Effect of Entrepreneurial Innovation on the Organisational Performance of SMEsin Ekiti State, Nigeria

Background: Entrepreneurial innovation is crucial for SMEs' competitiveness and sustainability, fostering efficiency, customer satisfaction, and adaptability through new products, processes and services among others. However, many SMEs struggle to leverage innovation due to challenges like limited funding and poor infrastructure among others, leading to low revenue and growth potential. This study addresses the gap between innovation's potential benefits and its actual impact, helping SMEs enhance their performance and contribute to regional economic growth. Objective: The study examined the effect of entrepreneurial innovation on the organizational performance of SMEs in Ekiti State, Nigeria. Method: Descriptive survey research design was adopted for the study and was carried out in Ekiti State, in South Western Nigeria, as 240 owners and staff of SMEs (hotels, business companies and some major transport companies) operating in Ekiti metropolis and environs were sampled. A structured questionnaire was used for data collection and validated through content and face validity. Cronbach’s Alpha was used to ascertain the reliability of the instrument and the corresponding reliability coefficient of 0.82 showed that the instrument was reliable. Data were analyzed using descriptive statistics of frequency tables, simple percentages and mean through a 5-point Likert Scale. The formulated null hypotheses were tested using one sample t-test statistical tool at 0.05 level of significance, through Stat Plus, version 7.51. Results: Market expansion had significant positive effect on SMEs revenue growth and that cost reduction had significant positive effect on SMEs profitability in Ekiti State Conclusion: The study concluded that SMEs experience substantial benefits from market expansion and cost reduction, collectively driving increased revenue and enhanced profitability. These factors are crucial for sustained SME growth. Unique Contribution: The study emphasizes innovation's role in expanding markets, cutting costs, and boosting SME revenue and profitability, vital for sustained regional growth. Key Recommendation: SMEs should pursue market expansion strategies, including exploring new regions and customer segments, to drive revenue growth and implement cost reduction measures like efficient resource management to increase SME profitability