FAILURE OF SMALL SCALE BUSINESS IN NIGERIA: CAUSES AND SOLUTIONS (A CASE STUDY OF SELECTED FIRMS IN ENUGU STATE).

ABSTRACT

This study is set to investigate the causes of failure in small scale enterprises in Nigeria, with a view to proffer solutions. In every economy there are simple system as well as complex one. At the simple stage of organization, ownership of business is not always distinct form management; this means that supervision of the business is in the hand of the owner. When the scope of business organization increases, it becomes very difficult for one person to co-ordinate, direct and control. At this point, that ownership and management becomes differentiated. Therefore, it becomes very difficult for the owner to supervise the business enterprise. It will be easier here for management to pursue goals that are different from the objectives set by the owner; which brings about conflicting objectives that can result in business failure. In Nigeria, it will be difficult to believe that a small-scale business enterprise that is owned and managed by the owner can collapse within a twinkle of an eye. Is it as a result of finance, management inefficiency or government policies? This is what the research work is set to uncover. Based on the findings, the researcher concluded that the failure of government in providing a conducive business environment has affected the performance of small scale business also poor management of resources in no small measure has equally affected the growth of small scale business in Nigeria. Therefore, the researcher recommends that government should try as much as possible to provide a stable and conducive environment and hence organization’s should ensure that both human, capital and material resources are effectively utilized.

STATEMENT OF THE PROBLEM

There are a lot of problems which this research work seeks to address. It is in agreement with certain experiences that the inability of the management of the small scale businesses to determine causes of failure may have led to unproductively. Also it is perceived that the inability of the management to develop policies for solving the problem of small scale businesses may have reduced the profitability of such enterprises. Indeed, nothing weakens organization more than when management develops poor attitude to personnel training. Experiences show that the poor attitude of the government to creation of conducive environments for business may have reduced the chances of survival of small scale enterprises. The inability of works to implement management policies just as experiences have shown, may have led to unproductivity.

Again poor financial management strategies may have aggravated the situation just as the perceived inability of management to employ competent personnel may have led to unproductivity. Above all, the poor marketing strategies of most
organizations just as experience can show may not have helped matters. It is in view of this problem that this research work is conducted.

1.3 OBJECTIVES OF THE STUDY

This work is conducted to achieve the following goals or objective

1. To determine the causes of failure of small scale businesses.

2. To find out whether government creates a conducive environment for small scale businesses.

3. To determine whether workers do not implement management policies in small scale businesses.

4. To evaluate if finance options affect small scale businesses.

5. To determine whether the employment of incompetent hands leads to small scale business failure.