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Contribution of small and medium enterprise to the economic development of Rwanda

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par Valens NYANDWI
Universite Nationale du Rwanda - Licence 2013

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2.12. Failure causes of small and medium enterprises in Rwanda

Richard Hodgetts (1982: 24-26) has asserted that the causes of failure of small and medium enterprises are as follows:

a. Some managers are incompetent: the major reason as to why many small and medium enterprises fail is incompetence of managers. The owners simply do not know to run the business.

b. The second most common reason why small and medium enterprises fail is unbalanced experience. By this, we mean that the owners do not have well rounded experience in the major activities of the business such as finance, selling and production. Due to lack of experience in one or more of these critical areas the enterprise gradually fail.

c. Another common cause of business failure is lack of managerial experience. The owners simply do not know how to manage people.

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