The Influence of Entrepreneurial Risk-Taking Propensity on Sales Performance of Small and Medium-Sized Enterprises in Southwest Nigeria

Abstract

This study examined the influence of entrepreneurial risk-taking propensity on sales performance of small and medium-sized enterprises (SMEs) in southwest Nigeria. Data were collected through primary method with the use of a structured questionnaire administered randomly to a sample of 400 owners, managers/supervisors carefully selected from SMEs who have been in existence for a period of not less than five years and above through a multi-stage sampling technique. Confirmatory Factor Analysis (CFA) was used to analyse the roles of risk-taking propensity on performance of SMEs in Southwest Nigeria. The study results showed that risk-taking propensity has a positive and significant effect on small and medium-sized enterprises’ (SME’s) sales performance in southwest Nigeria. It was concluded through the study that risk-taking propensity is a fundamental part of SMEs’ owners in southwest Nigeria to achieve a significant and optimal sales performance. This means that, the more firms take advantage of risk-taking propensity in the management of their small business organisations, the increase in the sales performance could raise by 46%. This implies that in general, risk-taking propensity plays a crucial and significant role in achieving an increased sales level of SME performance.