Abstract:
The purpose of the study was to identify the financial mismanagement of small
businesses and their effect on the business’s success. This research used the
qualitative approach and continued the study through the general qualitative method.
Sample were selected based on the purposive sampling method. Accordingly, data
collection was done through in-depth interviews with owners of six small businesses
in the Talawakele - Lidula Municipal Council area in the Nuwara Eliya District. The
data were analysed, and themes were derived using thematic analysis. The main
mismanagement identified from the study was mismanaging start-up capital, cash
flows, budgetary system, personal spending, retained earnings, and working capital.
Due to these mismanagements, businesses cannot run with a proper plan. The
findings of this study will enable small businesses to identify their financial
mismanagement. These findings will also help policymakers to identify the areas that
are required to improve the financial management literacy of small business owners.
