Prospects And Challenges Of Setting Up Small Scale Businesses In Nigeria

Project and Seminar Material for Entrepreneurship

Prospects And Challenges Of Setting Up Small Scale Businesses In Nigeria


Abstract


This work is a review of the problems and prospects of setting up small-scale business in Nigeria. The Statement of Problem identified were setting problem caused by poor planning, finance problem caused by lack of financial support and poor funding and multiple and high Taxes. While the prospects of Small-Scale Business in Nigeria can be subdivided into: employment opportunities, job creation and contribution to total Gross Domestic Product (GDP). To meet the general objective, the study will focus on the following specific objectives: To identify the effect of poor planning to the management in small-scale business, to examine how lack of financial support and poor funding can lead to Finance problem of small-scale business and to determine how Multiple and High Taxes influence the management of small-scale business. The descriptive survey method was used and the research tool was questionnaire. 9 respondents answered the questionnaire. Data analysis using likert scale and presentation was done by the use of tables. The findings from the study showed mainly that there is evidence to prove that poor planning affects the management in small-scale business. Finally, solutions and recommendations were proffered on how the poor planning to the management in small-scale business should be improved to help their productivity by combination of critical success factors. The write up is duly summarized.


Chapter One


Introduction

1.1 Background of the Study

It is a well-known fact that for every economy to thrive, much emphasis needs to be placed on the establishment of small businesses and the funding of the already existing ones. Aside its importance to the economy, it is a sound way of reducing unemployment in Nigeria.

Every big business starts as a small business, and it started with an entrepreneur (small business), who at first, earns little or no profit. It was the new ideas of small business that brought most big business empires that create multiple jobs for our teeming youths today in Nigeria. Untried ideas become annulations that become concepts that changed the business world. Small business is the basis for the economic back bone of many developed nations. Entrepreneurship is simply what makes a small business grow. Entrepreneurship occurs when an individual develops a new venture, a new approach to an old business or idea, or a unique way of giving the market place a product or service by using resources in a new way under conditions of risk. Small business triumphs and entrepreneurship are closely related to it. It is difficult to separate them.

The unemployment situation in the country coupled with the new government instinctive towards easing social tensions among unemployed youths, through the programmed of the National Directorate of Employment (NDE), were intended to lure a lot of unemployed Nigerians, including graduates into self-determination through self-employment. Graduates and school leavers are now realizing that government and the established private companies are not ready to come to their aid directly, through paid employment due to the dividing state of the economy.

Government has been playing appreciative role in promoting the survival and growth of small-scale enterprise in recognition of them flexible and adaptive nature as well as their re-generative power in promoting economic growth and development. Government also encourages people to establish their own small scale businesses so as to reduce the problem of unemployment in the country and also reduce the problem of importation of goods, more so, to encourage exportation. Government in believing that a dynamic and growing small manufacturing sub-sector can contribute significantly to the implementation of a wide range development effectives, has thus enunciated various policies to encourage their proliferation and make them veritable engines of growth and development.


1.2 Statement of the Problem

It has long been established that small scale businesses or enterprises is an economic booster but setting up this small or medium scale businesses has been an issue in Nigeria since most of the small businesses that have been established has either been stalled or have closed down completely. The lack of growth of small businesses in Nigeria even when some of these businesses have been well funded has been a cause for serious concern as it has made many small business owners job seekers again.


1.3 Objectives of the Study

The following would be our aims / objectives of embarking on this study

  1. The examine the challenges of setting up small businesses in Nigeria.
  2. To examine the prospects of setting up successful small businesses in Nigeria.
  3. To study the importance of setting up small scale businesses in Nigeria.

1.4 Research Questions

  1. What are the challenges of setting up small businesses in Nigeria?
  2. What are the prospects of setting up successful small businesses in Nigeria?
  3. Are most small businesses established in Nigeria successful?
  4. What is the importance of setting up small businesses in Nigeria?

1.5 Research Hypotheses

  • Ho; there is no significant relationship between the method of SME setup and its eventual success.
  • Hi; there is a significant relationship between the method of SME setup and its eventual success.

1.6. Significance of the Study

The outcome of this study would greatly benefit prospective small business owners on how to make their small businesses thrive.

This study would also be of importance to economic policy makers, researchers and relevant stakeholders who are interested in an SME driven economy.


1.7 Scope / Limitations of the Study

This study is on the prospects and challenges of setting up small scale businesses in Nigeria with Uyo local government serving as the case study.

Limitations of Study
1. Financial Constraint

Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

2. Time Constraint

The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.


1.8 Definition of Terms

SME:

Small Scale Enterprises

Prospects:

A person regarded as likely to succeed or as a potential customer, client, etc. it can also be the possibility or likelihood of some future event occurring.

Business:

Commercial activity.


Chapter Five


Conclusions and Recommendations

5.1 Conclusions

Different SMEs meet the above mentioned challenges in different ways. Clearly there is no magic bullet in achieving success. Business success is a consequence of embracing the whole package of strategies in order to succeed. Selling a variety of products or offering a variety of services is just as important as embracing prudent financial set up of systems.

The development of SMEs and its effective promotion have not been approached seriously in Nigeria; hence, the lack of their impact in the economy. In Nigeria, various governments instituted various programs aimed at developing SMEs sector. The Non-Governmental organization and Donor Agencies are currently involved in the promotion of SMEs in Nigeria.

Access to credit continues to pose a major problem to SMEs sector in Nigeria. The traditional financial institutions have not been able to meet the credit needs of the SMEs. Since the introduction of economic reforms, more SMEs have been forced to the informal institutions for credit. But the supply of credit from the informal institutions is often so limited to meet the credit needs of the SMEs.


5.2 Recommendations

Based on the finding, the following recommendations were made. Finally, based on the survey findings and available literature, we propose the following guidelines and strategies that SMEs can use to boost their performance.

It is appreciated that each business has its own unique combination of critical success factors, but some are important for all businesses. First small businesses should have a global outlook‘. Businesses of all sizes across the globe can interact and share information, technology and products. Small businesses should consider what global trends are affecting availability of resources, increasing or decreasing demand for products or service and where there is an unfilled need one might be able to meet. This may prove a challenge to SMEs but the government can step in here to provide information on business trends.

Government can accelerate the development of markets for financial services suited to the special characteristics of SMEs by promoting product innovation and building institutional capacity. In financial markets, improving SMEs access to credits requires an increase in the number of financial institutions that find lending to SMEs to be profitable and therefore sustainable.

Easy accessibility to credit through specialized or development oriented banking or financing institutions. Funds being made available through these sources should be given at preferential interest rates.

The government could also assist by establishing a well funded National Credit Guarantee Fund that will act as buffer for credit facilities from banks and other financial institutions over and above the equity provided under SMIEIS.


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


FOR STUDENTS OUTSIDE NIGERIA
CLICK HERE To Purchase Material ($15)

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  1. Payment Details

  2. TOPIC: Prospects And Challenges Of Setting Up Small Scale Businesses In Nigeria

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

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.