ABSTRACT
The broad objective is the study was to examine the effect of the external business environment on the growth of SMES in Benin City, Nigeria. Specifically, the study examined the effects of the following variables; socio-cultural, economical and government policies on the group of SMEs ok Benin City.
The Survey research design was adopted for the study. The data used in this study was obtained from a well-structured questionnaire which was validated by the supervisor, administered to respondents and retrieved for analysis. The method of data analysis utilized was the simple percentage and frequency count, while regression analysis was used for test for the hypothesis.
In line with the study objectives, the findings reveal that, language and culture of the customer affect business growth across Edo State, customers prefer to patronize those from their own geopolitical area which affects patronage. The belief, educational level and buying behavior of customers greatly determine the performance of businesses in Edo State. The spending patterns of customers affect business, while income increase lead to more sales. Reduction of business activities leads to low production and consumption, whereas economic prosperity enables business to perform well and make profit. On the part of government, government decisions proved to have adverse effects on businesses although change of government can also discourage both foreign and local investors transacting business in the state, so also does the rules and regulations of government also affect business. It was recommended that more enlightenment should be given to customers so as to boost their belief and buying behavior so that businesses will experience more patronage; and that business operators should endeavor to birth new and improved ways of production and marketing their products for increased growth of their business.
