Cash management and the growth of small scale industries

Abstract

The main purpose of the study was to examine the cash management and the growth of small scale industries in KASSIDA, Kampala central division, Kampala district and it was further guided by specific objectives which included; to identify cash management policies that are used by the managers of small scale businesses of Katwe Small Scale Industries Development Association; to find out the factors that affect the growth of small scale businesses in KASSIDA in Kampala central division Kampala district; to establish the relationship between cash management and growth of small scale businesses in Kampala central division and to find out the effect of cash management on the growth of small scale industries.. The investigation was based on a descriptive survey under both quantitative and qualitative research approach. Primary data was collected with help of questionnaires and observation while secondary data was obtained from the review of documentations and internet. And analysis of data after the research was by use of SPSS to come up with the findings presented in the dissertation. Findings revealed that majority of cash management practices practiced by small scale business owners are strict on cash management. Small scale businesses have control over cash received, cash collected and cash banked such that they monitor the movement and circulation of cash within the business thus leading to growth at a high rate. The findings on the relationship between cash management and growth of small scale revealed that; cash promotes motivations amongst the management and increases managerial skills and experience contribute to the growth of small scale through expansion. In view of these findings, the study concluded that cash management affects growth of small scale businesses by 5%. In conclusion, the poor performance of the business in terms of growth can be traced by a combination of all other factors that affect it. The research recommended that managers of small scale businesses should employ competent accountants in order to keep proper record of business operations. If the recommendations are strictly adhered to, it is believed that profit margin will improve and therefore corporate survival of small businesses in KASSIDA.