External Business Environment and Performance of Small and Medium Enterprises (SMEs) in Bayelsa State, Nigeria

The study examined the effect of external business environment on performance of SMEs so as to contribute to existing studies, as well as to disseminate findings to enhance SMEs performance in Bayelsa State. The study employed survey design. The study population comprised SMEs registered with Small and Medium Enterprise Development Agency of Nigeria in Bayelsa State with the total of 4,535. The Taro Yamane formula was used to obtain a sample size of 478. The study employed the multiple regression analysis and the findings revealed taxation policy has a significant and positive effect on sales revenue, the analysis of insecurity and market growth shows a negative and significant effect of insecurity on SMEs market growth potentials. In conclusion, taxation policy, and insecurity had a significant effect on service quality, sales revenue, and market growth respectively. It was recommended that in order to augment overall performance, SMEs should always ensure adequate scan of the external business environment to identify potential threats and opportunities within their operating environment. In addition, the government should levy a lower tax to enhance increase in revenue base of SMEs. The research also recommends that the government, industry, and individual should ensure that contributions are made at all levels to improve and better the state of Nigeria’s security.