ABSTRACT
This study was carried out to investigate
into the Survival Strategies in small Scale Business in. Lagos State (a case
study of some selected small scale industries). Information was sought on the
activities and the performance of the small scale enterprises in Lagos State in
the areas of loan acquisition, marketing research, personnel approaches, strategic
locations, training and development. The research method used for the study was
mainly descriptive with the aim of
obtaining primary data on the survival strategies being designed, developed and
implemented by the selected small scale industries (i.e. Becco Furniture Enterprises
Nigeria Ltd. And Atlas. Drugs Company) as well as how these strategies affect
each of the organization. The sources of data used for the study was primary
source (i.e. interviews, questionnaires, observation etc. Secondary source was also used which
'includes libraries, other information centers on desk studies etc. The
findings of the study was based on capital, marketing research, training and
development, personnel policies and location from the data collected, the research
concludes that small scale business industries were unable to receive loans
from financial institutions, which has been a shortcoming on the part of the
entrepreneurs due to illiteracy or lack of collateral needed. Also most small
scale industries do not research on the areas of marketing
their product or some other promotional activities and this affects sales.
Training and development also has hindrances to the effective performance of
the small scale businesses, since most employers do not train their employees
to acquire technical expertise. The researcher recommend that since small scale
industries are very vital, to our economy, it is pertinent that, for an
entrepreneur to have effective efficient functioning
of these small scale industries in the areas of (capita1 loan acquisition, marketing research, personnel policies,
implementation, training and development and strategic location) he or she must
aim primarily towards a long survival of that business by implementing on the strategies and policies mapped out based on the
above stated areas. The recommendation
based on capital is that, since government has set up many institutions to help
in providing needed capital, the entrepreneurs should endeavour to utilize
these opportunities and acquire the needed capital/loan facilities. On training and development, the researcher recommends
that adequate training and development of employees should be embarked upon so as to acquire the necessary skills needed for
effective operations.
TABLE OF CONTENTS
CHAPTER ONE - INTRODUCTION
1.1 Background
of the Study
1.2 Statement
of the. Problem
1.3 Research Questions
1.4 Purpose
of Study
1.5 Significance
of the Study
1.6 Scope
and Limitations of the Study
1.7 Definition
of Terms
CHAPTER TWO –
LITERATURE REVIEW
2.1 Introduction
2.2 Approaches
to Defining a Small Scale Business Industries
2.3 A
Nigerian Approach
2.4 Historical
Background of the Selected Small Scale
Industries in Lagos State.
2.5 Starting
a Small Scale Business Industry
2.6 Scope
and Fields of Small Scale Business
2.7 Importance
of Small Business Enterprises
2.8 Small
Scale Industries and Strategic Marketing
2.9 Problems of Small Scale Business
Enterprises
2.10 Causes
of Business Failure
2.11 Some Survival Strategies for Small
Scale Business
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Method
and Sources of Data
3.2 Research
Population
3.3 Questionnaire
Design/Administration
3.4 Method
of Data Analysis
CHAPTER FOUR -
DATA PRESENTATION AND ANALYSIS
4.1 Introduction
4.2 Explanation
of method of Data Analysis Used
4.3 Presentation
of Findings and Analysis in line with
Research Questions and Hypothesis
CHAPTER FIVE: DISCUSSION
OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary
of Findings
5.2 Conclusions
5.3 Recommendations
References
Appendix
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
In the present day Nigerian economy,
small-scale businesses are predominant. The importance can only be fully
appreciated when one realizes the dominant role it plays in our economic
development. Small scales industries are active in all sectors of economy.
However, their influence is mostly experienced in distributive trade, transportation
and loca1manufacturing. Their major functions are mostly mobilizing capital for
investment, providing goods and services for the society at large. Creating
employment for job seekers and contributing towards the community development.
In careful study of the economics of Lagos State, one will observe that the
little progress made so far could not have been made without the activities of
small-scale business being carried out in the State. Most of the individually
owned organizations often times provide capital to some of their workers to
start off their own small-scale business as a reward for years
of loyal service.
Owing to the important role of smalls
scale industries in the economic development in Nigeria, 'the Federal
Government of the Federal Republic of Nigeria, introduced and established some
schemes and support agencies to help in the development and solving of small
scale business-problems. Some of these support agencies include the National
Directorate of employment (NDE), Entrepreneurship Development Programme (EDP)
Small Scale Industries Division of the Federal Ministry of Industries, Industries
Development Centres (IDCS). The goal of this programme (NDE) is to grant loans
directly to young graduates to establish a small-scale industry of their
choice. The programme was established in 1988 and it sparked off the highest
number of small-scale businesses throughout
the country. The area of production/operation includes soap making, cosmetics,
dressmaking etc. The small-scale industries pay lower taxes, free technical
advice add also the advantage of favourable government regulations and lower overhead expense.
With the introduction of structural adjustment
programme for economic recovery, minimized or reduced dependence on imports and
to bring the economy back on the path of steady and balanced growth. With this
introduction (i.e SAP) into Nigeria by the. Federal Government, the scope of
the business operations of the small-scale industries shows their strength in
the sectors of economy such as the commercial sector (i.e. whole seller and
retailer), service industries on contract construction industries.
Nzelibe 1988 says despite all these
privileges, the general economic condition of small-scale industries is that
the owners are weak. The financial institutions stringent requirements in
securing loans have almost squeezed the small-scale enterprises out of
business.
At least three (3) out of every four
(4) small-scale businesses fail each year. It is absolutely difficult if not
extremely impossible to obtain statistical data on the mortality rate of
small-scale businesses
yearly in Nigeria. The reason being that there is no legal requirement
enforcing the regulation of small-scale business failure. Only the quoted companies are required to give notice of
intention to wind-up. However, many professional observations have been made on the rate of business
discontinuation in Nigeria. The committee on small-scale industry
administration contends that 90% of such failure could be traced to lack of
proper planning; inexperience, inadequate managerial competence, inadequate
financing, poor-record keeping, and weak marketing skills. The remaining.
10% are accounted for by neglect on the part of the entrepreneurs, on the part
of employee and natural disaster. Examples of professional
observations made on small-scale businesses that have been discontinued are
that of the popular kitchen tower restaurant formerly situated at Omole Ogba
Opposite Murhi House which was set up in 1998 owning to lack of proper management. The former restaurant buildings have been
converted to offices. Another business was that of Textile Mills Ltd. That
majored in the manufacture of textiles and fabrics and also clothing materials
to cater for clothing, of the masses.
Due to mismanagement and misappropriation of fund, lack of good managerial
ability on the part of the management of the company, it got folded up in March
2002. Another of such business was the
Anjorin Cooperative Society Oil Mill, Odogunyan. This Co-operative society Oil
Mill was owned by Group of women who initiated and sited a palm kernel produce
industry in 1990 with the aim of enabling the villagers/indigenes to crack
their palm kernel with ease. However, the service did not last long as the machine broke down in 1992
and has been for repairs till date.
Therefore, the general aim of this study should be on formulating an effective strategy for survival of small-scale industries particularly in Lagos
State.
1.2 STATEMENT OF PROBLEM
With reference to investigating into and bringing out the survival strategies in
small-scale businesses in Lagos State, it is most annoying to note that despite all, the privileges from the Federal Governments schemes and support agencies
established to boost the small-scale business e.g. the National Directorate of
Employment (NDE) and Entrepreneurship Development Programme (EDP), the general
economic condition, of small-scale industry is weak. The major problem if the worsening economic
state caused by the present down tum 'in the economy. Although, most of our economic policies are geared towards big businesses,
the risk of starting a small-scale business and rapid failure of these ventures
scare many people away from starting a small- scale business or industry.
There has been low scale volume as a
result of an underlying problem such as poor supervision and control by sales
managers, inadequate co-ordination of the various kinds of promotion poor
compensation plan and no motivation and so on. Consequently, due to the
importance of small scale enterprises in our dynamic economy, it is pertinent
to find out the problems .associated with these small-scale enterprise and possibly
proffer a solution in terms of strategy formulation so that the aims and objectives for which such enterprises
is established shall be achieved.