CHAPTER ONE
INTRODUCTION
Background to the Study
Business is defined as all commercial and individual activities that provide good and services to maintain and improve people’s quality of life, until recently the concept of small scale business was taking seriously in Nigeria to the fact that most people depended on paid employment after graduating from school.
Small scale business are known to be a major tool for rural industrialization and distribution of income. It is also services as a “nursing bed” for entrepreneurial growth development and maturity (Olutula, 2001).
The federal ministry of commerce and industry defines small scale industry as an establishment with capital investment holding totaling two hundred and fifty-thousand (250,000) with employees ranging from 50-150. There are thousands of business units operating in the country today with majority of them being in small scale business category. Some of these businesses are in soap making, bakery and furniture industries which are usually owned by a single individual known as an sole proprietorship. Some of such business also operate as partnership where people come together pull their resources and share their gain and losses.
In Nigeria especially in the eastern part of the country like the Igbo speaking areas where the people are very enterprising in nature, the small business thrives. Now talking about the survival of small scale industries in a developing economy firstly. Survival can be seen as the state of continuity to live or exist, often depict difficulty or danger. Then we talk about small scale industries according to the Federal Ministry of Commerce and Industry, they are those establishment with capital investment holding totally 250,000 with 50-150 employees.
working capital, stiff competition from larger companies, fear of failure and difficulties in souring raw materials other problems are dwindling market share, how capacity utilization and lack of proper business orientation for instance, poor educational background.
According to Nwakoby (2008) It became clear that, the survival of small scale businesses under these circumstances will be made possible only through systematic analysis of various problems confronting these and mapping out strategies to overcome them through proper understanding of the disturbance in the business environment which rated them making certain strategies a central theme for unifying its activities, it will identify the strength of exploit and the weakness to avoid. However, the effectiveness of any strategy adopted by the industry can only manifest or can only work by the extent of seriousness or extent of survival of people operating them.
The importance of small scale cannot be underestimated. They are given increasing policy attention in the third world countries because the economic condition that prevailed in these countries have made people to argue that the large scale business cannot be expected to play dynamic role that they are supposed to play in the rapid growth and development of the nations.
Therefore this study will specifically develop strategies to the survival of small scale business in Owerri Municipal Council.
Statement of the Problems
Many small scale business have folded up, while a good number of them are in the verge of collapsing largely due to problems rated by global economic recession and Nigeria’s structural adjustment programme (SAP).
It also has become imperative therefore to examine thoroughly the various strategies employed by these small scale business organizations in this ailing period of the Nigeria economy and extent they have gone in ensuring their continued survival. This study has become even more relevant for the fact that out of all known business objectives, survival weight heaviest on the corporate scale because one must know the survival strategies of business in order to make it in any business, without knowing the strategies, business will crash without going far.
Purpose of the Study
Major purpose of this study is an investigation into the survival strategy of small scale business in the developing economy. Specifically, the study tends to achieve the following;
1. Determine the problems facing the small scale business enterprises in Nigeria which are inimical to their continued survival and growth
2. Ascertain why small scale business fail.
3. Identify the various survival strategies adopted by the small scale individuals.
4. Ascertain sources of raw materials open to small scale business
Significance of the Study
There are benefits that will be derived from this work when it is completed.
The study will be of great benefit to the followings; businessmen, students and society.
To businessmen: It will provide business strategies for them to help them survive even when the economy is depressed.
To the students: It will help them be enlightened on small scale business and also provide materials for future research work on the topic.
For the society, it will help all individuals especially those who will want to open their own small scale business in the future because they will know the strategies to follow in order to succeed.
They also provide another dimension of innovations in the teaching and learning.
Scope of the Study
This work will be delimited to the survival strategies of small scale business in a developing economy. It will be limited only to workers in some small scale business in Owerri Municipal.
Research Question
These research questions were formulated in line with the specific purpose to direct the study
1. What are the problems facing small scale business in Nigeria which are inimical to their continued survival and growth?
2. Why do small scale businesses fail?
3. What are the various survival strategies adopted by the small scale individuals?
4. What are the sources of raw materials open to small scale business
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