Techniques For Assessing Durability Of Small Scale Business Opportunities In Nigeria

Project and Seminar Material for Entrepreneurship

Techniques For Assessing Durability Of Small Scale Business Opportunities In Nigeria


Abstract


This research identified the techniques for assessing durability of small scale business opportunities in Nigeria. The study applied both quantitative and qualitative research methodology to identify the techniques for assessingthe growth of 200 small businesses in Lagos. This was done by (1) identifying the mean characteristics of small businesses that had experienced their first disruption to growth after establishment, (2) identifying the dominant reasons for the growth challenges, (3) identifying the tools and/or actions employed to transgress the first challenge to growth and The most common mitigation tools and/or actions were to hire more staff, hire competent professional management, source external professional assistance in the form of a mentor and restructure reporting lines. This research found that the focus of small business development should focus on these types of businesses because of their propensity to grow faster and employ more staff. This study also emphasised the growth aspirations of the owner/ manager. Lastly a management model for small businesses was presented.


Chapter One


Introduction

1.1 Background of the Study

Probably amongst the most crucial decision facing management today are those concerned with capital investment. Typical of these decisions are those related to expansion through adding of new product lines, factory extension for extension in new sales entries. The significance of a decision of this nature is obvious since based on the decision made, the firm will find itself, committed to a pattern of activity and expenditure that will continue for some time into the future due to huge capital outlay involved.

Uncertainty with respect to the future is considered in any investments decision but the further into the future its efforts are projected, the greater the degree of that uncertainty.

Management appraisal involves the generations of investment proposals, the estimate of cash flow for the proposal, the evaluation of cash flow, the selection of project based upon an acceptance criteria and the continuance re-evaluation of investment project after their acceptance (Home et al 1983).


1.2 Statement of Problem

How high a proposal must go before it is finally approve depends upon how large the capital outlay is the greater the capital outlay, the greater the number of evaluations that may be the required. The object of any system of project evaluation is to be able to compare the profitability of a series of funds usage. Each project will require the use of volume of the firms fund for varying periods and will also provide for the returns of those funds together with an element of profit. The appraisal system should be able to take both of these factors and by comparing them, calculate a comparable rate of return.

This will enable investment projects to be measured against two criteria.

  1. To ensure that only those projects that give the highest rate of return are selected.
  2. To ensure that investments are not made in projects that will give a rate of return less than the cost of capital employed in the business.

It is in this regard that this essay seeks to analyze the role of investment appraisal of small business in Nigeria. This essay will also seek to evaluate and carryout an investment appraisal of small business in Nigeria.


1.3 Objectives of the Study

  1. To determine how entrepreneur characteristics contribute to the durability of small and Medium Enterprises in Lagos, Nigeria.
  2. To establish how business characteristics contribute to the durability of small and Medium Enterprises in Lagos, Nigeria.
  3. To determine how the adoption of Information Communication Technology contribute to the durability of small and Medium Enterprises in Lagos, Nigeria.
  4. To assess how the availability of finance contribute to the durability of small Medium Enterprises in Lagos, Nigeria.

1.4 Research Questions

  1. In what ways do entrepreneur characteristics contribute to the durability of small and Medium Enterprises in Lagos?
  2. How do business characteristics contribute to the durability of small and Medium Enterprises in Lagos?
  3. How does the adoption of Information Communication Technology contribute to the durability of small and Medium Enterprises in Lagos?
  4. To what extent does the availability of finance contribute to the durability of small and Medium Enterprises in Lagos?

1.5 Significance of the Essay

This essay work will be beneficial to the government because efficiency in small business operation will be achieved with high profit thereby entailing more income available for taxation.

Small business operation will enjoy the advantages of new accurate determination of the state of affairs of their organizations. The research work will broaden the idea and knowledge of the entire developing countries of the usefulness by examining impartial views about the methods and making generation based upon through view of all relevant issues thereby clearing point of doubts earlier conceived.

Besides, the researcher hopes that the answers obtained will add an insight to the problems of investment appraising of small scale business in the country and will also serve as a good stepping stone for subsequent researchers in this field of study.


1.6 Scope of the Essay

The focus of the essay will primarily be on the investment appraisal of small business in Nigeria and also in the course of study. There shall be an appraisal of some sources of investment fund of small business undertakings.
Furthermore, this piece of work will want to bare the methods of investment appraisal and in promoting small-scale enterprises in Nigeria.


1.7 Limitations of the Essay

The subject of investment appraisal of small business has not yet enjoy tremendous boost in this country. It is on this premises that we lack books for our literature review and what is more, the few ones we got are written by foreign authors whose tax system differs from that of our economy. Also the lack of time is one of the limitation factors.


1.8 Organization of the Study

This study investigated the factors influencing durability of small and Medium Enterprises in Lagos, Nigeria.

  1. Chapter one presents introduction of the study, the statement of the problem, the purpose of the study, the research objectives, and research questions, significance of the study, limitation and Delimitation of the study and definition of terms.
  2. Chapter two described literature review which helped the researcher to understand the existing body of knowledge well and adopted theory that suit the study. It includes overview of small and medium enterprises in Nigeria, Improvement of service delivery, The theory of Resource based of competitive advantage, business characteristics, entrepreneur characteristics, Integration of ICT, availability of finance by SMEs, conceptual framework summary and knowledge gap.
  3. Chapter three discussed the research methodology. It includes research design, the target population, sample size and sampling procedures, data collection instruments, data collection procedure, validity of instruments, data analysis techniques, ethical considerations and operational definition ofvariables.
  4. Chapter four discussed the research findings. It includes introduction, presentation and interpretation of results as per specific objectives.
  5. Chapter five presented summary of the research findings, conclusion, recommendations and suggestion for future research.

Chapter Five


Summary of Findings, Conclusions and Recommendations

5.1 Summary of Findings

The purpose of the study was to investigate the factors influencing Performance of SMEs in Lagos. In this sub section the research outlines summary of findings based on objectives of the study.

The study sought to determine how entrepreneur characteristics contribute to the durability of small and Medium Enterprises in Lagos, Nigeria. The findings from Table 4.2 portrayed that 74.5% of the respondents were male and 25.5% were female. The result shows that men were more involved in Small and Medium Enterprises in Lagos, Nigeria. These research findings are similar to other studies by Mazzarol et al. 1999; who found out that female were generally less likely to be founders of new business than male. Similarly, (1996, Kolvereid) found that males had significantly higher entrepreneurial intentions than females.

The age of the respondents was sought since its findings would assist the study categorize respondents based on age whereby 13.5% of the respondents were below 20 years, 26.5% were aged between 21-30 years, 44.5% were aged 31-40, 11.0% were agedbetween 40-50 years and 4.5% were above 50 years.

On establishment of Personality traits of the Respondents to examine the entrepreneur characteristics influence the improvement Performance of SMEs in Lagos and the study findings shows 49.5% of the respondents had O-Levelqualification, 29.5% had diplomas 12.5% had qualified with degrees, 7.5% possessed Masters while only 1.0% of SMEs managers had PhDs as their highest level of training. Education level of an SME owner is positively associated with the networking of the SME and the types of networks an SME is engagedin.

Concerning the duration of time business has been in operation, 20.0% of the respondents said they had operated their businesses for a period < one year, 17.5% of the respondents had only operated between 1-3 years. Between 3 and 5 years constituted 47.5% of the respondents, while those who had been in operation for more than 5 years were only 12.5% of the respondents. This is fair representation of SME owner/managers in the business with experience to counter the increase of globalization and technological advancements so that they face fewer problems in order to remain solvent with an increase in expenditure in relation to their earnings.

The respondents were also asked about their personality traits that motivate them to gain competitive advantage against their competitors and the responses were given towards entrepreneurial orientation and readiness, 28.0% of the respondents operated autonomously, 30.5% of the respondents were innovative in their line of business, half 50.5% of the respondents only knew that their business is about risk taking venture while 28.5% of the respondents cited to be competitively aggressive Performance of SMEs.

The study sought to establish how business characteristics influence performance of SMEs in Lagos. The findings showed that 20.5% of the respondents agreed to great extent that diverse business activity improved Performance of SMEs, 33.5% to some extent, and 19.5% to little extent while only 26.5% of SMEs managers indicated virtually nothing to the statement. They also indicated that the employee level of training and skills upgrading as a business activity had an influence on Performance of SMEs whereby 64.5% of the respondents agreed to great extent, 15.5% to some extent, and 10.5% to little extent while 9.5% of SMEs managers indicated virtually nothing to the statement.


5.2 Conclusion

The purpose of the study was to investigate the factors influencing Performance of SMEs in Lagos and the conclusion of the study is analyzed as per objectives in subsections highlighted as follows:

Result shows that men were more involved in Small and Medium Enterprises in Lagos, Nigeria. Female were generally less likely to be founders of new business than male. Therefore males had significantly higher entrepreneurial intentions than females. Reasons for these gender disparities in SMEs include limited access to finance, stringent collateral requirements, Womenโ€™s double duties. The root causes of limited financial success were often attributed to early management practices of the women entrepreneurs. Female owners tended to prefer internal to external sources of financing. In addition, women used smaller amount of capital at the start-up phase and that they are less likely to use financial instruments such as overdrafts, bank loans, and supplier credit.

The findings show that most of the respondents were between 31-40 years of age which clearly indicate that most micro and small enterprises are owned and mainly run by people in their late 20s and early 30s which comprise of the youthful population. The influence of the age of the owner/manager advocates for the younger owner/manager; the argument here rests on the fact that the younger owner/manager has the necessary motivation, energy and commitment to work and is more inclined to take risks and more entrepreneurially active hence improved Performance of SMEs. The logic is that the older owner/manager is likely to have reached his/her initial aspiration. Therefore, there is a significant correlation between age of the entrepreneur and business success.

Majority of the respondents had O-Level training as their highest level of education. The low education background SME ownersโ€™ limited networking hence the education level of an SME owner is positively associated with the networking of the SME and the types of networks an SME is engaged in. The youths are faced with insufficient vocational skills, social capital and limited understanding of market dynamics. An estimated 67 percent of Nigerian youths lack vocational skills after dropping out of secondary school education, and this has led to low service delivery in Lagos. Most of the SMEs had duration of time business in operation between 3 and 5 years working experience. Sector experience or prior SME experience as owner/manager tends to correlate with greater growth.


5.2 Recommendations

On the basis of the findings and conclusions above, this section presents the recommendations of the study as follows:

  1. Increase programmes for SMEs empowerment especially female gender and also enhances adequate business skills mainly attributed to low levels of education.
  2. The County Government to facilitate training and skills upgrading in operation of SMEs to achieve service delivery in Lagos. Improve security and simple business regulatory reforms that have positive outcomes in terms of increasing business service delivery.
  3. Increased rates of ICT adoption for accounting practice in market identification and access, promotion of goods and services and Accounting Information Systems (AIS) which has not kept pace with rapid economic and high technology changes which invariably affects the value relevance of accounting information.
  4. Increased access to finance for youth in improving the SMEs sector.

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 โ‚ฆ5,000 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: Techniques For Assessing Durability Of Small Scale Business Opportunities In Nigeria

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


ย  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.