Failure of Small Scale Business in Nigeria Causes and Solutions
CHAPTER ONE
OBJECTIVES OF THE STUDY
This work is conducted to achieve the following goals or objective
- To determine the causes of failure of small scale businesses.
- To find out whether government creates a conducive environment for small scale businesses.
- To determine whether workers do not implement management policies in small scale businesses.
- To evaluate if finance options affect small scale businesses.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
Copious literature exists on Small and Medium Enterprises (SMEs) written by various authors and in different languages and for various purposes. This fact underscores the essence, importance and relevance of this sub-sector in the development of any given economy. The experiences of developed economies in relation to the roles played by SMEs buttresses the fact that the relevance of SMEs cannot be overemphasized especially among the Less Developed Countries (LDCs) or rather Developing Countries. In order to highlight the significance of SMEs in relation to the growth and development of a given economy, SMEs have been variously referred to as the “engine of growth”. This stems from the fact that almost all countries that have focused on the SMEs sector and ensures its vibrancy have ended up succeeding in the significant reduction and its attendant enhancement in the quality and standard of living, reduction in crime rate, increase in per capita income as well as rapid growth in GDP among other salutary effects. There is a consensus that if all stakeholders are to show serious commitment to the development of the SMEs sub-sector, it follows that the economy must necessarily witness meaningful transformation and prosperity. A dynamic SME sub-sector is vital and imperative for the overall economic development of the country. Aside from providing opportunities for employment generation, SMEs help to provide effective means of curtailing rural-urban migration and resource utilization. By largely producing intermediate products. for use in large–scale companies, SMEs contribute to the strengthening of industrial inter-linkages and integration. A vibrant, efficient and effective SME sub-sector generates many resultant benefits for stakeholders, employees, customers, employers as well as the entire economy’s benefits. Employees require new skills and knowledge to improve their performance on the job and to compete with their counterparts in other parts of the world. Customers on their part tend to enjoy personalized service and attention because of the keen competition, focus and innovation, which characterise the operations of SMEs. Employers or rather SME entrepreneurs on the other hand are either motivated or compelled by competition to learn and broaden their knowledge and skills in order to meet up with the challenges of maintaining good relationship with their financiers (banks and other financial institutions), auditors, regulators and even their competitors. They achieve this by belonging to and participating actively in the activities of appropriate chambers of commerce, trade groups, various fora, exhibitions, etc where ideas, new concepts and knowledge are shared and discussed. The bottom line of all these is that the relevant SME would remain efficient and profitable and hence contribute to the growth and development of the entire economy.
CHAPTER THREE
RESEARCH METHODOLOGY
Research design
The researcher used descriptive research survey design in building up this project work the choice of this research design was considered appropriate because of its advantages of identifying attributes of a large population from a group of individuals. The design was suitable for the study as the study sought to examine the failure of small scale business in Nigeria causes and solution.
CHAPTER FOUR
PRESENTATION ANALYSIS INTERPRETATION OF DATA
Introduction
Efforts will be made at this stage to present, analyze and interpret the data collected during the field survey. This presentation will be based on the responses from the completed questionnaires. The result of this exercise will be summarized in tabular forms for easy references and analysis. It will also show answers to questions relating to the research questions for this research study. The researcher employed simple percentage in the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to investigate the causes and solution of the failure of small scale business.
In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the causes of failure of small scale businesses in Nigeria.
Summary
The importance of small businesses in offering employment to the pool of unemployed youth and adults in Nigerian cannot be overemphasized. The country unemployment continues to rise with the army of University and polytechnic graduates storming the hopeless labor market on a yearly basis. The government is not creating enough jobs to cater for its ever increasing population, making small business the last hope of securing employment for millions of Nigerians. This study, however, provided insights into our understanding of the challenges confronting small businesses in Nigeria. The study, thus, enjoins the Nigerian government to look seriously into the problems of small businesses in Nigeria with a view of providing succor to them. This study supports the establishment of community banks where small business owners can borrow money without hurdles and very stringent requirements of the high street banks
Conclusion
Contrary to the generally believed notion or assumption, this research found out that access to finance or capital is not the greatest problem facing SMEs in Nigeria. The greatest or worst problem confronting SMEs in Nigeria is managerial capacity. Access to capital or finance is necessary but not a sufficient condition for successful entrepreneurial development. If one has the entire funds in the world and does not have the capacity to manage that fund and does not have the necessary information as to what he/she should do, the money would go down the drain. The top ten key problem areas facing SMEs generally in Nigeria in descending order of intensity include management problems, access to finance/capital, infrastructure, government policy inconsistency and bureaucracy, environmental factors related problems, multiple taxes and levies, access to modern technology, unfair competition, marketing problems and the non-availability of raw materials locally.
Recommendations
Driven by the findings in this research, SMEs in Nigeria have a long way to go for the sector to be relevant, focused, productive enough, and play the crucial role it is expected to in relation to contributing to the growth and development of the economy of Nigeria. The challenges and problems of the SMEs in Nigeria are hydra-headed and hence can only be effectively tackled by a multi-dimensional and concerted approach by all stakeholders i.e. the governments (Federal, State and Local) and their agencies and parastatals, banks, regulatory authorities, tax authorities, SMEs (owners and management), the employees of SMEs, multilateral and bilateral agencies and donors. It behoves the government to create an enabling environment that is appreciably devoid of corruption and bureaucracy, and at the same time, motivating and entrepreneurally friendly. It has to be a two-pronged approach for the government efforts to be effective in recreating a conducive environment in which SMEs can thrive and blossom. It has to be an environment full of opportunities and incentives which would sufficiently attract investors and would-be entrepreneurs including young school leavers who would be motivated enough to opt to be employers instead of looking for paid jobs. For the government to succeed in reinventing the future of SMEs, it has to extend the current reforms to our educational system to make it more functional, relevant and need-oriented and driven. The thrust and emphasis should be on modern technology, practical technological and entrepreneurial studies aimed at producing entrepreneurs. This implies a change in our culture, value system and orientation as well as Nigerians’ overall attitude, ethics and appreciation of the need for every Nigerian to contribute in making our country better than we met it.
Reference
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