Abstract:
Business advisory services facilitate sustainable growth and profitability of micro and
small enterprises. Micro and small enterprises are of great importance to economic
growth of any country. They provide one of the most prolific sources of employment
creation, income generation and poverty reduction. While micro and small enterprise
development remains central to the economic growth in a country, in Kenya they have
not fulfilled their expected mandate due to a number of challenges they face. Inability to
seek business advisory services is one of such challenges. The general objective of the
study was to assess the factors that influence the use of business advisory services of
micro and small enterprises in Nairobi City County, Kenya. The study specifically
assessed the effect of employees competence on the use of business advisory services;
determined the effect of adoption of technology on the use of business advisory services;
established the effect of organization structure on the use of business advisory services
and examined the effect of characteristics of the owner of the micro and small business
on the use of business advisory services of micro and small enterprises in Nairobi City
County. The study adopted a descriptive survey research design. A population of 58
registered micro and small enterprises in the industrial area of Nairobi City County
formed the sample frame of this study. A census approach was used to get its sample
size for its population target. The sample, therefore, constituted all the 58 registered
micro and small enterprises in the industrial area of Nairobi County. The sample was
stratified with two (2) strata that classified the enterprises as either food manufacturing
or non-food manufacturing. The respondents were the chief executive officers of micro
and small enterprises within the sample frame. A pilot study was done to pre-test the
research instruments to ensure reliability and validity. Data collected was analyzed using
measures of central tendency, dispersion and inferential statistics. Statistical software for
social sciences version 20 was used as statistical tool for data analysis. The results of the
analysis indicated that employee competence, extent of adoption of new technology, and
characteristics of the owner of the firm have a positive relationship with the use of
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business advisory services. A multiple regression was carried out including the test for
normality and autocorrelation assumption tests to confirm the results. The study
concluded that employee competence have the greatest influence on the use of business
advisory services followed by characteristics of the owner of the firm and then the extent
of adoption of new technology. The study also concluded that the structure of the
organization had no significant influence on the use of business advisory services. The
study recommends that the government of Kenya should ensure that basic training and
skills acquisition is provided to employees of MSEs formally or informally in order to
enable employees become competent. Adoption of new technology in a business is
necessary for a business to grow.
