THE PROBLEMS OF SMALL-SCALE BUSIESS MANAGMENT IN ENUGU STATE (SELECTED CASE STUDIES)

ABSTRACT

This study surveyed the management of small-scale industries and its consequent problems in selected companies in Enugu.

In carrying out the research, a total of three companies were chosen and their management staff studied.

A total of six managerial staff from three companies were selected as the population ad  questionnaire  were  distribute  to  them.    There  was  no  question  of  random sampling  as  the  population was  only  made  up  of  mangers  of  the  small-scale industries who were few in number.   Responses to the questionnaire were later analyzed with the aid to percentages.

Four research hypothesis were used and were also analyzed with the aid of percentage.

 There   are   some   major   problems   militating   against   small   business management.

 The major problems faced by entrepreneurs are financial and managerial.

 The inability of small-scale business owners to secure loans from financial institutions constitute a major obstacle to the growth of small businesses in Enugu. Non-exploitation  of   both   government  programmes  for   assistance  and constancy services by entrepreneurs affect the growth of small business in the area under study. It was also discovered that other problems faced by small business entrepreneurs include:- insufficient infrastructure.   The effects of galloping inflation, low level of manpower, inability of the businesses to maintain quality standard high cost  of production materials and competition form large companies. These were discovered from the oral interview conducted.  It was also discovered that a relationship existed between the level of education of entrepreneurs and the proficiency exhibited tin handing management problems. The researcher concludes that if these obstacles are tackled, there should exist good prospects for small businesses in Enugu and in Nigeria as a whole.

CHPATER ONE

INTRODUCTION

1.0      AN OVERVIEW OF THE STUDY

The Nigerian economy appears to have been able to reap the advantage obtainable from small scale industries scheme (SSIS) in the past.   These include stimulation of indigenous entrepreneurship, transformation of traditional industries etc.  in the same vein, these industries complain about neglect or lack of government interest in their search for rapid development.   The existing lukewarm relationship was not in the best interest of the economy.  As will be shown later, the experiences in many positive impact on the economics for many nations both developed and developing.

It is for these reasons that the government of Nigeria (Federal and State)

started to show interest in SSIS from the 70s to the present day.   Some of the positive actions taken by government include providing funds for some research into these industries, creating SSIS division or department as well as small-scale credit schemes in the various states and at the Federal level giving the subject a place in the national development plans of the 1970s and 80s particularly in the1981 – 1985 plan.

According to Okoye, (1996-175) The Fourth National Development Plan recognized that the annual rate of growth of output of small-scale industries of over thirty percent was much higher than that of the whole of the manufacturing sector of which it is subset and the contribution of the small-scale industries to value added was positive and infact, rising.  To give adequate encouragement to the SSIS so that they could develop, grow and contribute substantially to the growth of the whole economy.  During the current plan period, the government planned to undertake the following:

1.        Provide more loans for small- scale industries

2.        Provide the small-scale industrial scheme with infrastructures, extension services and other incentives and

3.        Encourage the Nigerian Banks for Commerce and Industries to be more actively involved in the affairs of the small-scale industries scheme.

The implementation of the few programmes that have been outlined for the developing of the small-scale industries scheme in the past have often been hampered by the death of information on industries most especially with regard to their \number, size of employment, location, the constraints to their development, what motivate them, their economic contributions and so on.  Hence, the need for adequate research into them to provide the basic data for effective planning. Detail and extensive nations-wide research on these industries in Nigerian have

generally been lacking until the pioneering work of the industrial research unit of life in the early 1970s.

The first in the series of surveys carried out buy the Ife unit of SSES, covered the then Western State, Kwara Sate and Former Mid-Western State.  A survey SSES in the former North Easter State was also carried out by this unit.  The industrial survey unit of the University of Nigeria, Nsukka, and the Ahmadu Bello University Zaira also carried out similar studies in the remaining of the twelve state of the cournty6 at that time.

The objectives of those studied were similar and were meant to study and analyze the structure of SSES and, the pattern of ownership management and control in the SSES and as well as the size of employment, marketing procedures and level of education and training in the industries.   The studies also sought to examine the extension services available to the industries and the impact of public policies on their general performance.  The analysis of all those factors were aimed at assessing the role of small-scale industrial scheme in Nigeria’s economic growth. The research group carried out an enumeration exercise on th4e SSES in the states and attempt to measure and analyze certain variables and factors that were relevant to the achievement of the objective set.   These variables include the level and source   of   capitalization   ownership   structures,   age,   level   of   education   of entrepreneurs and employment.

A  few years  ago,  the Federal Ministry of Industries commissioned some consulting firms and other groups of individuals to carry out a nation wide survey of SSIS. Theses studies were aimed at assessing the impact of the exiting SSIS on the development of the economy of each state. They were also to examine the linkage effects of output of small manufactures on bigger industries and vice versa.   In addition,  the  study  sought  to  determine  the  impact  of  Federal  Government Assistance to they state for the development of SSIS credit and other schemes. The researchers working on these projects were also mandated to evaluate the performance of industrial centre, which were springing up in the state.  Finally, the project tends to determine the potentialities possessed by the states for the establishment, development and growth of small-scale establishment in the state.

While these studies could have been said to provide a very useful insight into the operations and potentials of SSIS, they left many questions unanswered.  The gap created by this is that this present study is back to fill, as will be shown in the scope of the present study.   That apart, it is also important to emphasis that the study of these industries should be a continuous exercise as they are plagued with different problems at various stages of their development process.  An attempt will be made in this study to carry out a more comprehensive and detailed study on the problems of small-scale business.

Osoba, (1998:3) noted that in recent times government policies in Nigeria emphasis  small-scale business  expansion and  setting  up  new  ones  by  private industries through the establishment of people’s bank, community banks, Nigeria bank for commence, credit and industry, export promotion thought many incentive to discourage export import and encourage local industries small-scale industries scheme (SSIS), geared towards encouraging the growth of small business.

1.1      THE STATEMETN OF THE PROBLEM

This study looks into the management of small businesses in Enugu and also focuses on their problems and prospects.   It should be noted that the number of small business in Enugu Urban has been on the increase in recent times.  This trend of event therefore suggests that in the years to come, the rate of entrepreneurship will rise tremendously.

The problem, therefore, is to investigate the management of these small

businesses (with special emphasis on selected enterprises) in Enugu Urban so as to find out if there are problems militating against them and to project relevant recommendations to that effect.   This will in turn help entrepreneurs in the management of their businesses.

1.2 THE OBJECTIVES OF THE STUDY

The objectives of this study are:

 To investigate into the management of small businesses in Enugu.

 To fined out the objectives; strategies and responsibility of small businesses in Enugu.

 To find out the problems of small business in Enugu.

 To make useful recommendations which aimed at providing lasting solutions to the hindrances.

1.3      THE RESEARCH HYPOTHESIS

The study is rooted on four key hypothesis

1.        There are no major problems face by small businesses in Enugu.

2.        The greatest problem faced by entrepreneurs are financial and managerial problems.

3.        The inability of small business, ownership to secure loans from financial institution constitutes a major obstacle to the growth of small business in Enugu.

1.4      SIGNIFICANCE OF THE STUDY

The significance of this study is inherent in its objectives, which generally study the management and problems of small-scale industries in Enugu.

The study is significant because it identifies the problem areas in small-scale businesses and projects relevant recommendations to solving them.

Furthermore, the findings in this study will serve as guide to entrepreneurs, investors and prospective investors in the area of small business, showing them how to use the ideas and techniques presented in the study to foster indigenous small- scale businesses.

Finally, it will give the financial institutions the opportunity of self-appraisal to see if they meet the needs of small-scale business sector.

1.5      THE LIMITATIONS OF THE STUDY

The study is not entirely exhaustive because it is subject to the following limitations, which are posed by the Nigerian environment.

1.        The researcher was faced with the problems of limited financial resources available to her to meet the demands of the research.  This s evident in the number of small businesses studied in this work.

2.        In gathering the needed information for the analysis, the researcher was faced with resistance from entrepreneurs who were afraid to give out information  about  their  business  which  could  result  in  loss  of  their business or government tax officers may be attracted.

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