Effect Of Business Stress On The Performance Of Small Scale Entrepreneur

Project and Seminar Material for Entrepreneurship

Effect Of Business Stress On The Performance Of Small Scale Entrepreneur


This research tends to examine the effect of business stress on the performance of small scale enterprenuer with scope covering One hundred business owners across Lagos State.

A survey design was employed, with the use of simple random sampling technique one hundred business owners were sampled in Lagos state.

Data were gathered with the used of a well structured questionnaire which were distributed to one hundred business owners. These data were analysed and presented on table in percentile.

Five hypotheses were formulated and tested with the use of Chi-Square analysis.The analysis resulted to rejecting all null hypotheses and accepting the five hypotheses.

It was concluded that there is significant relationship between business stress and business performance, there is significant relationship between business stress and work motivation and there is significant relationship between business stress and marital status. Recommendations were offered to these business owners.

Chapter One


1.1 Background to the Study

This study focus on how stress affects the performance of small business entrepreneurs in Nigeria. Before now, entrepreneurs have been recognized as an essential ingredient of economic development. The manner it has been explained in the Western societies has varied from time to time to suit the changing values of socio-economic reality.

To Schumpeter (1961), an entrepreneur is a dynamic agent of change, or the catalyst who transformed increasingly physical natural and human resources into corresponding production possibilities. For any economy to grow and develop there is need for entrepreneurship. Entrepreneurship has been defined as the willingness and ability of an individual to seek out investment opportunities, establish and run an enterprise successfully. Over the years, several attempts have been made to explain economic growth, within the past three decades or so, one factor which has been emphasized as a pre-requisite to economic growth is entrepreneurship.

In the context of our society, an entrepreneur will be assumed to include any person who runs a business. Thus, the man who owns a departmental store, bookshop, beer parlour, printing press, beauty saloon, publisher, manufacturer, wholesaler, retailer etc is an entrepreneur (Nwachukwu, 1990) small and medium scale business owners in this country have on their own made immense contribution to the development of the national economy over the year.

On the other hand, despite the contributions made by entrepreneurs to the economy they are often faced with some problems which include:

High Degree of Business Uncertainty:

Entrepreneurship development is faced with high level of uncertainty associated with enterprise ownership, there is constant threat of government interventions, political instability and degrees etc. Because of these, one has to expect changes in monetary policy, credit policy, etc.

 Limited Profit Opportunities:

This is as a result of low level of real income and limited market, even now, the situation is the same with economic depression and most business enterprise are folding up because they cannot break even what more making profit.

Problem of Power Supply:

Power failure possesses a lot of problem for entrepreneurs which make them spend more for alternative resources.

Insufficient Capital:

Most entrepreneurs find it difficult to borrow from banks, because of the processes involved and because of this reasons, he/she has limited resources to work with.

Other problem encountered by entrepreneurs include family problem, emotional problem, work overload, cultural barrier, work insecurity, work pressure, high cost of materials etc.

All these and lots more causes problem for small scale business owners which might lead to stress. The effect of stress in the work place can be sometimes serve that same researchers have been prompted to equate it effect with “combat stress” or battle fatigue.” (Nelson et al). stress lowers individual and organisational performance which lead to both production and quality suffering (Nelson and Quick, 1996).

1.2 Statement of the Problem

Stress in the workplace is a growing problem with extensive cost to individual, organisations and the society at large. Often times, small business owners are faced with high level of stress, this is because work and its demand often dominate their lives (Jamal, 1997), clear separation between work and non-work activities are frequently non-existence, moreover, an average work day can easily extend to 12 hours or longer (Jamal and Badawi, 1995).

Although many industrialised nations and their citizens might be enjoying the frit of their industrial revolution through ever-higher standard of labour they are enjoying these fruits less than was anticipated. This may be due to large measure to the excessive level of stress in their lives (Karasek et al.,) stress is widely accepted as a potential drawback of small business owners (Akande, 1992 et al).

Therefore, this study will examine how stress affect the performance of small business entrepreneurs and also evaluate the problems associated with stress in business and probably suggest solutions.

1.3 Objectives of the Study

The objectives for this study include:

  1. To determine the impact of business stress on the performance of small business entrepreneurs.
  2. To determine the impact of work motivation on the performance of small business entrepreneurs.
  3. To determine the impact of social support on the performance of small business entrepreneurs
  4. To determine the impact of collegiality on the performance of small business entrepreneurs
  5. To determine the effect of unmet expectation on the performance of small business entrepreneurs
  6. To determine the impact of autonomy in the performance of small business entrepreneurs.

1.4 Research Hypotheses

To provide answer to the research questions arising from this study, the following hypotheses are postulated.

Hypothesis One
  • H0: There is no significant relationship between business stress and business performance
  • H1: There is significant relationship between business stress and business performance
Hypothesis Two
  • H0: There is no significant relationship between business stress and negative affectivity
  • H2: There is significant relationship between business stress and negative affectivity
Hypothesis Three
  • H0: There is no significant relationship between business stress and work motivation
  • H3: There is significant relationship between business stress and work motivation

1.5 Significance of the Study

Numerous studies has explored the causes of occupational stress and these include: the pressures, job dissatisfaction, job insecurity, poor supervision, boring repetitive work, work over load, lack of communication, too much or too little responsibility, poor work/life balance etc (Kaal, 1973). Little is known on how work motivation, social support and collegiality help to reduce the impact of stress on performance of small business entrepreneurs, and how unmet expectation also affects their performance.

This research therefore helps to advance the researchers knowledge in respect to the topic and also enable her contribute to the finding of solution to the problem for which the research is based.

1.6 Scope and Limitations of the Study

The scope of the study is limited to some particular businesses such as the Mechanical/Autorical, Transport Service, Business Venture/Bulk Sales (Antisan). This is to say that the study is restricted to some selected workers and some business executive in Yaba Area of Lagos State, Nigeria.

In the course of the study, there were some setbacks that have hindered the full realization of the objective of this study. First, is that the study is limited to only 200 business owners compared to the large number of entrepreneurs in LagosState.

Also, there was a poor response by some entrepreneurs especially the Transport Service who less believe in paper work and therefore fail to fill their questionnaires promptly, while some collected the questionnaires and refuse to return them thereby reducing the total number of questionnaires distributed.

1.7 Definitions of Terms


Defined as a change which is a result or consequence of an action or other cause.

Business Stress:

Business/Office stress is a state of mental or emotional strain experienced bybusiness owners as well as employees. Workplace stress is a major problem and is becoming increasingly common.

Small Scale Entrepreneur:

Sometimes called a small business, a small-scale enterprise is a business that employs a small number of workers and does not have a high volume of sales. Such enterprises are generally privately owned and operated sole proprietorships, corporations or partnerships.


To face and deal with responsibilities, problems or difficulties, especially successfully or in a calm or adequate manner.

Problem-Based Coping:

Problem-focused coping targets the causes of stress in practical ways which tackles the problem or stressful situation that is causing stress, consequently directly reducing the stress. Problem focused strategies aim to remove or reduce the cause of the stressor, including: Problem-solving.

Emotion-Based Coping:

Avoidance of the emotional distress will distract from the negative feelings associated with the stressor. Emotion-focused coping is well suited for stressors that seem uncontrollable (ex. a terminal illness diagnosis, or the loss of a loved one).


Entrepreneurship is the process of designing, launching and running a new business, which is more often than not, initially a small business, offering a product, process or service for sale or hire. The people who create these businesses are called entrepreneurs.

Business Performance:

Business performance management is a set of performance management and analytic processes that enables the management of an organization’s performance to achieve one or more pre-selected goals. Synonyms for “business performance management” include “corporate performance management (CPM)”[1] and “enterprise performance management”.

1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  1. Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study.
  2. Chapter two highlight the theoretical framework on which the study is based, thus the review of related literature.
  3. Chapter three deals on the research design and methodology adopted in the study.
  4. Chapter four concentrate on the data collection and analysis and presentation of finding.
  5. Chapter five gives summary, conclusion, and recommendations made of the study.

Chapter Five

Summary Conclusion and Recommendation

5.1 Introduction

It is pertinent to note that this research was aimed at assessing the impact of business stress on the performance of small scale entrepreneur, thus the topic “the effect of business stress on the performance of small scale entrepreneur”.

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 challenges associated with business stress on the performance of small scale entrepreneur in Nigeria.

5.2 Summary

The aim of this study was to examine the effect of stress on the performance of small-scale entrepreneur. The results indicated that stress was a positive predictor of long-term survival of small businesses. Thus, the effects of stress on performance are long-term (Fay &Sonnentag, 2002).Every entrepreneur gets a bucket of stress, but they handle it differently to achieve a good business performance. The researcher drew on a control theoretical approach and argued that experienced stress activates strategies to reduces causes of stress and improve business performance.

While the findings of this study proves that stress was negatively correlated with satisfaction, the effect disappeared in lagged analyses. There is a potential methodological reason for this effect. Satisfaction had a high stability across the three waves. As a consequence, controlling for prior satisfaction resulted in a huge amount of variance already explained. It was also discovered that low satisfaction had lagged effects on stress. A control theoretical interpretation of these results would suggest to actively reduce the reasons for dissatisfaction and stress.

5.3 Conclusion

The measurement of stress has gained numerous attentions. Occupational stress may not be well managed without proper measurement. The findings of the present study add to our understanding of the effect of stress in entrepreneurship, providing insights into the processes and mechanisms that allow entrepreneurs to survive and even flourish under conditions that often undermine the health, well-being, and performance of many others. We close, therefore, with the following thought, offered in many stress management workshops: “We can’t always change the world, but we can change our reactions to it.” Basically, this statement suggests that stress is inevitable we are certain to encounter it during the course of an active life. But its effects upon us are at least partly under our own control and depend, to an important extent, on how we choose to interpret and cope with them. Perhaps, in essence, entrepreneurs are especially adept at following this advice in part, perhaps, because the processes of attraction, selection, and attrition result in a population of “survivors” high in psychological capital; and such persons, in turn, are well equipped to deal with the daunting challenges virtually certain to emerge as they attempt to convert the “possible” (their ideas and dreams) into the “real” new businesses providing useful, and valuable, products or services. As suggested by Siu et al (2002) “the problem of occupational stress should be particularly relevant for countries undergoing enormous economic and social changes” because developed countries have recently become aware of occupational stress and how to possibly manage it (Houtman, Jettinghoff & Cedillo, 2007).

5.4 Recommendations

It is recommended that;

  1. Occupational Health Services should be intensified by government in Nigeria. Occupational Health and Safety programmes should be instituted to create sufficient awareness in small and medium scale enterprises in order to manage occupational stress to improve occupational health as well as psychological and physical well-being among employees.
  2. It is also recommended that, health institutions in Nigeria should engage in more collaborative programmes and policies with international institutions such as the National Institutions for Occupational Safety and Health (NIOSH), the Health and Safety Executive (HSE), Australian Safety and Compensation Council, and European Agency for Safety and Health to help ameliorate occupational stress.

Get Complete Project Material

5,000 5000

The Complete Material Will Be Sent to You in Just 2 Steps

Quick & Simple…

Step One Purchase

Make Payment (Through Transfer) of ₦5,000 to the Account Below

Zenith BankAcc No: 1225513212
Samphina Academy
Current Account

Or CLICK HERE To Pay With Debit Card

CLICK HERE To Purchase Material ($15)

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: Effect Of Business Stress On The Performance Of Small Scale Entrepreneur

The Complete Material Will Be Sent To You On WhatsApp After Receiving Your Details
T & C Apply

  Contact Our Help Desk

Need a Different Topic? Perform a Quick Search

List of Related Works

Click on Any Topic to Preview the Content


Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.