CAUSES OF SMALL SCALE BUSINESS FAILURE IN ENUGU METROPOLIS AND THE STRATEGIES FOR THEIR SURVIVAL
(A STUDY OF SELECTED SMALL SCALE BUSINESS)
ABSTRACT
This research work examined Causes of Small Scale Business Failure in Enugu Metropolis and the Strategies for their survival with selected small scale businesses as a case study. The objectives of the study include to; examine how lack of managerial experiences causes failure of Small Scale Business in Enugu metropolis, identify how lack of financial resources causes failure of Small Scale Business Failure in Enugu Metropolis, investigate the effect of government laws and regulations on the failure of Small Scale Business Failure in Enugu Metropolis. The research method used was the survey research method. The major instrument of data collection was the questionnaire. The sources of data were the primary and secondary sources. The population of the study was 421 while the sample size was 205, which was determined by using the Taro Yamane’s fomular. The hypotheses were tested using the chi-square distribution formular. The data collected were presented in tables using frequencies and percentages and analyzed using inferential statistics. The findings include that lack of managerial expertise is a causative factor of Small Scale Business Failure in Enugu Metropolis, lack of financial resources affects the growth of small scale business and government laws and regulations cause failure of Small Scale Business Failure in Enugu Metropolis. The research concludes that there are many causes of Small Scale Business failure and it was recommended that the government of this country should take a far reaching measure aimed at encouraging mass acceptance of made in Nigeria goods, various banks in Nigeria should be encouraged to extend credit facilities to small scale businesses and government should implement the relevant policies in the Nigeria industrial policies.  
TABLE OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.1    Background of the study                        
1.2    Statement of the Problem                        
1.3    Objectives of the Study                        
1.4    Research Questions                            
1.5    Research Hypotheses                                            
1.6    Significance of the Study                        
1.7    Scope of the Study                            
1.8    Limitations of the Study                        
1.9    Operational Definition of Terms                 
References                                
CHAPTER TWO  
REVIEW OF RELATED LITERATURE
2.1    Conceptual Framework of the Study                
2.1.1    Definition and Meaning of small scale business        
2.1.2 Features of Small–Scale Business                
2.1.3. Definition and Meaning of Strategy                
2.1.4    Strategies for Promoting Small Scale Industries        
2.2    Review According to objectives of the study        
2.2.1 Lack of Managerial Experience as a Cause of
Failure of Small-Scale Business.                
2.2.2    Lack of Financial Resources as a Cause of Failure
Of Small-Scale Business                        
2.2.3    The Effect of Government Laws and Regulation on
Small-Scale Business                        
2.3    Theoretical Framework Of The Study                
2.3.1    Growth In Small Firms Theory By Storey, D.J            
2.4    Empirical Review                             
2.5    Summary of Literature Review                     
References                                    
CHAPTER THREE
RESEARCH METHODOLOGY
3.1    Research Design                            
3.2    Area of the study                            
3.3    Sources of data                                
3.3.1 Primary Data                                
3.3.2 Secondary Source                            
3.4    Population of the Study                        
3.5     Sample Size Determination                    
3.6    Methods of Data Collection                    
3.7    Validity of the instrument                        
3.8  Reliability of the instrument                    
3.9     Method of data presentation and analysis        
References                                 
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND DISCUSSION OF FINDINGS
4.1    Data Presentation and Analysis                     
4.2    Testing of hypotheses                         
4.3    Discussion of Findings                         
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1    Summary of Findings                         
5.2    Conclusion                                
5.3    Recommendations                            
5.4    Suggestions for Further Research                   
Bibliography                                     
Questionnaire                                    
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND OF THE STUDY
Since Nigeria attained independence in 1960, considerable efforts have been directed towards industrial development (Onuoha, 2009:42). The initial efforts were government-led through the vehicle of large industry, but lately, emphasis has shifted to small scale businesses, following the lessons learnt from the success of small scale businesses in the economic growth of Asian countries (Ojo, 2003:76). Thus, the recent industrial development drive in Nigeria has focused on sustainable development through small business development. Prior to this time, particularly judging from the objectives of the past National Development Plans; 1962-1968, 1970-1975, 1976-1980 and 1981-1985, emphasis had been on  government - led industrialization, hinged on import-substitution strategy.
Since 1986 government had reduced its role as the major driving force of the economy through the process of economic liberalization entrenched in the International Monetary Fund (IMF) pill of structural Adjustment programme. Emphasis, therefore, has shifted from large-scale industries to small scale businesses.
The small business sector is recognized as an integral component of economic development and a crucial element in the effort to lift countries out of poverty (Wolfensen, 2001:78). Small scale business are driving force for economic growth, job creation and poverty reduction in developing countries. They have been the means through which accelerated economic growth and rapid industrialization have been achieved (Harris 2006:84). Furthermore, small-scale business has been recognized as a feeder to large-scale industries (Fabayo,2009:107).
While the contributions of small-scale businesses are generally acknowledged, entrepreneurs in this sector face many obstacles that limit their long term survival and development. Scholars have indicated that starting a business is a risky venture and warn that the chances of small-business owners making it in Nigeria is very slim (Ile, 2005:132). Some researchers into small-business development have also shown that the rate of failure of small scale businesses in developing countries is higher than in the developed world (Marlow, 2009:97).
In Nigeria, despite the support and incentive programmes to small scale business, Akabueze (2002:31), succinctly stated that it would seem reasonable to expect that small businesses would grow and flourish, but the rate of business failure continues to increase because of the obstacles affecting business performance which include lack of financial resources, lack of management experience, poor location, laws and regulations, general economic conditions, as well as critical factors such as poor infrastructure, corruption, low demand for products and services and poverty. Others include shortage of raw materials, handicap in obtaining finance, inadequate competent personnel, inability to control costs and problems of dumping of cheap foreign products and others. It is against this backdrop that the researcher has decided to carrying out a research on causes of small scale business failure in Enugu Metropolis and the strategies for their survival with selected small scale businesses as a study.
1.2    STATEMENT OF THE PROBLEM
The consequences of failure of small-scale businesses include that the economic growth of the nation has been stagnant or at a very slow pace. Nigeria has become a dumping ground for foreign goods. The industrial development of Nigeria has equally been in jeopardy. Others include high rate of unemployment, income redistribution and wealth creation were also affected. Furthermore, the large-scale industries have been affected because the small scale industries usually provide the raw material needed by the large scale industries. As a matter of fact the consequences are better imagined than experienced.
1.3    OBJECTIVES OF THE STUDY
The general objective of the study is to examine the cause of small scale business failure in Enugu Metropolis and the strategies for their survival. However, the specific objectives are:-
1.    To examine how lack of managerial experience causes failure of small-scale business in Enugu metropolis.
2.    To identify how lack of financial resources cause failure of small-scale businesses in Enugu metropolis.
3.     To investigate the effect of government laws and regulations on the failure of small-scale businesses in Enugu metropolis.
1.4    RESEARCH QUESTIONS
Based on the above objectives of the study, the following research questions were raised.
1.    How does lack of managerial experience cause failure of small-scale businesses in Enugu metropolis?    
2.    How does lack of financial resources cause failure of small-scale businesses in Enugu metropolis?
3.    What are the effects of government laws and regulations on the failure of small-scale businesses in Enugu metropolis?
4.    What are the strategies for the survival  of small-scale businesses in Enugu metropolis?
1.5    RESEARCH HYPOTHESES
Based on the above research questions, the following hypotheses were formulated.
Hypothesis one
H1: Lack of managerial experience causes failure of small-scale
     businesses in Enugu metropolis.
Hypothesis Two
H1: Lack of financial resources cause failure of small-scale businesses in Enugu metropolis.
Hypothesis Three
H1: Government Laws and regulations have effects on the failure of small-scale businesses in Enugu metropolis.
Hypothesis Four
H1: There are strategies for the survival  of small-scale business in Enugu metropolis.
1.6    SIGNIFICANCE OF THE STUDY
The research work is very important because it analyses the causes of failure of small-scale business. Small-scale business entrepreneurs will benefit from this study, because they will be enlightened on the causes of failure of small-scale business. The researcher will benefit because the research work is a pre-requisite for her graduation. The university will benefit as the research work increases its data bank. The research work also serves as a reference material for further research.
1.7    SCOPE OF THE STUDY
The research work covered how lack of managerial experience causes failure of small-scale business in Enugu metropolis, how lack of financial resources cause failure of small-scale businesses in Enugu metropolis, the effect of government laws and regulations on the failure of small-scale businesses in Enugu metropolis and the strategies for the survival  of small-scale businesses in Enugu metropolis.
1.8    LIMITATIONS OF THE STUDY
The researcher encountered some impediments or constraints in the course of carrying out this research work. Among them are finance, time and the uncooperative attitude of the respondents.
Finance: The researcher spent so much money surfing or browsing through the internet and printing out relevant materials, related to the research work. The researcher, also, spent some money covering Enugu Metropolis.
Time: The work was carried out during lecture hours, causing the researcher to miss some lectures. This almost created a friction between the researcher and her  lecturers.
Uncooperative attitude of the respondents: The small-scale business owners contacted by the researcher, were economical with information. They thought that the researcher was a government official sent to monitor their activities. But inspite of all these hindrances, the researcher still came up with a reliable research work.
1.9    OPERATIONAL DEFINITION OF TERMS
Small-Scale Business: The meaning of the term, small-scale business, varies from one country to another. Small-scale business can be defined as any business whose investment capital or total costs of total assets range from one naira (N1.00) and employing not more than one hundred (100) employees.
Strategy: a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.
Survival: The ability of something or somebody to survive.