CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Small scale business or enterprise in Nigeria refers to small firms owned and operated by a special group of people who see business ownership and operation as answer to the Nigeria dream of self determination. These people take the risks put in time and effort, and if successful, reap the reward of profit which is the goals of any business.These owners and operators are increasing in number, which makes them very important to the market system of Nigeria economy.
Today, small businesses are the heart of that market economy with their buying and selling of product and services. Small business or firm in Nigeria, have been established to do just about any kind of business imaginable to manufacture and distribute goods to sell them at retail and, of course to provide all kinds of needed services. Some serves only the local community, while others function in national and international markets.However, large firms are dependent upon small firms mass production industries could not distribute their goods and services without the hundreds of small firms which do that job. It has been estimate that an average of 500 suppliers and 300 retailers supports every major manufacturing firm in the country (Clifford, M. Baumbae, 1992:7).
Consequently, in Nigeria, one might wonder that where to draw the line between a small business and medium size of business. The Central Bank for purpose of making loan to small scale enterprises defines themes those with annual turnover not exceeding N10 million. However, the definition of small business varies from nation to nation and is made in relation to the level of development achieved by each country many reference periods. Their significance in the national economy is tremendous. According to the report of the organization for Economic Co-operative and Development (ECD) in pairs covering sixteen (16) countries, small enterprises or small firms with less than 50 employees account for 90% of the total anti national work force this is noticeable in Australia, Belgium, Denmark, Japan, Norway, Sweden and Switzerland. Equally, in Ireland, 60% of Industrial and Commercial firms employ between 2-20 people.In the same manner about 70% of the work force in Nigeria is employed by small enterprises. It is in this perspective that oqunsola and Oja opined that small scale enterprises contributed to the Gross Domestic Product (GDP) and the industrial sector 2% and 2% respectively. Nwachukwu (1990), in his analytical write up sees small scale enterprise as “one which is independently owned and operated, and not dominant in it’s field” going by this definition over 85% of the enterprise in Nigeria are small scale.The small firms are found in manufacturing wholesales, retailing, service industries, building and civil engineering construction, transportation communication and finance.
There is virtually no field of human endeavour in Nigeria where one does not find small business.To this end, the research study will take and analytical pattern of the problems and growth of small scale enterprises in Uyo Metropolis. Business is the sum total of the organized efforts by which people engage goods and services needed to maintain and improve the standard of living and quality of life to which each of us may aspire.It is therefore, necessary for one to know the weakness of a business to enable him or her plan it properly to avoid the failure of this business. This is the background of this study, problems of business and how to reduce some of this problem.