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SOURCE OF RAW MATERIAL FOR SMALL-SCALE BUSINESS IN NIGERIA

ABSTRACT

There has been a lot of difficulties in determining the definition of small scale business. To determine what a small scale business is we have to put into consideration so many employees, asset values, sales volume, financial strength number of locations, relative size and so on. Some definitions of small scale business have been put up as in the case of the industrial research unit if Obafemi Awolowo university Ife, which states that is one whose capital assets equipment plant and working capital are less than N250.000.00 and employing power of not less than 50 full time workers This study work toward how these small scale business can source raw materials for their production and how some of their problem can be solved.  Small scale business are being posed by a lot of problem like finance, social amenties, not belonging to union of small scale business lack of planning . This work studies how this problems will be solved and suggest how people involved in small scale business can solve this problem and more away of sourcing raw materials.

CHAPTER ONE

INTRODUCTION

1.1  BACKGROUNDTO THE STYDY 

Industry has become the most dynamic sector in most developing countries like Nigeria. It would be an over statement to say that small scale industries or business constitute the bulk of business establishment in most of these developing countries.  It is very difficult to make a specific statement regarding the small scale business but walking along the streets of major towns in any state of this country would show that small scale business constitute at least 60% of the Nigeria industrial activities.  This follows that the small scale business constitute a substantial portion of the gross domestic product (G&P) as well as generate the foreign exchange earnings of Nigeria.

Nigeria in the past times has placed much emphasis on capital intensive industries and tend to neglect the small scale business which are more essential to the country taking into consideration the countries human and natural resources as well as capital availability. Large-scale business have been so much over estimated compared to the small scale business, because of the size. This indicates that so much attention is being give to the large-scale business by the government than the attention given to the small scale business which are indispensable to the functioning of our economy. It is scale business les on their potentials for creating employment opportunities.  The encouragement of small scale business will help to eliminate the imbalance in the rate of economic growth difference between the rural and urban areas and this enhance integrated rural development.

The  problem with most entrepreneurs especially in Nigeria and in general is their inability to recognize the need to give priority attention to the issue of planning and control which are the essential ingredients in the management of very business.  Venture be it large or small scale business. In small scale manufacturing industries there are also the problem of sourcing raw material, which are essential for the manufactures of the products. It is for this reason that we intend to look at the subject matter under consideration with a view to identifying problems and thereby suggest meaningful solutions to those problems.

1.2   STATEMENT OF THE PROBLEM

Any business whether small or large operating in any socio- economic setting is bound to have problems.  Small scale business however, have problem peculiar to its size. Studies have identified some of these problems as follows, incompetent management, competition, country, state of economy, lack of encouragement from the government finance high level of exchange rate, ban on importation of raw material etc. Any of these problem could lead directly to the failure of small scale businesses which has been put as comprising the bulk of new business every year.

1.3   OBJECTIVE OF THE STUDY

This study has objectives as follows.

i)    To identify how raw material are been sourced

ii)  To identify the general problems of small scale business and how the problem be solved.

iii)  To identify the effect of government legislation on important and the effects of exchange rate has on the small scale business.

iv) To identify the problems of planning and control as it effects the management of small scale business and then to proffer solutions that can help to bring about the availability of raw materials.

1.4    RESEARCH QUESTION

1)  Does small scale enterprise have due attention over the year in terms of finance government policies and ban on importation of raw materials from overseas countries?

2)  What factors hinder the growth of small scale enterprises?

3) Does finance constitute to the greatest problems of small scale enterprises?

4)   How does your organization source for raw materials?

1.5    RESEARCH HYPOTHESIS

In  order to sourcing raw material for small scale business the following three hypothesis has been devised.

1)  H0: The small scale enterprises has not been given due attention over

The years in terms of finance

H1: The small scale enterprises has been given due attention over the Year

2)  H0: Finance, marketing, manpower etc enterprises

3)  H0: Finance does not been constitute the grates problems of small Scale enterprises

H1:  Finance of small-scale enterprises

1.6   SIGNIFIANCE OF THE STUDY

The significant of this study is to take a critical view of the issues of sourcing raw materials, which is primary need of the small scale business. It is believed that this study will go a long way to out lining and lighting the problems encountered by managers and prospective entrepreneurs in order to minimize rate of business failure in Nigeria. Furthermore, it is hoped that any manager who digs into the finding of this study will not doubt be an effective manager.   

1.7   SCOPE OF STUDY

The scope of this study is to identify how raw material are being sourced, the problem facing the sourcing of materials for small scale business.  To find out the general problem of small scale business and how the problems should be solved. The problem of planning and control as it effects the management of small it effects the management of small scale business and then to proffer solutions hat can help to bring about the availability of he raw materials. This study will no doubt come up with finding regarding the problems of sourcing raw materials facing the entrepreneurs and prospective.

1.8   LIMITATION OF THE STUDY

Conducting an empirical research is not an easy task, even for a compete research.  This research the sourcing raw material for small scale business was not an exception to the usual constraints and others problems associated with similar researchers in our society. Environmental to problem vary from one place to another depending on such factors as the temperament of the respondents, the nature of the research, level of education of the respondent. Despite the above fat is external to the researcher personal. Such as limited time, limited resources, finance, inadequate data and secrecy of certain records were encountered.

1.9   DEFINITION OF TERMS

i)   CAPITAL INTENSIVE:

Using more of capital than any other factors of production

ii)  “PHYSICAL BARRIES IMPOSSIBLE TO COROSS”

This is taken to means business constraints

REFERENCE

A.K.SAHA: Problems and prospects of small furniture business in

Nigeria business journal No.18 1983

BERNARD HOLLOWOOD: The small business and economic climate

National west minister- BAMIC review February 1970

CHIOME.E.O: Causes of business failure in Nigeria “business time”

September 1989,PG 12-13

OJEMBA G. AGBO: Small-scale business management.  

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