Relationship between small business success and financial management competencies amongst African female entrepreneurs in Gauteng Province, South Africa

Abstract

Background: Small businesses, especially those run by black women, play a crucial role in the economy of Gauteng province in South Africa. However, for a few reasons, the reality is that a variety of these black businesses struggle to survive for more than three years. Objective: This study aims to examine how critical financial management skills such as budgeting, planning, basic business governance and general management affect the success of black women-owned small businesses. Methods: The study takes a quantitative research approach and uses factor analysis and regression analysis to analyse data collected through a survey of 83 participants, including owners, managers, and employees. The survey examines perceptions of the importance of budgeting, planning, governance and general management skills. Results: The results indicate that financial management competencies (budgeting, planning, basic governance and general management) have a positive and significant influence on business success. Conclusion: The results emphasise the interconnectedness of financial management skills and their importance to the success of small businesses run by women entrepreneurs. These findings have implications for business practices and policy development. Contribution: This research provides valuable insights for women entrepreneurs, policymakers and researchers and highlights the critical role of financial management in the success of small businesses in South Africa. It lays the foundation for future research on the nuanced dynamics of financial management in this sector