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| Role of Financial Planning on Performance of Small and Medium Scale Enterprises |
Amolegbe, Sikiru Adesola, Ibraheem, Abdullahi Aderemi, Olaitan, Wasiu Abiodun, Oyetola, Daud Olawale, Omoniyi, Oyelowo Oyetade
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Abstract:
Small and Medium enterprises (SMEs) contributes immensely to economic growth and social development of any country. Majority of SMEs have failed to recognize the importance of proper financial planning towards successive operation and output performance. The study sought to assess the roles of financial planning on performance of small and medium scale enterprises in Nigeria. Primary data was used for this study and they were sourced from Centremog Limited in Ibadan through administration of structured questionnaire. The research used simple random sampling technique. Survey research design method was used via structured questionnaire. A well-structured questionnaires were given to respondents working at Centremog limited. A total number of fifty (50) questionnaires were administered and retrieved from staffs at Centremog Limited. The data collected were analyzed using descriptive statistics such as tables, charts, frequencies, percentages while hypotheses were tested by using the chi-square (X2) method. The results showed that SMEs adopt financial planning systems and there was a link between financial planning and organisational survival. Also, financial planning had positive effect on organisation profitability. The findings revealed that most SMEs had adopted several financial planning strategies with cash management, accounting receivable management, inventory management and investment significantly influencing SME's Return on Investments. The study recommends SMEs to deepen their financial planning strategies and align them with their returns on investment goals. Also, Financial training programmes should be arranged for SMEs to enable them sharpen and enhance their petty financial skills and to help them in their operations
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