Abstract

This study investigates the effects of the external business environment on the performance of Small and Medium Enterprises (SMEs) in the South East Geopolitical Zone of Nigeria. Using a mixed-methods approach, data is collected from 300 SME owners through structured surveys and semi-structured interviews. The research examines the influence of various external factors, including economic conditions, political stability, technological adoption, social and cultural dynamics, and regulatory challenges, on SME performance metrics such as profitability, growth, and sustainability. The findings reveal significant relationships between these external factors and SME performance. Economic factors, particularly inflation and access to financing, emerge as critical determinants of success. Additionally, the study highlights the importance of a stable political environment and supportive government policies in fostering a conducive atmosphere for SMEs. Technological adoption is shown to enhance competitiveness, while social and cultural factors play a vital role in shaping entrepreneurial attitudes. Conversely, regulatory challenges negatively impact SME performance, underscoring the need for reforms to simplify compliance processes. Based on these findings, the study recommends strategies to improve access to finance, foster political stability, promote technology adoption, cultivate a supportive cultural environment, and simplify regulatory frameworks. These recommendations aim to create a more enabling environment for SMEs, ultimately contributing to economic growth and development in the region. This research provides valuable insights for policymakers, business leaders, and stakeholders seeking to enhance the performance and sustainability of SMEs in Nigeria.