Factors Affecting Utilisation of Business Advisory Services by Small Medium Enterprises in Retail Pharmacy Businesses in Kitwe, Zambia

Abstract

Purpose

The purpose of the study was to look at factors that influence utilization of business advisory services by SMEs in retail pharmacy business. Use of competition, Firm size and Firm debt were the independent variables while utilization of advisory services was the dependent variable.

Research Design and Application

The study used a cross-sectional survey method on 33 randomly selected retail pharmacies in Kitwe registered under the Zambia Medicines Regulatory Authority (ZAMRA). Research data collected through questionnaires from SME owner- managers was analysed using descriptive and inferential statistic tools.

Findings

Competition and firm debt were found to positively influence utilisation of business advisory services.  Firm size did not significantly influence SME owner- managers to purchase business advisory services. Trust in the business advisor was found to be a mediator factor on two antecedent factors (competition and debt) and utilisation of business advisory services. The research also revealed that accountants were the most preferred business advisors by SME owner- managers in retail pharmacy business in Kitwe.

Implication/Originality/ Value

The study contributes to ongoing studies around SMEs in Zambia and ways of sustaining growth through advisory services. The results implied that health competition among retail pharmacies and increased gearing of SMEs triggered demand for business advisory services that helped SMEs to improve their efficiency and effectiveness. Accountants being the most preferred business advisors, adequate training in business advisory services (also called non-compliance services) was required for them to continue to meet the expectations of SME owner- managers.

The findings are useful to entrepreneurs and policy makers.