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.