Business practices as an implication for SMEs growth

English: With the current bleak state of the economy, both in South Africa and globally, resulting in high unemployment and poverty levels, citizens of countries have had to resort to entrepreneurship as a means to generate an income and in turn create jobs. As a result of the quest of financial freedom stemming from entrepreneurship, many small and medium-sized enterprises (SMEs) are established. However, SMEs are faced with high failure rates. This is witnessed in the number of SMEs that rarely make it past the second year of trading, with failure rates as high as 63 percent. As a means to cope with these challenges, scholars have often looked to business practices as an initiative to enhance SME growth. It is as a result that this study purposed to determine which business practices can enhance SME growth. The population used to examine this primary objective consisted of SMEs in the Kimberley, Northern Cape area. There is an increasing consensus that SME owners and managers should play a pivotal role in nurturing entrepreneurial activity in SMEs so as to compete successfully. Subsequently, corporate entrepreneurship (CE) - a concept that describes the entrepreneurial behaviour inside an established organisation- has received much attention in literature as a means to curb the challenge of SME failure and enhance SME growth. As such, the secondary objectives aimed to evaluate prior studies on business practices, assess theoretical studies on SME growth in South Africa, review theoretical studies on CE, determine which business practices SMEs engage in, empirically identify the determinants of SME growth, determine which dimensions of CE SMEs engage in, determine which key business practices can enhance CE and establish a conceptual framework identifying the relationship between business practices and CE as initiatives to enhance SME growth. The population of the study consisted of SMEs in the Kimberley, Northern Cape area and a statistical methodology was implemented to address the primary objective and the secondary objectives. The findings revealed that a positive and significant relationship exists between all of the selected business practices selected for the purpose of this study (Human Resource Management practices, Performance Management practices, Change Management practices, Risk Management practices, Marketing practices and Networking practices) and SME growth. Furthermore, the findings reiterated scholars’ argument that the implementation of business practices in SMEs can help increase the level of innovation, creativity and entrepreneurial behaviour, which in essence refers to CE. A number of recommendations were made at the end of this study that could serve as a guide to formulating and implementing strategies to address the challenges in the study. The emphasis is placed primarily on educational institutions to incorporate the collective implementation of business practices and CE as a means to enhance SME growth in their curriculum; and SME owners and managers to invest in acquiring the right skills set necessary to operate their businesses successfully.