PROBLEMS MILITATING SMALL SCALE BUSINESS IN NIGERIA (A CASE STUDY OF BEJOY PURE WATER)
ABSTRACT
The small – scale industrial sector is beset by a multiplicity of problems.
Eminent scholars on management have continued to search for the sources of these problems and to suggest solution. Most of these problems are inherent in the small size of the enterprise rather than the enterprise itself. However, the validity of this view is still under question. Observers stated that the first factor that determines the length of life of any organization is whether the persons with power in it want it to be long lived. In other words, these authors relate the problems to the people with power in the organization the owners / managers. However, it is not my aim to determine which view id correct or wrong since both believe that organizations large or small have problems.
In the light of the above, this paper has been divided into five chapters for the purpose of proper analysis; Chapter One focuses on the background of study, statement of problem, objective of study, research question, scope of study, significance of study and definition of terms.
Chapter Two deals with literature review, Brief historical background of case study and its management, small scale businesses and prototype of some small scale businesses. Chapter Three looks at the design of the study, area of study, population of study, sample and sampling technique, instrument for data collection, validation of instrument, reliability of instrument, method of data collection and method of data analysis while Chapter Four is on presentation and analysis of data, Chapter Five caps it up with discussion of findings, conclusion of the study recommendation, implication of the findings, suggestion for the further studies and limitations of the study.
TABLE OF CONTENTS
CHAPTER ONE
1.1    Background of the Study
1.2    Statement of Problem
1.3    Objective of Study
1.4    Research Question
1.5    The Scope of the Study
1.6    The Significance of the Study
1.7    Definition of Terms
CHAPTER TWO
2.0    REVIEW OF LITERATURE
2.1    Introduction
2.2    Brief Historical Background and Management of the Case Study
2.3    Small Scale Operation
2.4    Advantages of Small Scale Businesses  
2.5    Disadvantage of Small scale Businesses
2.6    Prototypes of Some Small Scale Businesses
CHAPTER THREE
RESEARCH METHODOLOGY
3.1    The Design of the Study
3.2    Area of Study
3.3    Population of Study
3.4    Sample and Sampling Technique
3.5    Instrument for Data Collection
3.6    Validation of Instrument
3.7    Reliability of Instrument
3.8    Method of Data Collection
3.9    Method of Data Analysis  
CHAPTER FOUR
Data Presentation And Analysis
CHAPTER FIVE
5.0    Discussion and Conclusion of results
5.1    Discussion of Findings
5.2    Conclusion of the Study
5.3    Recommendation
5.4    Implication of the Findings
5.5    Suggest for the Further Studies
5.6    Limitation of the Study
References
Appendix A
Appendix B
Appendix C
 LIST FO TABLES
Table I    Sex Distribution of Respondents
Table II    Age Distribution of Respondents
Table III    Education Qualification of Respondents
Table IV    Current Department of Respondents
Table V    Years of Services of Respondents
Table VI    Respondents Reaction to Question 3    
Table VII    Respondents Reaction to Question 4    
Table VIII    Respondents Reaction to Question 5    
Table IX    Respondents Reaction to Question 6    
Table X    Respondents Reaction to Question 7    
Table XI    Respondents Reaction to Question 8    
Table XII    Respondents Reaction to Question 9    
Table XIII    Respondents Reaction to Question 10    
  CHAPTER ONE
INTRODUCTION
1.1    Background of the Study
There has been a big controversy over the precise meaning of “Small – Scale Business” among scholars, government, students and economic analysis for a long time now. Up till now, no compromise seems to be around the corner. Different people and institutions therefore had employed different criteria such as total assets size, relative size of a firm in an industry, number of employees, sales volume, ownership structure, or a combination of the above feature to define it. Thus Staley (1958:I) noted that this confusion in the term has impeded clear thinking about the role of small-scale business in industrial development. Perhaps, this confusion is a result of some of these definitions and the stage of economic development of the particular environment within which the definition was made.
The classical economists according to Adene W.O (1988:II) define the term as any organization of production whose main objective is to produce goods and services in order to meet and satisfy human wants in not large or medium scale, on a continues basis for the primary aim of earning profit as reward for the risk of undertaking the venture. Unfortunately, this definition did not give an objective parameter for determining what is large or medium as could have been achieved with quantitative parameters.
Right from the topic sentence, the small –scale industrial sector is beset by a multiplicity of problems. Eminent scholars on management have continued to search for the sources of these problems and to suggest solutions. Baumback, Lawyer and Kelly (1973:23) stated that most of these problems are inherent in the small size of the enterprises rather than the enterprise itself.
However, the validity of this view is still under question for Hicks and Gullett (1987:95) observed that the first factor that determines the length of life of any organization is whether the person with power in it wants it to be long lived. In other words, these authors relate the problems to the people with power in the organization. The owners/ mangers. However, it is not my aim to determine which view as correct or wrong since both believe that organizations large or small have problems.
 1.2    STATEMENT OF PROBLEM
The problem of this research are articulated in the following research statements:  
i.    Small business owners tend to enter the business more by chance than by design
ii.    They tend to have limited formed education especially in non-technical business.
iii.    The firm has little or no accounting records
iv.    They are many in each industry but each of them is small in size and has a small share of the market.
1.3    OBJECTIVE OF THE STUDY
In relations to the statement of problems above, the objectives of this study is to find out the following:
i.    To examine the motivating factors of small business owners in entering the business.
ii.    To determine their level of education and experience in the filed.
iii.    To access and evaluate the accounting records they keep.
iv.    To evaluate the size of the firm to ascertain their share of the market.  
1.4    RESEARCH QUESTION
In this study of the problems militating against the success of small scale business in Nigeria, the following questions have been formulated to text out research.
i.    How effectively and efficiently would small business owners perform if they enter the business by chance rather than by design?
ii.    To what extent will their output be inefficient because they have limited formal education and lack technical knowledge in the field?
iii.    How would they access their input and output as well as their profit and loss account when they have little or no accounting records?
iv.    To what extent will they be disadvantaged form both internal and external economies of scale when they are relatively small in size and their share of the make small.
1.5    THE SCOPE OF THE STUDY
Basically, the work which involves the problem of small scale industries will cover small scale operations, merits and demerits of small scale industries, prototype of small scale business, sources of funds and the role they play in economic development and as well vividly concentrated on Bejoy pure waters situated at Emene industrial Area in Enugu.
1.6    SIGNIFICANCE OF STUDY
This research study is significant an timely because apart covering a research gap, it relates to a particular problem, “the problems militating the success of small scale business in Nigeria”.
However, it is important to note that the success or failure of the nation depends greatly on the stability, effective and efficient use of the small-scale businesses by the government to foster development in the country.
Small – scale enterprises have important roles to play in the economic development of any nation. All these roles are geared towards the achievement of government’s developmental objectives. In this process of development, this sector has shown remarkable influence through household, artisan, and small factory industries.

1.7    DEFINITION OF TERMS
There is no definition of small-scale industry that is accepted universally. The definitions vary from one country to another. Even in a country, the definitions may differ from state to state and from institution to institution. Definitions are usually based on the level of economic development of the particular economy and the purpose of the definition.
However, there are standards adopted by people who define small-scale industry. In the opinion of Broom Longenecker, 1983, the definitions are not rigidly fixed since people adopt different standards for different purpose with some of the standards being number of employees, asset size, volume of sales etc.  According to Klott Lawrence, 1973, small – scale industry is any industry which I independently owned and operated and not dominant in its area of operation. Drucker P.F. 1974, maintains that there is only one criterion, which with a fair degree of reliability, indicate whether a business is small, fair sized or big. He says that “a small business requires at most one man who is not engaged in any other functional work required. He summed it up by asserting that regardless of titles and position, it can hardly exceed twelve to fifteen men which is about the number one can really know and can really be familiar with. In Nigeria, definitions of small firms do not differ much form those of other economies. Monetary policy circular No 29 of Central Bank of Nigeria maintains that small-scale enterprise shall include cottage industries and defined them as “enterprise whose total cost, excluding cost of land but including working capital does not exceed N10 million”.

In the industrial policy of Nigeria published of federal ministry of Industries, small –scale industry is defined in the light of SAP Economic realities as those whose total investment is of between N100,000 and N2 million exclusive of land, but including working capital. Minor cottage industries are defined by the policy as those whose total investment cost does not exceed N100,000 including working capital but exclusive of land.
In Enugu State, the state government established fund for small – scale industries (FUSSI) in 1971 through the state ministry of commerce, industry and technology. This fund says, “Small scale industry is a manufacturing, processing or servicing industry with a capital investment of up to N150,000 in machinery and equipment alone”. This excludes working capital and cost of land. It can be discussed above that there are only two major ways of defining a small scale industry; a qualitative and quantitative approach. A quantitative approach talks about the number of size of people employed in the business and the sale volume.

Quantitatively, there are about four characteristics:
a.    Owner supplier manager
b.    Capital supplied by one person
c.    It operates in a local area
d.    The size is small in consideration with other industries.
Therefore, in distinguishing between big business and small business, some of the criteria used are; relative size, type of customers, financial strength, and number of employees.