This project is a review of The problems and prospects of management of small-scale
business in Nigeria. The Statement of Problem identified were management problem caused
by poor planning, finance problem caused by lack of financial support and poor funding and
multiple and high Taxes. While the prospects of Small Scale Business in Nigeria can be subdivided into: employment opportunities, job creation and contribution to total Gross
Domestic Product (GDP). To meet the general objective, the study will focus on the
following specific objectives: To identify the effect of poor planning to the management in
small-scale business, to examine how lack of financial support and poor funding can lead to
Finance problem of small-scale business and to determine how Multiple and High Taxes
influence the management of small-scale business. The descriptive survey method was used
and the research tool was questionnaire. 9 respondents answered the questionnaire. Data
analysis using likert scale and presentation was done by the use of tables. The findings from
the study showed mainly that there is evidence to prove that poor planning affects the
management in small-scale business. Finally, solutions and recommendations were proffered
on how the poor planning to the management in small-scale business should be improved to
help their productivity by combination of critical success factors. The write up is duly
TABLE OF CONTENTS
Tite Page i
Certification Page ii
CHAPTER ONE: INTRODUCTION
1.1: Background of the Study 1
1.2: Statement of the Problem 3
1.3: Objective of the Study 3
1.4: Research Hypotheses 4
1.5: Significance of the Study 4
1.6: Scope of the Study 5
1.7: Limitations of the Study 5
CHAPTER TWO: LITERATURE REVIEW
2.0: Nature of Management in Small-Scale Business 6
2.1 Types of Management in Small-Scale Business 19
2.2: Principles of Management in Small-Scale Business 31
2.3: Concept of Small-Scale Business 33
2.4: Brief History of Small-Scale Business in Nigeria 48
CHAPTER THREE: RESEARCH METHOD
3.0: Research Design 54
3.1: Area of Study 54
3.2: Population of the Study 54
3.3 Procedure for Data Collection 55
3.4: Sample and Sampling Technique 55
3.5: Data Collection Instrument 56
3.6: Validation of Instrument 57
3.7: Method of Data Analysis 58
CHAPTER FOUR: PRESENTATION AND ANALYSES OF DATA
4.1: Presentation of Data 60
4.2: Analyses of Data 60
CHAPTER FIVE: SUMMARY OF FINDINGS, RECOMMENDATIONS AND
5.1: Summary of Findings 67
5.3: Recommandations 69
1.1 BACKGROUND OF THE STUDY.
Small and Medium Industries (SMIs) have been widely acknowledged as the springboard for
sustainable economic development. According to UNDP (1974), developing countries
including Nigeria, have since the 1970s shown increased interest in the promotion of small
and medium scale enterprises for three main reasons: the failure of past industrial policies to
generate efficient self-sustaining growth; increased emphasis on self-reliant approach to
development and the recognition that dynamic and growing SMIs can contribute substantially
to a wide range of developmental objectives. These objectives include efficient use of
resources, employment creation, mobilization of domestic savings for investments,
encouragement, expansion and development of indigenous entrepreneurship and technology
as well as income distribution, among others. Consequently, programmes of assistance in the
areas of finance, extension and advisory services, training and provision of infrastructure
were designed by the government for the development of SMEs to enhance the attainment of
these objectives. However, the full potential of the SMIs in the developmental process have
not been realized, owing to various constraints.
Since the 1960s to date, small and medium sized enterprises (SMEs) have been given due
recognition especially in the developed nations for playing very important roles towards
fostering accelerated economic growth, development and stability within several economies.
They make-up the largest proportion of businesses all over the world and play tremendous
roles in employment generation, provision of goods and services, creating a better standard of
living, as well as immensely contributing to the gross domestic products (GDPs) of many
However, it appears that considering the enormous potentials of the SMEs sector, and despite
the acknowledgement of its immense contribution to sustainable economic development, its
performance still falls below expectation in many developing countries.
This is because the sector in these developing countries has been bedevilled by several factors
such as management inability militating against its performance, and leading to an increase in
the rate of SMEs failure. These factors include the unfavourable and very harsh economic
conditions resulting from unstable government policies; gross undercapitalisation, strained by
the difficulty in accessing credits from banks and other financial institutions; inadequacies
resulting from the highly dilapidated state of Infrastructural facilities; astronomically high
operating costs; lack of transparency and corruption; and the lack of interest and lasting
support for the SMEs sector by government authorities.
The thrust of this paper is, therefore, to articulate the management challenges posed to the
development of a dynamic SME sub-sector arising from some lingering constraints despite
previous and current government measures, which were aimed at facilitating the sub-sector‘s
The very ownership of a business tends to create elitist attitudes and self-orientation. It
imposes a monocular vision which limits the company’s capacity to respond positively and
aggressively to business opportunities and changing business conditions. A person who
stands head and shoulders over his colleagues in perceived authority can create benefits as
well as disadvantages for the business. In cases where he is a poor manager even though a
good entrepreneur, his domination might prevent the enterprise from obtaining the skills and
methods which are needed for further growth.
1.2 STATEMENT OF THE PROBLEM
Presently, small-scale business enterprises in Nigeria are faced with problems that hamper the
growth and development of these enterprises. This support the saying that, the successes of
any business whether small, big or mega depends largely on the performance of people which
is management, finance and multiple and high tax
To ensure the achievement of this management objective in Small-scale business, this
research has been proposed to address the following challenges:
Management problem caused by poor planning
Finance problem caused by lack of financial support and poor funding
Multiple and High Taxes
The prospects of Small Scale Business in Nigeria can be sub-divided into:
Contribution to total Gross Domestic Product (GDP)
1.3 OBJECTIVES OF THE STUDY
1.3.1 General Objective of the Study
The general objective of the study is to determine the problems and prospects of management
in small-scale business in Nigeria.
1.3.2 Main Objectives of the Study
To meet the main objective, the study will focus on the following sub objectives:
I. To identify the effect of poor planning to the management in small-scale business.
II. To examine how lack of financial support and poor funding can lead to Finance
problem of small-scale business.
III. To determine how Multiple and High Taxes influence the management of small-scale
1.4 RESEARCH HYPOTHESES
Given the objective of the study, the following hypotheses are formulated:
Ho1. There is evidence to show that poor planning affects the management of small-scale
Ho2. There is evidence to prove that lack of financial support and poor funding can lead to
Finance problem of small-scale business.
Ho3. There is a significant relationship to show that Multiple and High Taxes and the
management of small-scale business.
1.5 SIGNIFICANCE OF THE STUDY
1. The findings of this study will enable management of small-scale businesses to
appreciate better the need for a proper feasibility study and business plan before
starting up a business for easy management.
2. The study will enable the government, private sector and prospective small-scale
business entrepreneurs to come up with policies that will improve the management of
3. The study will be of immense help to other people and students who wish to carry out
other research in the field or related field.
1.6 SCOPE OF THE STUDY
The scope of this research is limited to the problems and prospects of management of smallscale business in Nigeria.
1.7 LIMITATIONS OF THE STUDY
In carrying out this research many factors served as constraints:
1. Time Limitation: time factor constitutes a major limitation of this research study. It
relates to the fact that the time for this research work.
2. Negative attitude of respondent- The problem facing the researcher with regards to the
respondents relates to the non-cooperation and uncompromising attitude of some
respondents in giving out relevant information or facts. The researcher was able to get
the relevant information at the end of the day.
3. Fund – Due to high financial involvement of this project work, the researcher has
narrowed the study to A.K Block Industry, Abakpa Nike, Enugu
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