The Impact of Business Failure in Nigeria

1.0 Introduction
1.1 Background Of The Study
Business is important to our society because we depend on its for various services. While they depend on the environment. Business organization provide our basic needs such as food, clothing and shelter. They also provide us with moisture recreation, entertainment, education, etc. many of us work in business organization and therefore depend on them for our economic and social welfare.
One can see that our society cannot do without business organization. Over the years studies in management have often concentrated on large organization which are characterized by impersonal relation, formal structures and personal specialization.
The industrial revolution of the 19th century brought about radical change in the production process with a focus on achieving economic of scale and resources efficiency and effectiveness through large scale production. The large scale capital investment involved in large business make this category of business even risks hence, the need to place close supervision and control on their management as a way to protect the stakeholder interest.
However, studies of modern economics have show what it is difficult to achieved balance and sustainable economic growth by depending only on large business organization. Small and large business are known to contribute significantly in building a solid and rural economic base in both developed had been and less developed country.
It has been noted that 75% of business even through there are medium and large scale business which have failed either in the short or long run.
In this case, one would want to ask what factors that lead to these business failures and what are the consequences, effect of this failure to the company; employee and the society at large. Small scale business provide the training ground for business men. Experience and skills develop in running employed in large industrial set up. It has been appreciated that the managerial skill and knowledge needed to run large company cannot be developed overnight those who had experience in small scale business management can easily apply such knowledge and skill to manage bigger enterprise.
Many small scale business are mainly for the demand of their immediate local environment, and that their proprietor are usually conservative and suspicions unwilling to release information about their business for fear of taxation and unwanted competition.
No one aim to start a business which will be a failure, but it has been observed that many businesses have failed to survive, thereby disappointing their proprietor, although they may have contributed to their failure in one way or the other. Small business provide a very strong support for our economic development presently, our economy is dominated by small scale business and even the few existing large scale businesses heavily depend on them in several ways.

1.2 Statement Of The Problem
In recognition of the fact that causes of business failure in Nigeria are high priority to the survival on any business concerned. The impact is very substantial objectives or goals and the end towards which activity is aimed. They represent not only the point of planning but also the end toward which organizing, staffing directing, leading and controlling are aimed.
The rampant folding up both small and large business organization in the recent time have stemmed from mismanagement by owners and inability to perform managerial function. Coupled with lack of managerial skills. Properly train and educated in other to find the cause of business failure in small business enterprise in federal polytechnic environment.

1.3 Objective Of The Study
The main objective of this study is to determine the impact of business failure on economic development of Nigeria. The specific objective include:

1. To determine the causes of business failure
2. To find out how business failure affect employment.
3. To find out how business failure affect payment of taxes to government.
4. To examine the relationship between business failure and managerial process and skills.

1.4 Research Questions
The research question that guided this study included:

• What is the relationship between business failure and employment.
• How does business failure affect payment of taxes to government.
• What is the relationship between business failure and managerial process and skills.

1.5 Research Hypothesis
The following hypothesis were formulated for the study:
Ho 1: Business failure does not have significant relationship with employment of citizens.
HA 1: Business failure has significant relationship with employment of citizens.
Ho 2: Business failure does not have significant relationship with payment of tax to government.
H A 2: Business failure has significant relationship with payment of tax to government.

1.6 Significant Of The Study
This study will serve for upcoming researcher in related field. It we be useful to entrepreneurs of small scale, medium and large scale business, the government and public who may want to engage in any form of business it will enable the entrepreneurs of small business to detect signs and symptoms of failure in good time. It will be a constant reference point for researcher in a similar study.
Finally the study emphasis more on business that have failed and highlight causes and impact, the effect or business failure in Nigeria.

1.7 Scope Of The Study
The research work focused on the impact of business failure on economic development of small business in Nekede.

1.8 Limitation Of The Study
Lack of textbooks and journals it is know fact that the university and polytechnic libraries and other public libraries in Nigeria lack much books journal and other publication which are much needed in project write-ups.
Finance: The cost of interest is high and as the student was unable to afford all the financial requirement of the research study.
Time: The period of time allowed for this project is small or the time required for this study is just not enough. A project of time nature need to be done gradually hence month can be over without getting the necessary fact needed for this study.

1.9 Definitions Of Terms
1). Business:
Any legal or commercial activity which a person engage itself in order to make profit.
2). Business Failure:
Inability of a particular business enterprise to continue to function as “going concerned”.
3). Insolvency (Bankrupt):
Inability of income to cover the expenses of a business.
4). Working Capital:
The actual money used in running the business.
5). Fraud:
Unlawful acquiring and diversion of wealth and income.
6). Operating Cost:
The current expenditure of that business and expenses of the business.
7). Economic Downturn:
Is when things goes wrong in a society.
8). Product Line:
The target of goods and services of business.
9). Revenue:
The total or gross earning of a business.
10). Management:
The process of planning controlling directing, co-coordinating and organizing resources (human and material) by a business organization in order to achieved their business objectives.
11). Profit:
The net income of the business, it is the excess of gross earning over expenses.
12). Economic Depreciation:
A prolong period of recession of significant and prolonged down-turn in the economy. The characteristic of an economic depression include dealing with business activities falling prices, rising unemployment increase investment etc.