This study focused on the assessment factors affecting of small-scale enterprise the case of restaurants and hotels business in the raya Azebo Wereda southern Tigray. The objective of the study was to investigate the factors affecting of small-scale enterprise (restaurant and hotels) in raya Azebo Wereda: the case of mohoni, maychew and Korem.

The accessible population was the three hundred and eleven (311) registered and 181 selects from the registered restaurant and hotels business in raya Azebo Wereda but returned 169. The study used stratified random sampling to group the businesses into homogeneous entities. This study to select the number of sample respondents proportionally from each stratum then drawn from the each group. Questionnaires with both open and closed items used to obtain data. Statistical Package for Social Sciences (SPSS) version 20 was used to analysis of quantitative data obtained from questionnaire questions.

The study finding that had revealed that restaurant and hotels operating in the study area have been confronting with a number of problems. Among those factors affecting are the major ones include poor infrastructural facilities (like electricity and water), high rank level of competition, lack of access to finance, lack of knowledge and skill. In addition to this lack of access to market, lack of necessary support from relevant institutions specially to MSE's office, shortage of raw materials, managerial and technical skills, lack of additional facilities and enough space to accommodate the fluctuations in customers' arrival. The Recommendations to the factors affecting of restaurant and hotels business are encouraging service providers of the enterprises had better convince and aid such enterprises to prepare business plan. In addition, Provision of training on quality improvement and finally organized the office of MSE's prepare the regularly entrepreneurship training program especially to the new business, produce quality product, give training how to customer handling to the owners.