THE IMPACT OF ENVIRONMENTAL VARIABLES ON SMALL SCALE BUSINESS ENTERPRISE
CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY: Over decades, small scale business has been making gain strides in Nigeria. It has been battling to make life more tolerable and comfortable by trying to make the gradual dwindling of the standard of living amids the gloom and doom economy. The importance of small scale business in Nigeria cannot be over-emphasized. Employment and entrepreneurial development can be cited as positive and genuine reasons for promoting small scale business. The employment capacity of small scale is more significantly seen in the opportunities they provides for unskilled or the urban and rural workers as observed by Cragg & King(2018).
Francis (2019) remarked that (Nigeria needs a comprehensive support policy for small scale business.) Business time said “ the unskilled policy worker is handicapped in competing favourably in the open job market due to his low skill, consequently, the relies on small scale business to satisfy his employment needs”.
By providing employment or remunerative economic activities apart from supplementing incomes earned from regular jobs, small scale business contributes immensely in bridging the gap between the different social economic lapses in Nasarawa state in particular and Nigeria at large. The small scale business also contributes in developing entrepreneurial talents, small scale business serve as a reliable avenue for innovative ideas both imported and indigenous. It prevents monopoly by forcing big firms to be more competitive in terms of product improvement, new method and processes. Small scale business serves as patronize of local raw materials.
Over decades, small scale business has been making gain strides in Nigeria. It has been battling to make life more tolerable and comfortable by trying to make the gradual dwindling of the standard of living amids the gloom and doom economy. The importance of small scale business in Nigeria cannot be over-emphasized. Employment and entrepreneurial development can be cited as positive and genuine reasons for promoting small scale business. The employment capacity of small scale is more significantly seen in the opportunities they provides for unskilled or the urban and rural workers. Gerry, Dan & Jerry (2018) established that by providing employment or remunerative economic activities apart from supplementing incomes earned from regular jobs, small scale business contributes immensely in bridging the gap between the different social economic lapses in Nasarawa state in particular and Nigeria at large. The small scale business also contributes in developing entrepreneurial talents, small scale business serve as a reliable avenue for innovative ideas both imported and indigenous. It prevents monopoly by forcing big firms to be more competitive in terms of product improvement, new method and processes. Small scale business serves as patronize of local raw materials.
STATEMENT OF THE PROBLEM
SSBs are the engine of growth and development of most developed and developing nations in the world, but unfortunately the state of economic growth of Nigeria appears to be very low despite the large concentration of businesses in the country. The poor contribution of SSBs to the development of the country may be due to some internal and external business environmental factors such as management inefficiency, marketing and sales problems, inadequate infrastructure, market competition, and financial inadequacy that are militating against the performance of SSBs in term of their profit, sales and employment generation. Small and medium enterprises (SMEs) in Nigeria have not performed creditably well and hence have not played the expected vital and vibrant role in the economic growth and development of Nigeria, (Basil, 2005). Year in year out, government at federal, state and local level make an effort in support of entrepreneurship development, but still the contributions of SSBs to economic development is low. It is worrisome that despite the incentives, favorable policies, regulations and preferential support by government aimed at improving SSBs, the sub-sector have performed below expectation in Nigeria (Abiodun, 2011).
Inspite of the large volume of studies on SSBs in developing countries, there is a death of literature on studies relating to business performance evaluation particularly in the North Central of Nigeria. Most of empirical studies conducted in developing countries particularly in Nigeria are mainly related to the problems of SSBs, but the question of the extent to which environmental factor(s) affect the profit, sales and employment of SSBs and assessment of their performance in Nasarawa state has not been thoroughly investigated.
OBJECTIVE OF THE STUDY
The main aim of this study is to evaluate the level of performance of SSBs and examine the factors affecting their performance in Nasarawa states. Thus, the specific objectives of this study are to:
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Assess the level of SSBs performance in Nasarawa states.
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Examine the impact of environmental factors on the profit of SSBs.
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Examine the impact of environmental factors on sales/revenue of SSBs.
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Examine the impact of environmental factors on employment of SSBs.
RESEARCH HYPOTHESES
Hypotheses One
Ho: SSBs performance is not significantly high in Nasarawa states.
Hi: SSBs performance is significantly high in Nasarawa states.
Hypotheses Two
Ho: Business environmental factors do not have significant impact on the profit of SSBs in Nasarawa states.
Hi: Business environmental factors have significant impact on the profit of SSBs in Nasarawa states.
1.5 SIGNIFICANCE OF THE STUDY
The result of this study would be of great importance to government, researchers and major stakeholders such as investors, staffs, managers, business consultants, financial analyst and consumers. It’s expected to contribute to SSBs sub-sector development process in developing countries and even developed countries that share similar environmental factors influencing business performance.
In a globalized economy, there is increase recognition that identifying the factors hindering SSBs performance in a developing country may be meaningful in terms of assistance developed countries provide to developing countries in the area of SSBs development. Thus, the result of this study is expected to help both Nongovernmental organizations (NGOs) and international agencies that assist in the area of SSBs and entrepreneurship development.
The study would draw the management and policy maker’s attention to the urgent need for specific management practice to enhance the effectiveness and sustainability of SSBs in Nasarawa state. The study can also assist local entrepreneurs in formulating strategies that will guide against poor business performance.
From the academic perspective the study insights should contribute to the future development in this area of research, particularly in a developing country like Nigeria. Therefore, the findings of this study are expected to contribute to the existing literature on SSBs performance and factors affecting their performance. Thus, the study addresses an issue currently agitating the minds of academics, corporate decision makers, foreign and local investors, and government as well. It comes at the time when the country is considering very seriously, and is implementing several policies that are aimed at development of SSBs sub-sector. Given the importance of SSBs understanding the environmental factors negatively affecting their performance in Nigeria is a vital first step in managing and avoiding poor SSBs performance.
1.6 SCOPE AND LIMITATION OF THE STUDY
This study is primarily concerned with the effects of environmental factors on small scale business enterprise. This study covers some elected small scale business in Nasarawa state. The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following.
a) availability of research material: The research material available to the researcher is insufficient, thereby limiting the study
b) time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
1.7 DEFINITION OF TERMS
ENVIRONMENTAL FACTORS: environmental factors. An identifiable element in the physical, cultural, demographic, economic, political, regulatory, or technological environment that affects the survival, operations, and growth of an organization
SMALL SCALE BUSINESS: Small businesses are independently owned organisations that require less capital and fewer workforces and less or no machinery. These businesses are ideally suited to operate on a small scale to serve a local community and to provide profits to the company owners.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows: Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study. Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study