Financial sustainability and financial well-being of small and medium enterprise owners in Sekondi-Takoradi, Ghana

Abstract

Financial sustainability is the most vital part of SMEs and the cornerstone of SME owners’ well-being. However, poor financial sustainability of SMEs leads to poor well-being of SME owners. Therefore, the study aimed to assess SME owners’ financial sustainability and well-being. Primarily, the study sought to identify the main factors that influence SMEs’ sustainability, describe the level of SMEs’ financial sustainability and level of SME owners’ financial well-being, amd to assess the relationship between SME financial sustainability and owners’ financial well-being in Sekondi-Takoradi. Through the use of cross-sectional design and a quantitative approach, 250 SME owners were chosen from a population of 10,205 SME owners in SekondiTakoradi, the study. Overall, the study used close-ended instrument to gather data from the participants. In particular, 5-point Likert scale measure was relied upon to solicit information from SME owners on sustainability factors, business sustainability measures and the financial well-being of the SME owners. Using SPSS version 22.0, data obtained were analysed and presented in tables and figures. Simple linear and multiple regression techiques were also used to determine the relationship between the variables. A p-values of less than 0.05 were considered statistically significant at a 95% confidence interval. The study found that SMEs financial sustainability is influence by both internal and external factors. It was also revealed that the businesses were financially stable amd the well-being of SME owners was financially good to a moderate extent. Finally, there was a favourable and significant relationship between financial sustainability and the financial well-being of SME owners. Therefore, the study recommended that since SMEs have no control over the external factors, they should concentrate on and improve upon the internal factors such as skills, experience amd finacial literacy since they positively influences SMEs' financial sustainability. In addition, it is recommended that SMEs work on their return on investment to better their sustainability.