Investment Planning, Working Capital Management and Business Incubation Success of Cottage Industries in Kampala Uganda.
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Date
2022-03-31
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Makerere University Business School
Abstract
This study sought to examine the relationship between investment planning, working capital management and business incubation success of the cottage industries in Kampala, Uganda. The problem was that most of the incubated cottage industries have not picked up well. The businesses continue to have cash management problems, inventory problems, and lack of creativity and innovation. They have not scaled up; have limited commercialization and business knowledge. The objectives were: to examine the relationship between investment planning and business incubation success of cottage industries, to establish the relationship between working capital management and business incubation success of cottage industries, to examine the joint effect of investment planning and working capital management on business incubation success of cottage industries and to examine the mediating role of working capital management on the relationship between investment planning and business incubation success of cottage industries in Kampala, Uganda. The research design was cross sectional using a quantitative approach. The sample size was 186 companies selected by simple random sampling. A questionnaire was used to collect data. The results indicate that both investment planning and business incubation success are positively related (r=.434, p<.01). More to that, both working capital management and business incubation success are significantly related (r =.788, p< .01). The results show that investment planning and working capital management predict 62.2 percent of the variance in business incubation success (Adjusted R-Square=.622). Working capital management (β=.805, p<.01) is a better predictor of business incubation success than investment planning (β =-.094, p<.05). It was recommended that Government should ensure that before entities are admitted to participate in the cottage industries in Uganda, they should be able to undertake the basic planning. For example, the promoters need to write up a detailed business plan to assess their target market, identify areas for growth and revenue generation and project financial needs. Management should take steps to increase the level of training and awareness among the businesses about planning before making investments. Each of the businesses should put in place a separate policy on all the components of working capital like cash policies, inventory policies, credit policies, payable policies etc. These policies should be drafted, reviewed by all stakeholders and immediately implemented. In order to improve on working capital management, management of the businesses should conduct regular refresher training for all staff in the finance and management positions
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This is a master's thesis.
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Citation
Kengara, M. A. (2022). Investment Planning, Working Capital Management and Business Incubation Success of Cottage Industries in Kampala, Uganda. (Unpublished master's dissertation). Makerere University Business School, Kampala, Uganda.