The Causes Of Small Scale Business Failure In Nigeria

The Causes Of Small Scale Business Failure In Nigeria

Abstract

This is a exploration work which examine the causes of small- scale business failures in Nigeria as such the study will go a long way in relating and perfecting the prospect for survival of small- scale business, accordingly contributing to the profitable growth of the Nigeria nation.

In conducting the exploration, questionnaire and oral interviews where used. The sample size for the exploration correspond of 30 and 50 business centers and eatery possessors independently. The data collected were tested statistically by the use of x2( ki- forecourt) the finding of the revealed for the following. That coitus of repliers don’t contribute to business failure, that there’s a bearing between educational position repliers and business failure, that finance is a causative factor to business failure.

thus, recommendations similar as stimulant of the fiscal Institutes to extend loans at a less strict condition to the small- scale business subsection sourcing of cheap and available backups( raw- accoutrements ) locally; thickness in government polices as it affects small- scale business, improvement of the directorial acumum of directors of small- scale business through forums and shops, business possessors should engage in business that are less competitive amongst others were suggested.

Conclusion was drawn following the findings that there should be more commitment when backing inform of loans from banks and enlightment programmes like forum are being organized by government or its agencies, what are demanded thus for an overall enhancement in the performance of small- scale enterprises are better support, understanding and stimulant by all concerned.

Chapter One

Preface

Nigeria’s hunt for public profitable development have been her through several approaches. Since 1960, the time of Independence the country’s development plans have laid a great deal of emphasis on public sector control of the frugality. We’ve a situation where the public/ private sector blend has decreasingly named towards public sector donation. In the first National Development Plan( 1962- 68) the private sector of which small- scale business was part entered 62 of the total capital expenditure while on the other hand; on the fourth plan( 1981- 1985) only 12 of total capital investment was accorded the private sector with the public sector controlling a stunning 88. This supposedly wrong development planning didn’t pass without adverse consequences for the Nigeria frugality. The net effect of the uncontrolled government participation and control of business conditioning through the large scale diligence and the oil painting smash of the 70’s which mandated the entire frivolous and extravagant station of the government and the people including the deportation of the agrarian sector and private action has now give way to hunger, squalor, twisting affectation, complaint and mass severance. But moment the situation is changing. The current emphasis is on the development and strengthening of the small- scale business sector as the main foundation of profitable tone- reliance.

The severance situation in the country coupled with the new government action towards easing social pressure among jobless youths through the programmes of the National Directorate of Employment( N D E) are new soliciting a lot of jobless Nigeria including graduates and others who want to be their own master into tone determination through tone- employment. Graduates and academy leavers are new realizing that government and the established private companies aren’t ready to come to their aid directly through paid employments due to the parolons state of the frugality. Short of volition, Nigerians including our graduates are thus launching themselves into colorful small- scale business gambles, similar as collage cleaner and cosmetics product, husbandry, publishing, jotting, blocking, garri product, food processing, refuse disposal, hack driving, cleaning, services, advertising and public relations, business centers, caffs and other small business gambles.

GENERAL BACKGROUND TO THE SUBJECT MATTER

Small- scale businesses enthrall a significant position in the profitable development of Nigeria in general and Enugu in particular.

There are principally two board orders of small- scale business. The first is the business carried out by traditional tradesmen and crafters, some of whom may need backing so as to contemporize their chops, tools and ways of product. The alternate is the assiduity out by groups of small manufacturing or service enterprise, which produce or give services to a variety of consumers and guests. But in both cases, the scale of operations is generally too small to be of interest to a timber to a foreign investor.

In Enugu, there are thousands of business, which fall into the order of small- scale business. They include weaving, carpentry, pattery and pottery, husbandry, fishing, piggery and beast husbandry, essence- workshop, retail trade, factory, transport, business centers caffs , acclimatizing and dress- making setting up small- scale business and managing it to consummation can be satisfying both financially and psychologically. numerous of similar small- scale business when established to succeed.

still, small- scale business in Nigeria moment face a litrary of problems occasioned by global profitable event. A good chance of these businesses particularly in nsome business centers and eatery assiduity have been forced to wind up due to this profitable situation while numerous others have managed to survive. According toB. Kalejaiye, an alarmingly high number of small- scale business has failed. As was also refocused out by another pen, it’s generally believed that a grater number of people who start up business every time failed than succeed. It has been established that lower than five out of every time twenty business established survive in the veritably first time of establishment. disquisition and observation indicate that a lesser number of people who enter the business field every time fail rather than succeed. The experimenter has also witnessed the fail of some small- scale business which has originally commenced, with high expedients of success.

It’s material to mention then that numerous of these small enterprises which go under, do so, not because their introductory points, polices and strategies when effects begin to fall piecemeal. In addition, it seems that government is yet appreciating the strategic significance of small enterprises in the National Economy. Although, it’s significance has been honored for eventually, wasn’t until lately, that the government felt it necessary to put in place structures fastening on small- scale enterprise development. These structures include National Directorate of Employment( NDU), National Economic Reconstruction Fund( NERFND), fund for small- scale diligence( FUSSI), People’s Bank Of Nigeria, Community Banks, small and medium Enterprises Loan installations( SMELF) among others.

Despite these measures, the small- scale enterprises still continue to fail. It’s against this background that the study sets out to look at the colorful causes of the intimidating rate of small- scale business factures with respects to business centers and caffs . The suggestions and recommendation to be made at the end n of this exploration work will surely give enough information to entrepreneurs both capabilities and being in managing their business gambles successfully.

PROBLEM ASSOCIATED WITH THE SUBJECT MATTER

The bane of the Nigeria Economy is the perceived unsurvivability of the small- scale diligence existent in the profitable system. The fact that small scales diligence is essential and an integral failures rate of small – scale diligence is essential and an integral part of the profitable system can not be over emphasized. Bit having mentioned that the failure rate of small- scale diligence is also intimidating.

In general, colorful factors have contributed to the intimidating rate of small- scale business failures. What are these causes? Can the coitus of an individual cause failure in business? Could the knowledge position affect business performance? Are small scale business in Nigeria under financed? These questions form the statement of problem of this study.

PROBLEM( S) THAT THE STUDY WILL BE CONCEMENT WITH

This study concerns the causes of small- scale business failure in Enugu. The study will be limited to two named profitable conditioning in the area of business centers and caffs in the form of shy to meet the rising cost of exploration, stability of sufficient books by Nigeria authorizes the area of exploration and other problem s associated with the collection of data.

The original apathy displayed by some repliers to levy information posed a problem to the exploration. Above all time constraints constituted a major limitation. still, the exploration has tried to do a good work irrespective of the forenamed constraints.

. The Significance Of Studying The Area

Two major places are anticipated to be played by small- scale business if given acceptable support in the present profitable circumstances in Nigeria. The first is the part of back ward-forward liaison which in practice means the part of bridging the gap between the rich and the poor, the alternate part which in factual sense is incompletely related to the first is that of raising the over each development conditioning of the nation.

This study thus is intended to expose the colorful, factors, which make small- scale businesses fail than succeed. If is the experimenter’s strong belief that the knowledge to these colorful factors is the secret behind the success of those entrepreneurs that stay alive against all odds. The study will give a quid to prospective entrepreneurs who may wish to be tone- employed especially in the line of the business studied. Inversely important is the fact that this study will give accoutrements for unborn exploration in related content especially given the death of applicable books in our libraries. It’ll also enhance mains knowledge in the field to business operation by raising certain issues likely to engender farther exploration.

Description Of Terms

The following terms are defined and explained in order to kind clarity and remove ant nebulosity as will as enhance understanding the entire textbook. These are Small- scale business, Import- negotiation, exported, import creation, caffs and business centers.

A SMALL- SCALE BUSINESS

This refers to business establishment employing lower than 160 persons the tone- employed workers who may not have employed other person than himself is also included. The description is thus grounded on the employment statues of business which supposedly area largely capital ferocious similar problem are answered regarding similar establishments as small- scale and not qualifying them to be grouped as large- scale in some countries, the extents of capital investment seems as capital with labour but in ours it’s the employment status of establishment that forms the base for distinguishing between the small and large scale business.

IMPORT Negotiation

This is policy replacing significances by domestic product under the protection of high tariffs or import proportions. Import negotiation reduces world trade and involves suppressing the principle of relative advantage. To prompt this policy, countries roof to use to tariffs and proportions to direct domestic

B IMPORT Negotiation

This is a policy replacing significances by domestic product under the protection of high tariffs or import proportions. Import negotiation reduces world trade and involves suppressing the principle of relative advantage. To prompt this policy, countries tend to use to tariffs and proportions to direct domestic coffers down from the primary products in which they had a relative advantage into artificial manufacturing where they had a relative disadvantage.

C Import- LED system

Import- led growth refers to product and income growth through exports rather than the relegation of significances.

D EXPORT PROMOTION METHOD

In discrepancy to import- led system, import- creation system refers to the collaboration of domestic price with transnational price and to encourage both exports and significances by setting a realistic exchange rate and removing import rustications. It’s thus a matter of setting price impulses in such a way as to insure that the home request doesn’t come more economic than the foreign requests.

BUSINESS CENTER

Place where different types of business easing outfit like Photostatting machines etc are made available for guests who could use them in exchange for payment.