Analysis of Small Scale Enterprise Performance in Ethiopia: Evidence on Selected Small Scale Enterprises in Addis Ababa

The main objective of study is to empirical examine how-well small scale enterprise are performing in Ethiopia with special emphasis on selected Small scale enterprise that are operating in Addis Ababa. Small scale enterprise performance can be measured using various indicators that would be broadly classified as financial and non financial and hybrid measure. Similarly, in this article small firm performance is measured using quantitative employment and qualitative perceived profit growth. To achieve the main objectives of the study, primary cross sectional data that would particularly elicit the information with regards to employment and profit growth status are collected from 250 small scale enterprise owners-managers that were selected using stratified random sampling techniques. The collected data is analyzed mainly using descriptive method of data analysis. The result of the descriptive data analysis reveals that small scale enterprises on average grow 11.55 % annually in their employment and the deviation from the mean is 18 %. The annual growth rate of small scale enterprise is varying from decrease of 63 % to increases of 130 %. Moreover, the data computation revealed that, about 71.6 percent of SSEs in the survey are growing and about 28.4 percent are non- growing (surviving) in their employment growth performance. However, among growing SSEs the larger proportions about 79.35 percent of SSEs were slow- grower firms and about 20.65 percent are rapidly growing firms in their annual employment growth in this survey. The descriptive data analysis result also revealed that, the majority about 55 percent of small firms are growing in profit status and about 45 percent of the SSEs that are found non- growing (surviving) in their profit growth status. Finally, based on the finding of the study suggestions have been forward for practitioners and policy makers on the issues that help to improve the performance of the firm.