1.1 Background of the study
It is a well-known fact that for every economy to thrive, much emphasis needs to be placed on the establishment of small businesses and the funding of the already existing ones. Aside its importance to the economy, it is a sound way of reducing unemployment in Nigeria.
Every big business starts as a small business, and it started with an entrepreneur (small business), who at first, earns little or no profit. It was the new ideas of small business that brought most big business empires that create multiple jobs for our teeming youths today in Nigeria. Untried ideas become annulations that become concepts that changed the business world. Small business is the basis for the economic back bone of many developed nations. Entrepreneurship is simply what makes a small business grow. Entrepreneurship occurs when an individual develops a new venture, a new approach to an old business or idea, or a unique way of giving the market place a product or service by using resources in a new way under conditions of risk. Small business triumphs and entrepreneurship are closely related to it. It is difficult to separate them. The unemployment situation in the country coupled with the new government instinctive towards easing social tensions among unemployed youths, through the programmed of the National Directorate of Employment (NDE), were intended to lure a lot of unemployed Nigerians, including graduates into self-determination through self-employment. Graduates and school leavers are now realizing that government and the established private companies are not ready to come to their aid directly, through paid employment due to the dividing state of the economy. Government has been playing appreciative role in promoting the survival and growth of small-scale enterprise in recognition of them flexible and adaptive nature as well as their re-generative power in promoting economic growth and development. Government also encourages people to establish their own small scale businesses so as to reduce the problem of unemployment in the country and also reduce the problem of importation of goods, more so, to encourage exportation. Government in believing that a dynamic and growing small manufacturing sub-sector can contribute significantly to the implementation of a wide range development effectives, has thus enunciated various policies to encourage their proliferation and make them veritable engines of growth and development.
1.2 Statement of the problem
It has long been established that small scale businesses or enterprises is an economic booster but setting up this small or medium scale businesses has been an issue in Nigeria since most of the small businesses that have been established has either been stalled or have closed down completely. The lack of growth of small businesses in Nigeria even when some of these businesses have been well funded has been a cause for serious concern as it has made many small business owners job seekers again.
1.3 Objectives of the study
The following would be our aims /objectives of embarking on this study
- The examine the challenges of setting up small businesses in Nigeria.
- To examine the prospects of setting up successful small businesses in Nigeria.
- To study the importance of setting up small scale businesses in Nigeria.
1.4 Research questions
- What are the challenges of setting up small businesses in Nigeria?
- What are the prospects of setting up successful small businesses in Nigeria?
- Are most small businesses established in Nigeria successful?
- What is the importance of setting up small businesses in Nigeria?
1.5 Research hypotheses
Ho: there is no significant relationship between the method of SME setup and its eventual success.
Hi: there is a significant relationship between the method of SME setup and its eventual success.
1.6. Significance of the study
The outcome of this study would greatly benefit prospective small business owners on how to make their small businesses thrive.
This study would also be of importance to economic policy makers, researchers and relevant stakeholders who are interested in an SME driven economy.
1.7 Scope/Limitations of the study
This study is on the prospects and challenges of setting up small scale businesses in Nigeria with Uyo local government serving as the case study.
Limitations of study
- 1. Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
- 2. Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
1.8 Definition of terms
SME:small scale enterprises
Prospects:A person regarded as likely to succeed or as a potential customer, client, etc. it can also be the possibility or likelihood of some future event occurring.
Business: commercial activity.