Problems And Prospects Of Establishing Small Scale Enterprises

INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The contribution of small –scale business in fostering economic growth and
development has been well articulated in different areas of this study .the specific
attention on them based on their expected impact and potential contribution on
broad and diversified production base, as well as their accelerative effect in
achieving macro objectives pertaining to full employment, income distribution and
the development of local technology. They are particularly most conducive for
diffusion of management skills and emulation of indigenous entrepreneurship
overtime.
Small business provides financial opportunity and a chance to develop
wealth. It is a place where creative, motivated individuals can use their talents and
expertise to the fullest, because it provides satisfying careers and job opportunities
and it’s also the back bone of the market economy of the word. 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 about Ekene Dili Chukwu Transport, the FAN Milk, Nnewi “Tokumbo”
parts, and even the many commercial banks in Nigeria. Untried ideas become
annulations that become concepts that changed the business world. And so it goes.
Small business is the basis for the economic well being many developed nations
including USA/Japan.

Entrepreneurship is what makes a small business successful.
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. Short of the alternatives, Nigerians including our graduates are
therefore launching themselves into various small-scale business ventures, such as
cottage soap and cosmetics production, fairing, restaurants, fast food, publishing,
writing, block making, garri processing, food processing, refuse disposal, taxi
driving, cleaning services, weaving, baking tailoring, advertising and other same
business venture which depends mostly on local raw materials. The determination
to succeed is also fast becoming the order of the day.
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

business so as to reduce the problem of unemployment in the country and also
reduce the problem of importation of goods, more so, to produce exportation
products.
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. In the
third and for the development plans and the on-going three years rolling plan,
priority has been accorded industrialization with greater emphasis on small-scale
enterprises. The basic activities of government policies as maintained in the
monetary and fiscal policy measures, are to improve the financing and other
supportive services of small-scale business by expanding and improving access to
credit and infrastructural facilities, reducing their production costs, boosting their
profitability, enhancing their survival and growth capacities as well as expanding
their contributions to non-oil exports by making their products competitive in the
export markets.
Hardly could any major industry succeed without the services of small-
business enterprise. The major goals of any profit oriented business are to make
profit. A company will make more profit if statistics its customers need better
them the competitors. Therefore in the contribution of small-scale business,
bakeries would produce what the customers want and by so doing they maximize
profit and only bakeries that are effective and efficient can satisfy customer’s
needs. In reality, it is possible to run a business without profit for a time, but it is
not possible for to survive for one day without customers. Customers are the

central theme of any business. Without a total commitment to them, contribution
to economic growth and development will have limited and brief effects.

1.2 STATEMENT OF THE PROBLEM
Bakery is in the production industry the quality of products rendered by
our Bakeries have been attracting criticisms from people in all works of life. The
civil servants, business men and the general public are all very critical of
production of cookies like bread, chi-chin, cake, meat pie, boons etc. The
complaints ranges from those of poor quality of products, poor packages, high
prices, poor delivery, shortage of skilled manpower which affects productivity and
restrain expansive the use of potassium bromated which National Agency for food
and Drug Administration Commission (NAFDAC) banned for health purpose.
Most bakeries do not put their customers in the prime place as they
supposed to be. There is now keen competition and to compete means to
contribute to economic growth and development. Dickson (1971:4), agreed with
this view when he said that small scale enterprises are ploughed by inadequacies
and serious miss-uses of business records and business information. The problem
of poor or wrong location of an industry affects its production. Such as nearness to
raw materials, market, sources of power and access to supply of labour and
transport facilities etc.
Government incentive in industries has previously directed to public
investment neglecting private initiative. But a diversified and self-sufficient
economy must take into consideration the importance of private sector in capital
formation.

1.3 OBJECTIVE OF THE STUDY
Based on the fact that one cannot build a house on a platter of gold without
encountering one or two hassles here and there, so in the genesis and revelation of
this work as the researcher encountered several problems the course of writing,
which ranges from lack of time, financial and material constraints to the inability
of reaching all members of the sample due to transport problems and even those
reached tend not to render full co-operation thus the total number of people
interviewed became smaller.
Other limitations which the researcher encountered in the course of writing
are that some of questionnaires distributed to the respondents were not returned
despite one or two reminders sent to them, while those that were delivered by
hand were non-challantly filled. As such, there have been criticisms about the
bakery industries in the way they render services to their customers. i.e. They do
not see the customers as king lot in terms of national output and employment.
Moreover, Nigeria has various policies on small-scale enterprises in recent
National development plan and also in the structural Adjustment programmed
(SAP). The researcher wants to carry out a research on what bakeries do and the
role they play in economic growth and development the researcher also wants to
have an idea base either to support all the sources about the poor impression
people have on how to improve their production so as to contribute effectively in
national economic growth and development.
Bakeries can do more individualized jobs for customers and thereby attract
them on the basis of specialty product quality and personal services rather than on
the impersonal of price or mass production of largely identical business. Based on

the above, the need for studying this topic is to show the effectiveness of small-
scale business in national economic growth and development.

1.4 RESEARCH QUESTIONS
The importance of small scale business in the promotion of economic
growth and development has always been at the forefront of development
strategies. However, many developing countries have failed to adopt this strategy
owing to their belief that it is a relatively show process of industrialization which
may not be very compatible with their desire to “catch up” with the industrial
countries. This along with the relative availability of foreign exchange
(particularly through foreign grants and export of basic commodities) in the early
days of independence has encourage many of those countries to follow a different
mode of industrialization for transition from a largely gravis ion society to a
modern industrial sector including Nigeria, adopted import substitution strategy
of industrialization aimed mainly at producing domestically consumer goods that
were erstwhile imported. This strategy of industrialization often requires
continuous dependence on major supplier’s over-seas for the provision raw
materials and spare parts needed for uninterrupted production in these industries.
Therefore, the aim of this study is to know:
 Whether or not small scale business provides opportunities for individual
freedom and economic growth and development.
 To know if small business community makes a significant contribution to
our total economic system as suggested earlier

 To find out whether or not bakery industry contribute to the economic
growth and development of the country.
 If customers are satisfied by the services tendered by bakeries
 To formulate business strategies and make recommendations that would be
more effective in bakery industries.

1.5 RESEARCH HYPOTHESES
To guide the investigation of the issue raise in the problem definition. It is
hypothesized that:
HYPOTHESIS 1
H0: Small-scale industry does not contribute to economic growth & Development
H1: Small-scale industry contributes to economic growth development.
HYPOTHESIS 2
Ho: Lack of finance is the major problem facing small-scale business
Hi: Small-scale business does not have any problem in terms of Finance.
HYPOTHESIS 3
Ho: Bakeries do not encourage the use of local resources in larger
Scale in Nigeria
Hi: Bakeries encourage the use of local resources in larger scale in

Nigeria
1.6 SIGNIFICANCE OF THE STUDY
This study is very timely, especially today that all hand is on desk to
enhance the development and growth of the Nigeria’s economy through the small
scale enterprises. This study will be of immense benefits to cottage enterprises as
well as other small and medium scale enterprise.
Furthermore, the research work will serve as a secondary data to future
researches on small and medium scale enterprises.
Finally, this work is of importance to the researcher in the following ways.
 It will expose and enable him to know more about the organization.
Enterprises under study.
 It will enable him to more about the role, which small and medium scale
enterprises play in Nigeria.
 It will also enable him to know the different meaning/definitions and
classifications of small and medium scale enterprises.

1.7 SCOPE OF THE STUDY
The scope of this study i.e. small scale enterprise is very wide it had to be carried
out in all small-scale industries in Nigeria.

1.8 LIMITATION OF THE STUDY
The study is therefore limited to bakeries industries in Enugu Urban because of
time and material resources to see to the whole nation.
1.9 DEFINITION OF TERMS
NAFDAC: National Agency for Food and Drug Administration Commission
SAP: Structural Adjustment Programmed