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1.5 Rationale of this study
The purpose of the study is to investigate the impact of cash management
practices on profitability and sustainability of small retail businesses in the
Tongaat area, in KwaZulu-Natal. Part of the study will also ascertain whether
certain cash management practices are being performed in small
businesses and, what are the challenges faced? Many small businesses
face liquidity problems and eventually fail due to the lack of cash
management knowledge and implementation. It is vital to have viable small
businesses in developing communities as these businesses provide the
basic necessities of the community. Therefore, this study will directly benefit
these communities. This study will equip business owners with sound
management practices which will ensure the profitability and sustainability of
their businesses.
1.6 Variables
The variables used in this research study are presented below.
Independent variable: Cash management practices
Dependent variable: Profitability and sustainability of small retail
businesses
1.7 Hypotheses
The hypotheses that will be tested in this study are as follows:
Null hypothesis (Ho): The implementation of cash management practices
do not have an impact on profitability and sustainability of small retail
businesses in the Tongaat area.
Alternate hypothesis (Ha): The implementation of cash management
practices do have an impact on profitability and sustainability of small
retail businesses in the Tongaat area.
The hypotheses were formed from the problem statement relating to relevant
studies which emphasised the impact of the lack of implementation of cash
management practices of small businesses on profitability and sustainability.
1.8 Aim of the study
The aim of the study is to identify the current cash management practices
used by small retail businesses in the Tongaat area and identify the impact
of such practices on their profitability and sustainability.
1.9 Objectives of the study
In order to achieve the above aim, the following objectives will be addressed:
- To identify the current cash management practices of small
businesses;
- To determine why certain cash management practices are not
