EFFECTS OF SMALL SCALE BUSINESS IN THE DEVELOPMENT OF NIGERIAN ECONOMY

1.0 Introduction

1.1 Background of the Study

Most of the world renowned companies and organizations started as a small scale business with skills and efforts they grew up to the conglomerated and multinational companies of today.

Small scale business occupies a unique position in the economy of any nature and they are the bedrock of any economic development. They constitute of the cornerstone of any competitive economy and by far outnumber the large scale business. Also, they provide large scale business, more fertile ground for creativity and entrepreneurship. Hence, as a result of easy entry into the market, small scale business spring up all the time keeping the competition environment lively, a phenomenon that leads to productivity gains and real economic growth, apart from the fact that they generate employment opportunities, they are closer to the grass root and so on, ginger rural development. They are less capital intensive and do not require gigantic infrastructure for their operation.

Being part of the economic system, small business entities are faced with numerous problems, particularly funding and many ways these are very different from the financial problems on large concern. However, the principles underlying financial decision are similar irrespective of the size of the business, hence, the basic goal so financial management through acquisition, anticipation and allocation of funds equally apply to small scale business.

It is widely known in business circles that small scale business find it difficult to secure funds from financial institutions due to the fact that they have difficulty in meeting the collateral requirement that would qualify them for the financial assistance from the back. This is not withstanding every business whether small or large needs funds. Funds constitutes the life blood of any business while other things follows.

Small scale business serves as an engine room for economic development and government recognize the fact that small business is the second largest employers of labour apart from government. Government is also encouraging the establishment of small scale business by forming such bodies like Small and Medium Enterprises (SME). Government has also provided monetary incentive for small scale industries. As stated earlier, small scale industries play very important roles in the economic development of any country, state or local government. For instance, in any depressed unemployment is the increase, where the available resources are under-utilized and where raw-material supply to our big industries is inadequate, establishment of small scale business is considered as an alternative means of earning a living and providing raw-materials to our big industries.

Brief History of Renny's Fast Food

Renny's Fast Food started as a restaurant in the late 90s. It is owned and managed by Mrs. Ngozi Obiaga as a hospitality industry, being a service provider, it is aimed as providing quality service to its targeted customers. It offers an indoor and outdoor catering services like; weddings, birthdays, chieftaincy coronation etc. Its cooperate headquarter branch is situated at No. 45 Ekwema Crecent Ikenegbu Owerri, Imo State.

Presently, Renny's Fast Food has a staff capacity of about 65 and has some branches within and outside the state like Port Harcourt and Bayelsa States.

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1.2 Statement of Problem

There is no doubt that small and medium scale enterprises is the principal catalyst of entrepreneurship and it constitute the real fabric of nation's economy. And to say that the present and future economic advancement of this out great country- Nigeria lies in the dynamics and growth of the Small and Medium Scale (SME) is not an overstatement.

At least, this is the unanimous opinion of an economic conference at the instance of the three bodies; Nigeria Institute of Social and Economic Research (NISER), the national Association of Industries (NASSI) and the Fredrick Albert Foundation in Lagos in 1989. In other words, SMEs constitute a vital force to economic growth and development (Onuoha 1994:1). Economic development is a nation wise problem which the small scale industries are capable of solving effectively these include:

1. Development of raw materials
2. Sourcing of raw materials
3. Providing training places for workers and students on industrial attachment.
4. Problems of capital for large establishment
5. Problems of unemployment
6. Under-utilization of scare resources
7. Lack of linkage effect among several factors in the economy
8. Lack of provision of import substitution goods.

In the light of the above mentioned problems, the fact that small scale business are vital for economic development of any country, state or local government and numerous problems which small scale business are capable of solving motivated me to research or write on this topic.

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1.3 Objectives of the Study

The purpose of this study is to evaluate the role of small scale business in the economic development with particular reference of Renny's Fast Food, with the view of achieving the following aims and objectives.

1. Determine the roles which the small scale business have played in economic development.
2. Determine the problems small scale business like Renny's Fast Food are facing.
3. To identify how to solve those problems.
4. To suggest the future prospect of small business in economic development.
5. To establish linkage between small scale business and the economic development of the state in particular and the national in Diaspora.

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1.4 Research Questions

The role of small scale business in the economic development of any country needs not to be over emphasized. Small scale businesses are therefore necessary for economic development of any country, state or local government.

Based on the above, a number of research questions as an aid to this study are developed thus:

• Has small scale business helped the nature in its unemployment problems?
• Has small service outlets like the Renny's Fast food played any role in the economic development of the state?
• Has small scale business played any role in the entrepreneurship development?
• Has the government done anything to encourage the establishment of small scale business?
• Do you think this country can do without the existence of the small scale business enterprise?

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1.5 Significance of the Study

This study is very beneficial to groups of people such as:

1. The small scale entrepreneur as it will help them to know how to solve the economic problems.
2. Student of business studies of higher institutions of learning as this will serve as reference work and guide for further research work.
3. The state government as this will enable them to know the roles in which the small business played in the development of the state.
4. The state government will through this study know the problems facing the small scale business and the suggested solutions.

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1.6 Scope of the Study

This study is directed to find out the roles in which small scale business has played in the economic development of this study. The study is only focused on the small outlet business like Renny's Fast food which is situated at Owerri Imo State.

This study is expected to cover and serve as a guide in the evaluation of the role played by the small and medium scale business as regards the economic development of a nation, state and even local government.

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1.7 Limitation of the Study

While carrying out this research, the researcher encountered lots of nagging problems which affected the progress of the work. Below are some of the problems encountered during the conducting of this research exercise:

Short period of time:

The study was greatly hampered by the short period of time mapped out by the school management for the executive and completion of the exercise. This is not withstanding the ambition of combing the researcher's academic works like lectures together with this work and must to establish equilibrium.

Nonchalant attitude of the respondents:

Another limitation in the course of carrying out this study was the laziness and nonchalant attitude of the respondents towards the completion of their designed questionnaire.

Inadequate materials and tools:

Lack of literatures, journals and magazines in the polytechnic and other consulted libraries was a constraint to this study though it does not limit the findings of the study because the researcher later find his head above the sea level of the wave.

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1.8 Definition of Terms

Small scale business:

This is a type of business that is owned by one or few persons with direct owner influence in the decision making and having a relatively small share of the market and low capital requirement.

Entrepreneur:

This is an individual who notices opportunities and take action to mobile necessary resources to produce new improved goods in the environment for a targeted market.

Capital:

This is the amount of money required to carry out a particular venture and pay all the financial obligation of the business.

Development:

This is the process or the ability to make something to be advance or organize for the benefit of all sundry.

Intrapreneur:

According to Gilfford Pinchot 919985) intrapreneur is defined as an entrepreneur within an already established organization.

Business failure:

Baumbark (1992:31) defined business failure as a situation where available capital is insufficient to pay all obligations of the business.

Innovation:

According to Inegberebor (1989), innovation involves creative response to an investment opportunity by developing a new product, new technology or modification of the existing ones to meet the expectations of the consuming public.

Motivation:

Stephen P. Robbins (2010), defines motivation as the willingness to exert high levels of effort toward organizational goals, conditioned by the effort and ability to satisfy some individual need.

Marketing:

Kolter (1980:9) defines marketing as getting the right goods and service to the right people at the place at the right time at the price with right communication and promotion.

Management:

According to Fedrick Winslow Taylor (1947) Management is knowing exactly what you want men to do and then their seeing that they do it in the best and cheapest way.

Directing:

According to Joseph Massie (1994) Directing concerns the total manner in which a manager influences the action of his subordinates. It is the final action of manager in getting others to act after all preparations have been completed.

Controlling:

Haiman (1985) defined controlling as the process of checking to determine whether or not, proper progress is being made towards the objective and goals and acting if necessary to correct any deviation.

Leadership:

According to Mcshare (2009), leadership is the process of motivating, influencing and directly others in the organization to work productively in pursuit of organization goals.

Environment:

Kazmi (2002) described the environment as the aggregate of all conditions, events and influences that surrounds and affect it.