Management and Operation on Small Scale Business
CHAPTER ONE
Objectives of the Study
- To determine the nature of small scale business
- To determine the Management and operation of small scale business (A case study of Textile unit
- Small business can be started with very minimal capital and without any formality .many small business are operated as family business and can be combined with regular employment.
CHAPTER TWO
LITERATURE REVIEW
Theoretical Framework
Adequate finance is a fundamental growth aspect for every organization, growth and success of SMEs (Haynes & Au, 2006 Cook, 2001). Approaches of finance adopted by SMEs range from first sources which are internal , such as retained profits and the individual savings of the owner manager (Zeng and Wu song , 2008) to sources which are outsourced ,along with family and family financial assistance, (Abouzeedan, 2003), venture capital, trade profit and angel financiers (Baker & He, 2007), and later to legal external sources which are represented by financial institutions and banks besides markets dealing with securities (Chittenden et al., 1996).
The financial development cycle model projected by Udell and Burger (1998) states that financial needs as well as the available financing options for SMEs vary through the various phases in the lifecycle of a company. This means that, at critical growth cycle of a firm, diverse financial approaches are needed. In overall, due to the specific landscapes that characterize SMEs at the initial phase, this type of informational (Udell & Berger, 1998), a lack of transaction history and the great failure risk (Van de Gucht, 2007 and Huyghebaert), this stage of SME heavily funding sources of the insider. The commercial life cycle model adds essentials of trade off, pecking order theories and agency, as well as describing finance sources classically required buy those funding in all stages of c development of the company (Srinivas, 2015).
The commonly believed perception at start up is that firms strain to access debt finance because of opacity of information, low asset base as well as inexperience (Fjose, 2010). The most vital and usually used finance sources at this phase are steady owners‟ personal savings, and support from friends and family members (Gompers, 2010). The role of owner of the firm is not to restrict firms to limited to equity, but include the quasi equity provision.
If individual assets are used in securing debts of the business (Calice, 2012), the firm will attain enough capital to trade, forecasting inadequacy leads to problems of Undercapitalization in the initial stages. In particular cases in such as competition, the firm may collapse (Gompers, 2010).
Pecking Order Theory
The SME pattern of financing clarified by Udell and Berger (1998) differs with hypothesis given above theory of pecking order which was established by Myers in 1984 and proposes that the conclusions of capital structure of a firm are a function of the age of the firm. This theory claims that, internal funding foundations are ranked while those using external sources are blocked until the internal ones are finished.
Thus when looking for funds, a firm chooses interior equity to exterior debt, short term to long term debt, and external equity but exterior debt. Hence the preference order for firm support sources follows supplying debt, issuing equity and internal equity (Holmes and Cassar, 2003).
To relate to the theory, it is significant to recognize distinction between small public firms, private firms, as well and large public firms. Private companies use retained earnings as well as bank debts. Minor public firms utilize equity financing. Big public firms basically use retained earnings and corporate bonds. The available can be understood to mean, direct operation indirect bankruptcy charges and costs play significant roles in the choice of debt of the firm. The relative prominence of the other factors remains debatable. The principle of using the pecking order theory model in this study is that though the model focuses on internal funding sources while the external sources application is delayed until exhaustion of interior sources, as a firm desires internal equity to external debt, short term debts to long term debts, as well as external debt as compared to external equity. The orders of financing firms‟ foundation should follows debt issuing, as well as then issuing equity can be embraced to the success as well as growth of the firms plus thus contribute to the economic growth of the country.
CHAPTER THREE
RESEARCH METHODOLOGY
Introduction
This chapter emphasized the methods that were used in this study which comprised the research design, target population, sample size, data collection instruments, as well as reliability plus data a technique used to analyze data.
Research Design
The cross-sectional design was the most appropriate for this study since data collected was based on a number of SMEs across the industry in Nigeria Descriptive research design is valid for conducting research on specific subjects and acts as quantitative studies‟ precursor. The design was thought suitable as it helped in describing the state of affairs as they presented themselves without manipulating of variables.
CHAPTER FOUR
DATA ANALYSIS, INTERPRETATION AND PRESENTATION
Introduction
The main objective of this study was assessing operations management and growth of medium and small enterprises in Nigeria. The research sought to achieve the following specific objectives: To determine the key operations management issues faced by SMEs in Nigeria and to ascertain effects of innovation on SMEs in Nigeria.
The study targeted 30 SMEs respondents within Textile unit in Nigeria and 25 questionnaires answered and returned contributing to the response rates of 83 percentages this response rates represents and conforms to Mugenda and Mugenda (1999) stipulation that a 70 percentage response rate is excellent. This good response rate was due to additional efforts made through visits and calls to request return of questionnaires.
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
Introduction
The chapter presents findings, discussion, conclusion summary derived from findings and recommendations suggested. The conclusions and recommendations arrived at based on the study.
Summary of Findings
Operation Management Issues
Study findings show that half of the respondents had borrowed from banks, 45 percent had accessed loan for business growth from microfinance, while only 5 percent had accessed loan from friends and relatives. The study findings established that 60 percent of the respondent indicates that great difficulties in accessing loans for business growth these were the majority, 35 percent indicated that there were difficulties in accessing loans, while only 5 percent of the respondents had no difficulties in accessing loans for business growth.
According to the study findings majority of the respondents 75% indicated that it was very important to access the startup loan for the business growth while 25 percent were for the opinion that startup loan was not important in the business growth. Respondents were to rate the above business achievement as result of loan accessibility, the findings indicate that Sales revenues had the largest achievement as result of loan accessibility, shown by mean of 4.5, Physical assets and Market coverage had large achievement due to loan accessibility as shown by point 4 on the scale, financial assets had moderate achievement as result of loan accessibility shown by mean of 3 while profitability has less achievement due to financing as shown by mean of 2.
Operation Management /SMEs
From the findings majority of the respondents 55% had no any training on the financial management skills, while only 45% of the respondents had training on the financial management skills. Respondents indicated that to very large extent training makes entrepreneurs adapt to constantly changing business environment as shown by mean of 5.0, largely financial skills training impact positively on growth of enterprises this is shown by mean of 4.0, respondents indicated that moderately financial training programs can improve the incomes of SMEs as shown by mean of 3.0, and to a less extent financial skills can improve productivity and incomes of entrepreneurs as shown by mean of 2.0.
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