Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria

Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria

Project / Seminar Material
Reference ID: PS-24141-TM

DEDICATION

This research material titled “Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Entrepreneurship, Book Authors and Profound Scholars of existing or related project material on “Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

INTRODUCTION

  • 1.1 Introduction
  • 1.2 Background of Study
  • 1.3 Statement of Problems
  • 1.4 Aim and Objectives of Study
  • 1.5 Research Questions
  • 1.6 Research Hypothesis
  • 1.7 Significance of Study
  • 1.8 Scope of Study
  • 1.9 Limitations of the Study
  • 1.10 Definition of Terms

CHAPTER TWO

LITERATURE REVIEW

  • 2.1 Introduction
  • 2.2 Conceptual Framework
  • 2.2.1 Financial Impact Assessment Theory
  • 2.3 Performance of Small and Medium Enterprises
  • 2.4 Performance Measurement
  • 2.4.1 Models of Performance Measurement
  • 2.4.2 Theory and Practice of Venture Capital
  • 2.5 Theoretical Framework
  • 2.6 Venture Capital Investment Process
  • 2.6.1 The Influence of Venture Capital on Growth of SMEs
  • 2.6.2 Influence of Venture Capital on Financial Management of SMEs
  • 2.6.3 Influence of Venture Capital on Management Styles of SMEs
  • 2.7 SMEs Funding Challenges and Interventions
  • 2.8 Problems of SMEs in Nigeria
  • 2.9 Empirical Studies

CHAPTER THREE

RESEARCH METHODOLOGY

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Population of Study
  • 3.4 Sampling and Sampling Technique
  • 3.5 Validation of Research Instrument
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Questionnaire
  • 3.8.1 Interview
  • 3.8.2 Key Informants Interview
  • 3.8.3 Observation
  • 3.9 Statistical Analysis

CHAPTER FOUR

DATA ANALYSIS, RESULT AND DISCUSSION

  • 4.1 Introduction
  • 4.2 Presentation and Analysis of Data
  • 4.3 Test of Hypothesis 1
  • 4.4 Discussion of Findings

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

  • 5.1 Introduction
  • 5.2 Summary
  • 5.3 Conclusion
  • 5.4 Recommendation

REFERENCES

APPENDIX A - “QUESTIONNAIRE”

ABSTRACT

The study scrutinizes the Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria. Investigation revealed that there has never been any real attempt on the part of government to formulate any tangible and lasting policies or programmes to support small business sectors. The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from the respondents for this project. A total of 133 (one hundred and thirty three) respondents were selected for this study to represent the entire population of the study. For null hypotheses were formulated and tested using the one-way ANOVA and the t-test statistical tools at 0.05 level of significance. Primary data were collected from the primary source which questionnaire was used as an instrument of data collection while secondary data were sources from textbooks, journals, newspapers and the internet were employed. The data were presented on a frequency distribution table and analyzed using simple percentage, while hypothesis was tested using chi-square test. This study will be of immense benefit to small and medium scale business operators in particular and other business organizations in general to determine the effective of strategic planning and control. The study will determine the factors or problems limiting the effectiveness of strategic planning and control in an organization. Also, the study looks into the problems or factors militating against the survival of small and medium scale enterprise and tends to make recommendations and suggestions on how to solve these problems. Based on the findings, it was recommended that financial institutions should make access to finance more flexible by reducing interest rates and simplifying loan requirements to support SMEs. Also, the government should invest in critical infrastructure, such as electricity and transportation, to reduce operational costs and enhance business efficiency.

Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria

CHAPTER ONE

1.1 Introduction

The small business strategic plan must communicate the vision and mission of owners to employees and customers. The study will enhance the growth of small businesses in the Nigerian economy through the understanding of the relationship between effective strategic planning and business growth. Small businesses are usually started by a small number of owners or sometimes single owner and usually with no formal procedures and operations. Owners usually manage small businesses with little skills and knowledge to the extent where the growth stage is critical requiring clear vision and mission for success.

As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitations of the Study and Definition of technical terms.

1.2 Background of Study

Nigeria's SMEs (general an umbrella term for firms with less than 250 employees), at present experienced a lot of problems and hardship and this is not just as a result of the economic downfall. There are a number of bottlenecks, including serious under capitalization with difficulty in gaining access to bank credits and other financial markets, corruption and a lack of transparency but most damagingly, a seemingly lack of government interest in and support for the roles that SMEs play in national economic development and competitiveness. Looking back, there has never been any real attempt on the part of government to formulate any tangible and lasting policies or programmes to support small business sector what is more damaging, however, is that this lack of support for small businesses have been negatively complemented by misplaced government intervention in what is seen as the commanding heights of the economy.

Historical facts show that prior to the late 19th century, cottage industries controlled the economy of Europe. The industrial revolution changed the status quo and introduced mass production model, which triggered an unexpected reappraisal of the role and importance of small and medium sized enterprise in the global economy. Findings by economics over the years showed that small firms and entrepreneurships play a much more important role in economic growth and development. Many economics developed and developing here come to realize the value of small business. They are seen to be characterized by dynamism, within innovations, efficiency, and their small size allow for faster decision making process.

Governments all over the world have realized the importance of this category of companies and have formulated comprehensive public policies to encourage, support and fund the establishment of SMES. Developments in small and medium enterprises are sin quo non for employment generation, solid entrepreneurial base and encouragement for the use of local raw materials and technology.

SMEs are important for economic development of any nation because they boost commercial activities and growth. The World Bank report (2013), shows that they are a source of employment that lessens inequalities between cities and villages. They provide employment for the teaming idle youth thereby helping in generating income. Small businesses act as a bridge to foster economic growth in both developed and developing countries (Boateng & Abdulrahman, 2013). Small businesses are not only an influential force in the economic development of the country but also reduce poverty in emerging economic (Amin & Banerjee, 2011). SMEs employ local resources which do not involve high technical skills. Some reutilize by-products from other companies as inputs for their own production. SMEs also aid national output by providing raw materials for larger companies. Furthermore, they are also a source of revenue to government through taxation. SMEs further mobilize domestic savings thereby reducing production costs and increasing industrial efficiency.

Therefore, in Nigeria where the research was carried out, the activities that was conducted is to know the Factors Affecting the Performance of Small and Medium Scale Businesses.

1.3 Statement of Problems

This study has observed a problem facing small and medium scale business as a result of the economic downfall, there are a number of bottlenecks, including services under capitalization with difficulty in gaining access to bank credits and other financial markets. Looking back, there has never been any real attempt on the part of government to formulate any tangible and lasting policies or programmes to support small business sectors. This is where strategic planning and control come in place, government has to effectively plan its policies and formulate programmes that will enhance the growth and sustenance of SMEs in the country.

The existing literature fails to establish a concrete relationship between strategic planning and growth of small businesses which indicates a gap in the literature that will help understand the steps of managing the organizational transition of small business growth.

1.4 Aim and Objectives of Study

The aim of the study is to scrutinize the Factors Affecting the Performance of Small and Medium Scale Businesses in Nigeria. In achieving this aim, the following specific objectives were laid out as follows:

  1. To ascertain the effects of strategic planning as a tool in the growth and survival of Small and Medium Scale Businesses in the Nigeria.
  2. To measure the contribution of strategy planning in the enhancement of productivity and workers performance.
  3. To identify the steps and processes that should be taken in implementing strategic planning in an organization.
  4. To identify the problems militating against the survival of Small and Medium Scale Businesses in the Nigeria and make recommendations on how to solve these problems.

1.5 Research Questions

The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

  • What roles do strategic planning have to play in the survival of small and medium scale businesses?
  • Does strategic planning play any role in the growth and survival of small and medium businesses in the Nigeria?
  • Have strategic planning lead to the achievement of corporate objectives?
  • Have strategic planning enhances the productivity of small scale businesses?
  • What are the problems militating against the survival of SMEs in the country and how can these problems be solved?
…

CHAPTER TWO

2.0 Literature Review

2.1 Introduction

This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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