Examining Business Failure Among Indigenous Small Businesses: Case Study of Lusaka’s Mtendere Township

Over the years, people have shifted from being dependent on white collar jobs from the government to starting up their own businesses. This trend has spread across the globe giving rise to entrepreneurship. The main objective of this study was to find out the major challenges that cause business failure among small businesses. The study had specific objectives to achieve such as to assess the effectiveness of marketing in championing the growth of small businesses, to find out whether a business plan affects the overall performance of a business, and to examine the role of financial management in the sustainability of small businesses. The study used descriptive design and the data was collected using structured questionnaires. The sample size for the study was 50 respondents drawn from SMEs owners in Mtendere Township of Lusaka District. The study found that although marketing is applied in small businesses, there is lack of innovative marketing strategies. The study also revealed lack of a business plan does not cause business failure but does limit businesses from accessing funds from lending institutions as well as support from financial institutions. The study further revealed that financial mismanagement is the major cause of business failure due to lack of financial literacy among most business owners as well as lack of planning on the part of entrepreneurs. The study recommended for government to train small business owners in creative strategies and innovation in order for them to sustain their businesses.