A comparison of the motivations of small business owners in Africa

Abstract

Purpose

This paper sets out to examine the reasons why 599 entrepreneurs in Kenya, Ghana and Nigeria started their small businesses. It aims to compares ten motivations across three countries and by gender.

Design/methodology/approach

Ten Likert‐style questions were used to determine start‐up motivations. The mean scores were calculated and compared to test for significant differences. A factor analysis was conducted to see whether the ten items could be synthesized into distinct factors. Then, the factors were compared across countries and by gender.

Findings

The strongest motivator across countries was the opportunity to increase income. A factor analysis found three motivation factors: a family factor, an external validation factor, and a self‐betterment factor. The three countries showed significant differences with Ghanaian entrepreneurs rating the family factor as more important. The item analysis showed that female entrepreneurs were less motivated to create a business as a legacy or for external validation.

Research limitations/implications

The list of motivations here is non‐exhaustive. The addition of other motivation items could change the results. Results should not be generalized to other countries or other regions of the countries surveyed.

Practical implications

Since motivations differ across countries and gender, countries can benefit from developing country‐ and gender‐specific programs to encourage business creation. For instance, Nigeria and Kenya should develop stronger succession laws so that businesses can be inherited by family members. Ghana and Nigeria might stimulate more enterprise development by providing public recognition for entrepreneurial behavior.

Originality/value

This is the first cross‐country study of the motivations of entrepreneurs in sub‐Saharan Africa.

Citation

Benzing, C. and Chu, H.M. (2009), "A comparison of the motivations of small business owners in Africa", Journal of Small Business and Enterprise Development, Vol. 16 No. 1, pp. 60-77. https://doi.org/10.1108/14626000910932881