NCST).Pre-testing of the instruments was also carried out in selected 4.0 Discussion of study findingsentrepreneurs based on gender and type of funding. Those 4.1 Demographicssample pretesting were excluded from the study. The study targeted 240 entrepreneurs drawn from both Youth and Women fund in equal proportions however only3.5 Data entry, management and analysis 110 youth entrepreneurs and 75 women entrepreneursA blinded double data entry was carried to assess the quality responded translating to a response rate of 91.7% andof data entered. The double data entry was run concurrently 62.5% response rate for women and youth entrepreneurswith the initial entry so that it can feed back areas that require respectively ( figure 1)keen attention. Data entry screen was designed with tablescreated and stored. The data entry screen was developedby the data clerk so that the necessary checks and balances(constraints) are put in place. This assisted in improving thequality of data by not allowing un-expected values and takecare of any skips within the tools. Figure 1: Response rate The results on table1 indicate that majority of the respondents (24.4%) were from Starehe Constituency and the least were from Makadara (3.7%) (table 1). 12
  • 14. Table 1: Constituencies respondents sampled from Constituency Frequency Percentage Dagoretti 17 9.2 Embakasi 32 17.3 Kamukunji 24 12.9 Kasarani 10 5.4 Langata 12 6.5 Makadara 7 3.7 Starehe 45 24.4 Westlands 17 9.2 No response 21 11.4 Total 185 1004.2 Business sector4.2.1 Business IdeaOn whether they entrepreneurs needed money or advice, most enterpreneurs (86%) indicated that they neeed both advice andmoney, 10% indicated they need money and 3% needed advice (figure 2). Figure 2: Advice to entrepreneursOn whether the entrepreneur for himself or someone else, the study findings indicate that most entrepreneurs (78%) are eitherrunning their own business or in partnership whereas 7% were working for someone else (figure 3). Figure 3: Are you working for yourself or someone else 13
  • 15. Business start upThe study findings show that 38% of the entrepreneurs had already started their businesses, 34.6% will be ready in 1 to 3months and 15.1% of the entrepreneurs will be ready in more than three months (table 2).Table 2: Responses on start up Response on start up Frequency Percentage Already started 71 38.4 Within one month 4 2.2 1 to 3 months 64 34.6 More than three months 28 15.1 Not sure yet 13 7.0 No response 5 2.7Business Plans37% of the entrepreneurs surveyed had developed business plans whereas 59% had not. This indicates that majority of theentrepreneurs do not develop business plans and thus starting a business without one (figure 4). Figure 4: Business PlansUse of Business Plans in Seeking Funds30% of the entrepreneurs indicated that they had submitted the business plans they developed to investors, bank and supportagency, and 27% did not whereas 43% did not respond to the question (figure 5). Figure 5: Use of Business Plans in Seeking Funds 14
  • 16. Business Launch62% of the entrepreneurs indicated that they had launched their businesses whereas 37% had not. Figure 6: Business LaunchSuccess of Business Launched46.4% of the respondents indicated that the business launched had performed okay,9.2% exceeded expectations and 37.9% did not respond to the question (table 3). Table 3: Success of Business Launch4.2.2 Market sectorGrowth ProspectsAbout 41% of the entrepreneurs surveyed indicated that there was moderate growth in the market sector they operate in,28.1% had experience rapid growth, 23.8% indicated that the market sector had experienced steady market growth and theremaining 5.4% had experience declining market growth.Table 4: Growth prospects Market Sector Frequency Percentage What are the growth prospects for your market Declining 10 5.4 Steady 44 23.8 Moderate growth 75 40.5 Rapid growth 52 28.1 No response 4 2.2 15
  • 17. Level of competitionRegarding the level of competition 48.6% of the respondents rated that the level of competition in the market sector theyoperate in as high, 25.9% as moderate, 13.5% as insignificant and 11.4% do not find any competition.Table 5: Level of competition in the market sector How do you rate the level of competition? Frequency Percentage None 21 11.4 Some but insignificant 25 13.5 Moderate 48 25.9 High 90 48.6 No response 1 .5Market existenceOn market existence 47.6% of the entrepreneurs surveyed indicated that the market they operate in has been in existence for 1to 5 years and 26.5% indicated 6 to 15 years (figure 7). Figure 7: Market ExistenceOther factors on market sectorOn other market factors, 55.7% of the entrepreneurs surveyed indicated that at least one well known nationally advertisedbrand that sells a product or similar to theirs exists whereas 43.2% were not aware (table 4). Further 63.8% of the entrepreneurssurveyed indicated knowledge of a clear leader in the market sector they operate in whereas 33.5% did not. On comparisonbetween the price of the product and competition, about two thirds of the entrepreneurs considered it as average and less thanone thirds lower than average. Majority (62.2%) of the entrepreneurs surveyed operate in a local market (table 6).On start up cost, 31.4% started with KShs. 101,000-250,000 and about 30% had started their businesses with less than Kshs.50,000. Further 27% of the entrepreneurs had started with 26 to 100 employees, 19.5% started with 11- 25 employees and 17.8%with 1 to 10 employees. 16
  • 18. Table 6: Other Factors on market sector Is there at least a one well known, nationally advertised brand that sells a Frequency Percentage product or service similar to yours?Yes 103 55.7No 80 43.2No response 2 1.1Is there a clear leader in your market sector Frequency PercentageYes 118 63.8No 62 33.5No response 5 2.7How does the price of your product or service compare to the competition Frequency PercentageHigher than average 17 9.2Average 124 67.0Lower than average 31 16.8No response 13 7.0The market your business operates in is: Frequency PercentageLocal 115 62.2Regional 22 11.9National 7 3.8International 6 3.2No response 35 18.9What was the start up cost Frequency PercentageLess than 50,000 55 29.750,000-100,000 18 9.7101,000-250,000 58 31.4251,000-500,000 14 7.6More than 500,000 6 3.2No response 34 18.4What was the number of employees at start up Frequency PercentageNone 15 8.11-10 33 17.811-25 36 19.526-100 50 27.0Over 100 2 1.1No response 49 26.5What is the anticipated number of employees at start up Frequency PercentageNone 6 3.21-10 15 8.111-25 22 11.926-100 22 11.9Over 100 2 1.1No response 118 63.7 17
  • 19. Business ExpectationsOn business expectations, 38.9% of the entrepreneurs indicated that their businesses will grow steadily over the years, 21.6%their businesses will become of regional importance, 18.4% indicated that they will become of national or internationalimportance and 4.3% just provide them with a living (figure 8). Figure 8: Business Expectations4.3 BUSINESS KNOWLEDGEUnder business knowledge the TriStart tool includes knowledge and business plan of the entrepreneurship.4.3.1 Knowledge and Business planKnowledge on business functionsIn a scale of 1 (not at all knowledgeable) to 5(deeply knowledgeable), the entrepreneurs rated their level of knowledge inbusiness strategy, marketing, sales, accounting, finance, research, manufacturing, administration and personnel functions of abusiness. On business strategy, 21.6% of the entrepreneurs indicated that they were deeply knowledgeable and on the otherhand 18.9 % of the entrepreneurs were not at all knowledgeable. 31.4% of the entrepreneurs were deeply knowledgeable onmarketing, 27.6 % knowledge and 21.6% quite knowledgeable. On sales 31.4% were deeply knowledgeable. On accounting,responses on quite knowledgeable and deeply knowledgeable intertwined at 23.2%. 28.6% of the entrepreneurs indicated thatthey were knowledgeable on research.Table 7: Responses on Knowledge and business plan Knowledgeable knowledgeable knowledgeable knowledgeable No response knowledge Somehow Not at all Deeply Quite Business Strategy 18.9(35) 11.9(22) 28.6 (53) 11.4(21) 21.6(40) 7.6(14) Marketing 6.5(12) 9.2(17) 27.6(51) 21.6(40) 31.4(58) 3.8(7) sales 8.1(15) 7(13) 27.6(51) 20(37) 31.4(58) 5.9(11) Accounting 18.4(34) 13(24) 23.2(43) 23.2(43) 18.9(35) 3.2(6) Finance 20.5(38) 16.2(30) 22.7(42) 16.8(31) 17.8(33) 5.9(11) Research 13.5(25) 8.6(16) 28.6(53) 21.1(39) 22.2(41) 5.9(11) Manufacturing 37.8(70) 5.9(11) 9.7(18) 2.7(5) 13.5(25) 30.3(56) Administration 14.6(27) 7.0(13) 20.5(38) 20.5(38) 33(61) 4.3(8) Personnel 18.4(34) 8.1(15) 16.8(31) 19.5(36) 32.4(60) 4.9(9) 18
  • 20. On contents of the business planIn a binary response 71.9% of the entrepreneurs indicated that their business plan included an executive summary, 70.3%mission/vision statement, 72.4% ownership statement, 74.1% market analysis, 75.7% market analysis, 77.8% customer buyingpattern, 80% sales and promotion strategy, 80.5% sales forecast, 77.8% customer care plan, 78.9% personnel analysis plan,74.1% profit and loss statement, 75.1% cash flow protection among others (table 8).Table 8: Contents of the Business PlanBusiness plan includes: Yes No No responseExecutive summary: 24.9(46) 71.9(133) 3.2(6)Mission or vision statement 27.0(50) 70.3(130) 2.7(5)Ownership statement 24.9(46) 72.4(134) 2.7(5)market analysis 23.2(43) 74.1(137) 2.7(5)Competition analysis 21.6(40) 75.7(140) 2.7(5)customer buying pattern 19.5(360 77.8(1440 2.7(5)sales and promotion strategy 17.3(32) 80(148) 2.7(5)sales forecast: 16.2(30) 80.5(149) 3.2(6)customer care plan 18.9(35) 77.8(144) 3.2(6)personnel analysis plan 18.4(34) 78.9(146) 2.7(5)profit and loss statement: 23.2(43) 74.1(137) 2.7(5)cash flow protection 21.6(40) 75.1(139) 6(3.2)balance sheet 21.1(39) 75.7(140) 6(3.2)Importance assumptions statement 10.3(19) 87(161) 2.7(5)* Percentages are outside the brackets4.4 Experience4.4.1 Work experienceNumber of years of work experience37.8% of the respondents had work experience of 6 to 15 years, 33% 2 to 5 years of work experience, 19.5% 16 to 25 years and asmall portion (2.2%) had more than 25 years. This indication that work experience is a motivation to many entrepreneurs(figure 9). Figure 9: Work Experience 19
  • 21. Responsibility heldAbout average of the entrepreneurs had held the responsibility of owner/manager and 30.3% had held responsibility of a teamleader (figure 10). Figure 10: Highest level of responsibility heldOther factors on work experience48% of the entrepreneurs indicated that the core group of people he /she works with includes those he/she had worked within the past. Figure 11: Are the people you work with previous colleaguesOn relevance of work experience to business venture, 41.6% of the entrepreneurs indicated the it was directly relevant, 16.2%relevant and 9.7% quite relevant but with new skills required (table 9) 20
  • 22. Table 9: Relevance work experience to business ventureRelevance of work experience Frequency Percentage Directly relevant 77 41.6 Relevant 30 16.2 Quite relevant, but with new skills required 18 9.7 A totally new type of business 25 13.5 No response 35 18.94.4.2 Business ExperienceIn a binary response, 45.4% of the entrepreneurs have worked in a wide range of industries, 63.2% have worked in a wide rangeof functions, 56.8% have experience as a director of business, 62.2% have a special technical expertise, 81.1% have experienceof building a business team and 77.3% have previously raised funding for a business. Interestingly, 68.1% have not previouslyraised funding for a business.Table 10: Business ExperienceBusiness Experience Yes No No responseI have worked in a wide range of industries 45.4(84) 53(98) 1.6(3)I have worked in a wide range of functions 63.2(117) 34.6(64) 2.2(4)I have experience as a director of business 56.8(105) 41.1(76) 2.2(4)I have a special technical expertise 62.2(115) 36.2(67) 1.6(3)I have experience of building a business team 81.1(150) 14.6(27) 4.3(8)I have previously raised funding for a business 77.3(143) 21.1(39) 1.6(3)I have previously raised funding for a business 30.3(56) 68.1(126) 1.6(3)4.5 Market positionMarketing position involves sources of support, competitive advantage, and product4.5.1 Sources of SupportOn sources of support 79.5% indicated team members as very important, 35.7% of the entrepreneurs indicated partner andchildren as important, 71.9% cited suppliers as very important, 87% customers as very important and 60% cited professionalservices as very important (table 11).Table 11: Sources of SupportSources of Support Very Important Important Not relevant No responseTeam members 79.5(147) 14.6(27) 3.8(7) 2.2(4)Partner and Children 44.3 (820 35.7(66) 14.1(26) 5.9(11)wider family 23.8(44) 34.1(63) 37.8(70) 4.3(8)Friends 35.7(66) 42.2(78) 16.2(30) 6(11)Suppliers 71.9(133) 17.8(33) 6.5(12) 3.8(7)Customers 87(167) 7.6(14) 2.2(4) 3.2(6)Government support agencies 60.5(112) 29.7(55) 6.5(12) 3.2(6)Professional services 60(111) 27(50) 9.7(18) 3.2(6)4.5.2 Competitive advantageOn a binary response 47 % of the entrepreneurs indicated that their business offer products/services to a brand new group ofcustomers. 53.5% indicated that they had not modified their products/services to give greater customer appeal and 54.6% donot apply new methods or technology to provide products/services at lower cost (table 12). 21
  • 23. Table 12: Competitive AdvantageThe business will/does Yes No ResponseOffer products/services to a brand a new group of customers 47(87) 49(90) 4 (8)Have technology that is new 37.3(69) 58.9 (109) 3.8(7)Modify existing products/services to give greater customer appeal 45.4(84) 53.5(99) 1.1(2)Apply new methods or technology to provide products/ services at lower cost 44.3(82) 54.6(101) 1.1(2)4.5.3 ProductFurther on a binary response, 76.8% of the entrepreneurs indicated that the products and services they offer were customerfriendly. 53.5% on the hand indicated that their products and services were not offered in a competitive way and 63.8% werenot offered in a quick way.Table 13: ProductThe business will/does offer products and services in a more Yes No ResponseCustomer friendly way 76.8(142) 22.2(41) 1.1(2)Competitive way 44.9(83) 53.5(99) 1.6(3)Quick way 35.1(65) 63.8(118) 1.1(2)Flexible 51.4(95) 47(87) 3(1.6)4.6 Style4.6.1 Communication90.8% of the entrepreneurs surveyed indicated that they prefer when success brought about their effort is attributed to everyonein the team. 54.1% of them indicated that for effective team performance formal communication must be enhanced.53.5% ofthe entrepreneurs described their communication style as predominantly formal. 41.6% of the entrepreneurs indicated thatthey communicate frequently when there is failure around. 62.7% of the entrepreneurs indicated that they believed that themost effective team will have detailed systems and procedures. Further 58.4% of the entrepreneurs indicated that they naturallycommunicate what needs to be done by assigning clear responsibilities and tasks (table 14). 22
  • 24. Table 14: CommunicationDo you prefer it when success brought about by your effort is? Frequency PercentageAttributed to everyone in the team 168 90.8Attributed primarily to yourself 12 6.5Both of the above 1 0.5No response 4 2.2Which do you think is more important for effective team performance Frequency Percentage Formal communication 100 54.1 Informal communication 64 34.6 Both formal and informal communication 18 9.7 No response 3 1.6 How do you describe your communication style? Frequency Percentage Predominantly formal 99 53.5 Predominantly Informal 78 42.2 No response 3 1.6 When do you communicate more frequently? Frequency Percentage When the team is performing well 72 38.9 When there is failure all around 77 41.6 Both of the above 29 15.7 No response 7 3.8 I believe that the most effective team will have Frequency Percentage Detailed systems and procedures 116 62.7 Freedom to act as needed 60 32.4 Both of the above 2 1.1 No response 6 3.2 Do you naturally communicate what needs to be done by Frequency Percentage Using a broad picture of what should be done 68 36.8 Assigning clear responsibilities and tasks 108 58.4 Both of the above 3 1.6 No response 6 3.24.6.2 Team preferencesOn team preferences 65.4% of the entrepreneurs surveyed indicated that they would like to be part of the team that encouragestheir individuals to do their own things. Whereas 56.8% would like to be part of as a team in which individual contributions areencouraged and appreciated. 83.2% believed that business needs teams that behave in predictive ways. Further 73% of theentrepreneurs indicated that it is important that the team members understand and agree on a vision for the company (table15). 23
  • 25. Table 15: Team PreferencesI would like to be part of a team: Frequency PercentageThat encourages their individuals to do their own things 121 65.4Where the individuals are not encouraged to do too many things on their own 51 30.8 Both 1 .5 No response 6 3.2 In which individual contributions are encouraged and appreciated 105 56.8 Where team working is considered more important than individual contributions 71 38.4 Both 3 1.6 No response 6 3.2 I believe that business needs teams that Behave in predictable ways 154 83.2 Don’t necessarily behave in predictable ways 24 13.0 No response 7 3.8 For me it is important that the team members Understand and agree on a vision for the company 135 73.0 Are given clear, systematic roles and procedures 39 21.1 Both 3 1.6 No response 8 4.34.6.3 AttitudeIn a scale of 1 (does not apply to me) to 5(applies to me) the entrepreneurs indicated that looking at the nuts and bolts of theorganization applies to them. 73.5% of the entrepreneurs indicated that looking out for new opportunities and 63.8% of theentrepreneurs generating 50.3% indicated that, “I hate uncertainty”, applies to them.Table 16: AttitudeHow strongly do you agree with the Does not apply No 2 3 4 5(applies to me)following statements to me (1) responseI Look after the nuts and bolts of the 16.8(31) 5.4(10) 7(13) 13(24) 53.5(99) 4.3(8)organisationI will risk bankruptcy if the potential 15.7(29) 8.1(15) 18.4(34) 17.3(32) 38.9(72) 1.6(3)rewards are big enoughI am on the lookout for new 0.5(1) 1.6(3) 9.2(17) 13(24) 73.5(136) 2.2(4)opportunitiesI generate new ideas leading to changes - 3.2(6) 8.1(15) 21.6(40) 63.8(118) 3.2(6)I hate uncertainty 14.6(27) 5.4(10) 16.2(30) 10.8(20) 50.3(93) 2.7(5)4.7 TriStart Individualized ReportsBy completing the TriStart evaluation the entrepreneurs were assessed against the TriStart entire database of global start-upand early stage businesses on which the TriStart research programme is based. The entrepreneur’s TriStart evaluation scorereflects his/her current likelihood of being successful in his/her business venture. The evaluation identifies three core componentcategories within which the 19 critical factors sit. These are knowledge and skills; market and technology and entrepreneurialspirit.Overall the women fund beneficiaries scored better on business readiness as compared to youth fund beneficiaries. 47.3% ofthe youth fund and 36% of the women beneficiaries surveyed scored 51-75%. 24
  • 26. Table 17: Cross tabulation on type of funding received and Overall Tristart Evaluation results Overall resultsType of funding received Total 0 -25 26-50 51 -75 76 -100 Youth fund 1.8 (2) 48.2 (53) 47.3 (52) 2.7 (3) 110 women fund 2.7 (2) 61.3 (46) 36 (27) 0 75 Total 2.2 (4) 53.5 (99) 42.7 (79) 1.6 (3) 1854.7.1 Knowledge and SkillsAmong the core components of TriStart tool is knowledge and skills. Overall 63% of the entrepreneurs both from women andyouth fund scored 26-50% on knowledge and skills and 36% scored 51-75% (figure 12). Figure 12: Knowledge and SkillsSome 61% of the youth beneficiaries scored 26 -50% whereas 68% of the women fund beneficiaries scored the same. 39.1% ofthe youth fund beneficiaries scored 51-75% whereas 32% of the women fund scored the same (table 18).Table 18: Cross tabulation on type of funding received and; Knowledge and skills Knowledge and Skills Chi-Square Total 0 -25 26-50 51-75 P-valueType of funding Youth fund 0.0% 60.9% (67) 39.1%(43) 100.0%(110) 0.314received Women fund 1.3% (1) 66.7%(50) 32.0%(24) 100.0%(75)Total 0.5% (1) 63.2% (117) 36.2%(67) 100.0%(185)4.7.2 Market and TechnologyA majority of the entrepreneurs (98%) scored 0 -25% on market and technology. An indication that entrepreneurs are not wellprepared in market and technology. 25
  • 27. Figure 13: Market and TechnologyThe cross tabulations results indicate that 97% of the youth fund beneficiaries scored 0-25% on market and technology and 98%women fund beneficiaries scored the same (figure 16).Figure 14: Cross tabulations on type of funding received and, Market and technology Market and technology Chi-Square 0 -25 26-50 Total P-valueType of funding Youth fund 97.3%(107) 2.7%(3) 100.0%(100) 0.522received Women fund 98.7% (74) 1.3%(1) 100.0%(75) Total 97.8%(181) 2.2%(4) 100.0%(185)4.7.3 Entrepreneurial SpiritOn entrepreneurial spirit 98% of the entrepreneurs scored 26-50%. Interestingly only 1% of the entrepreneurs scored 51-75%(figure 15). Figure 15: Entrepreneurial Spirit 26
  • 28. Cross tabulations on type of funding received and entrepreneurial spirit results indicate that 97.3% of the youth fundbeneficiaries scored 26-50% whereas 100% of the women fund beneficiaries scored the same. Among the women fund noneof the beneficiaries scored 51- 75%.Table 19: Cross tabulation on type of funding received and entrepreneurial spirit Entrepreneurial spirit Chi-Square Total 0 -25 26-50 51-75 P valueType of funding Youth fund 0.9% (1) 97.3%(107) 1.8%(2) 100.0%(110) 2.079received Women fund 0.0% 100.0% (75) 0.0% 100.0%(75) Total 0.5%(1) 98.4%(182) 1.1%(2) 100.0%(185)4.8 TriStart FactorsThe TriStart evaluation grades the entrepreneurs’ strengths against each of the 19 factors critical to business success. Each factoris graded as high, medium or low.4.8.1 Market and Technology39.5% of the entrepreneurs were rated lowly on technology, 36.8% rated medium and 23.8% rated highly.47.6% of theentrepreneurs were rated lowly on market status, 44.9% rated as medium and 7.6% as high. About two thirds (62.2%) of theentrepreneurs were rated as medium on customer orientation (table 20)Table 20: Rating on Market and Technology Rating Low Medium High Chi-square P Type of funding Women Youth Women Youth Women Youth value Technology 44 (33) 36.4(40) 36(27) 37.3(41) 20 (15) 26.4(29) 0.487 orientation Market status 52.0(39) 44.5(49) 41.3(31) 47.3(52) 6.7 (5) 8.2 (9) 0.604 Market Prospects 9.3(7) 7.3 (8) 17.3(13) 31.8 (35) 73.3(55) 60.9(67) 0.087 Customer 5.3(4) 16.4(18) 77.3(58) 51.8(57) 17.3(13) 31.8(35) 0.002 Orientation4.8.2 Experience and SkillsOn experience and skills, 46.4% of the youth entrepreneurs rated breath of experience as high and 34.7% of the womenentrepreneurs rated it as low. Business experience was rated medium on average by both youth and women entrepreneurs.Business planning expertise on the other hand was rated lowly by both the youth and women entrepreneurs. Interestingly levelof responsibility was rated highly by both youth and women entrepreneurs (table 21).Table 21: Rating on Experience and Skills Rating Low Medium High Chi Square Type of Funding Women Youth Women Youth Women Youth P- value Breadth of Experience 34.7(26) 27.3(30) 32.0(24) 26.4(29) 33.3(25) 46.4(51) 0.208 Business Experience 10.7(8) 13.6(15) 57.3(43) 59.1(65) 32.0(24) 27.3(30) 0.711 Business planning 58.7(44) 54.5(60) 16.0(12) 19.1(21) 25.3(19) 26.4(29) 0.822 expertise Business Area 48.0(36) 40.9(45) 36.0(27) 42.7(47) 16.0(12) 16.4 (18) 0.600 Expertise Level of responsibility 10.7(8) 8.2(9) 30.7(23) 42.7(47) 58.7(44) 49.1(54) 0.248 Finance and 26.7(20) 24.5(27) 42.7(32) 41.8(46) 30.7(23) 33.6(37) 0.901 Accounting Administration 22.7(17) 19.1(21) 29.3(22) 30.9(34) 46.7(35) 50(55) 0.597 Sales and Marketing 14.7(11) 9.1(10) 41.3(31) 44.5(49) 44(33) 46.4(51) 0.501 27
  • 29. 4.8.3 Entrepreneurial SpiritEntrepreneurial spirit was assessed on strategic focus, appetite for risk, dynamism, vision communication, informalcommunication, team independence and team player. 50.7% of the women fund entrepreneurs and 53.6% of the youth fundentrepreneurs rated (50.7%) rated strategic focus as low. On the other hand 43.6% of the youth and 37.3% of the women fundentrepreneurs rated appetite for risk as high. The results further indicate that dynamism was rated highly by both entrepreneurs.Vision communication was rated as medium. Interestingly team independence was rated by majority from both youth andwomen entrepreneurs as low (table 22).Table 22: Entrepreneurial Spirit Rating Low Medium High Chi Square Type of Funding Women Youth Women Youth Women Youth P- value Strategic focus 50.7(38) 53.6(59) 44(33) 41.8(46) 5.3(4) 4.5(5) 0.913 Appetite for risk 25.3(19) 22.7(25) 37.3(28) 33.6(37) 37.3(28) 43.6(48) 0.693 Dynamism - - 12.0(9) 16(14.5) 88(66) 85.5(94) 0.619 Vision 21.3(16) 14.5(16) 50.7(38) 55.5(61) 28(21) 30(33) 0.487 Communication Informal 44(33) 49.1(54) 28.1(21) 18.2(20) 28.0(21) 32.7(36) 0.285 Communication Team 90.7(68) 90.9(100) 8.0(6) 9.1(10) 1.3(1) 0.0 0.466 Independence Team Player 1.3(1) 6.4(7) 56(42) 59.1(65) 42.7(32) 34.5(38) 0.1775.0 Discussion, Conclusion and Recommendations Council of Science and Technology (NCST). Data management and analysis was done using STATA/SPSS. Data managementThe study sought to assess the business readiness of the involved checking for consistency, coding, labeling andyouth and women beneficiaries. The study was guided by the documenting. During management, overall data quality wasfollowing questions. assessed. Data was disaggregated based on type of funding;i. What is the level of business readiness among the youth gender and analyzed appropriately. and women entrepreneurs in Nairobi, Kenya?ii. What are the factors that contribute to the business The analysis was categorized based on business sector, readiness among the youth and women entrepreneurs business knowledge, experience, market position and style. in Nairobi, Kenya? The study targeted 240 entrepreneurs drawn from bothiii. Do individual capabilities of entrepreneurs such as Youth and Women fund in equal proportions however only training, education, and prior experience in the same 110 youth entrepreneurs and 75 women entrepreneurs field have a significant effect on the growth of the responded translating to a response rate of 91.7% and business through the management strategies and 62.5% response rate for women and youth. Majority of the business practices they choose to adopt? entrepreneurs were from Starehe.The study adopted a cross sectional descriptive design.The study population consisted of entrepreneurs who have 5.1 Business Ideabenefited from the Kenya Youth Enterprise Development Majority of the entrepreneurs (86%) indicated that they needFund and Women Enterprise Fund. The study adopted both advice and money. On business start up about onetwo- stage sampling. The first step involved stratification third of the entrepreneurs indicated that they will be readyof entrepreneurs in terms of type of funding: Youth fund in 1 to 3 months to start their business. This indicates thatand Women Fund. Secondly, a random sample of 240 this category of entrepreneurs after receiving funding didentrepreneurs was selected in proportionate to the size not start their business immediately. Further, majority of theof each stratum. Primary data collection method by use entrepreneurs had not developed business plans and onlyof questionnaires carefully designed by Tristart to assess 30% of the entrepreneurs indicated that they had submittedbusiness readiness of the sample randomly selected. Prior to the business plans they developed to investors, bank anddata collection, ethical approval was sought from National support agency. 28
  • 30. 5.2 Market SectorThis involved sources of support, competitive advantage Entrepreneurial spirit was assessed on strategic focus,and product. Majority of the entrepreneurs indicated that appetite for risk, dynamism, vision communication, informalteam members are very important as sources of support. communication, team independence and team player. 50.7%About average of the entrepreneurs had not modified their of the women fund entrepreneurs and 53.6% of the youthproducts/services to give greater customer appeal. Majority fund entrepreneurs rated (50.7%) rated strategic focus asof the entrepreneurs indicated that the products and services low. On the other hand 43.6% of the youth and 37.3% of thethey offer were customer friendly. women fund entrepreneurs rated appetite for risk as high. The results further indicate that dynamism was rated highly5.3 Style by both entrepreneurs. Vision communication was ratedThis involved communication, team preferences and attitude as medium. Interestingly team independence was rated byof entrepreneurs. Majority of the entrepreneurs surveyed majority from both youth and women entrepreneurs as low.indicated that they prefer when success brought abouttheir effort is attributed to everyone in the team. Average of 5.5 Conclusion and Recommendationsthe entrepreneurs described their communication style as Overall the results indicate that entrepreneurial readiness ispredominantly formal and they naturally communicate what still low among the entrepreneurs who benefited from bothneeds to be done by assigning clear responsibilities and tasks. youth and women fund. This is therefore crucial for enterpriseOn team preferences about two thirds of the entrepreneurs funders needs to assess the entrepreneurs on businesssurveyed indicated that they would like to be part of the team readiness to identify the business readiness gaps.that encourages their individuals to do their own things. 5.6 Limitations and future research5.4 Results on Individualized Reports This is a descriptive study to determine business readinessOverall the women fund beneficiaries scored better on of the Kenya Youth Enterprise Development Fund andbusiness readiness as compared to youth fund beneficiaries. Women Enterprise Fund beneficiaries, so the findings do notOn knowledge and skills 61% of the youth beneficiaries necessarily apply to all entrepreneurs in Kenya. In addition,scored 26 -50% whereas 68% of the women fund beneficiaries the sample is not a representation of the entire SME sector inscored the same. 39.1% of the youth fund beneficiaries scored Kenya; therefore, the results cannot be generalized to SMEs51-75% whereas 32% of the women fund scored the same. that were not part of this study. Future research should collectOn experience and skills, 46.4% of the youth entrepreneurs data on a longitudinal basis in order to help to draw causalrated breath of experience as high and 34.7% of the inferences and validate the findings of this study.women entrepreneurs rated it as low. Business experiencewas rated medium on average by both youth and womenentrepreneurs. Business planning expertise on the other handwas rated lowly by both the youth and women entrepreneurs.Interestingly level of responsibility was rated highly by bothyouth and women entrepreneurs. 29
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  • 32. NOTES 31
  • 33. NOTES 32
  • 34. Centre for Enterprise Development, Kenya Institute of Management, Maple Court, 1st Floor, Westlands Close, off Westlands Road. P. O. Box 43706 – 00100 Nairobi. Call: +254 020 3749929, 2396411. E-mail: ced@kim.ac.ke www.kim.ac.ke