ABSTRACT
The purpose of the study was to assessed operations and management on growth of small and medium enterprises in Nigeria. The Study was based on following objectives: To determine operations management and growth SMEs in Nigeria and to determine the effect of innovation on growth of SMEs in Nigeria. Descriptive survey design was adopted to obtain a complete and an accurate description of situations, persons and events. The study was conducted on operations management issues in growth of small and medium enterprises in textile unit in Enugu metropolis, with target population being 300 respondents and sample size of 30 respondents. The data collection instruments were questionnaires. The study concluded that; Difficulties in accessing loans for business growth was reason for slow and retardation of business growth and that startup loan could have positive impact on the growth of the business. Study concludes that sales revenues had very largest achievement as result of loans accessibility due to availability of enough stocks, profitability had minimal achievement, and this could also mean the cost of accessing loan could be higher meaningless profit. SMEs operators has no training, education and or vocational training are better placed to adapt the constantly changing business environment. Technology and efficiency impact more positively on the growth of SMEs. The quality of management is important for small and medium-sized enterprises (SMEs), which must be able to adapt quickly to evolving markets and changing circumstances, but which often have limited resources. Agency banking has resulted in financial incursion in the region of the study, eliminating financing challenge that has been found to limit growth of small and medium enterprises. Study recommends that Given that accessing loans for business growth was reason for slow and retardation of business growth and that startup loan could have positive impact on the growth of the business. The study recommends that financial institution should make available financial resources to SMEs to enhance business growth. Government, relevant ministries in trade and industrialization should come up with policies on SMEs training on areas of financial management since the study found out that, SMEs operators has no training on the financial management. And given that training impact positively on growth of entrepreneurs with large stocks of capital that includes education and or vocational training are better placed to adopt the constantly changing business environment. Given that agency banking has resulted in financial incursion in the region of the study, eliminating financing challenge that has been found to limit growth of small and medium enterprises, the study recommends that the model can be replicated by government in financing SMEs in rural areas of Nigeria.
CHAPTER ONE
INTRODUCTION
1.1 Background To The Study
Small scale businesses are those businesses which are independently owned and operated requiring limited capital with few employee and non-sophisticated technology and which is not dominant in its field of operation. Small businesses constitute those sole proprietorships, privately owned corporations, partnershhips with fewer employees and less annual revenue than a regular-sized business or corporation. Types of small business include those engaged in trade and commercial activities, services, and small scale manufacturing .Examples include service or retail operations such as delicatessens, hairdressers or convenience stores, small grocery stores, bakeries tradepeople (eg. carpenters, electricians), very small-scale manufacturing and Internet-related businesses. Small business can be started with very minimal capital and without any formality .many small business are operated as family business and can be combined with regular employment. The research therefore seek to investigate the Management and operation on small scale business (A case study of Textile unit)
1.2 Research Problem
Companies currently need to function in the changing surroundings where there is scarcity of fundamental resources and great uncertainty exists in business undertakings. Great efficiency standards are imposed by the market and companies which fail to meet them and are marginalized quickly. In such cases, a interior resource careful optimization is essential each company which wishes to remain competitive. To achieve this goal, skills and knowledge management improvement processes plays a main role, especially for (SMEs). This particularly effects internal knowledge and real biosphere to a large extent; such a method is very significant since it enables for the rapid solution and analysis of operative difficulties and also knowledge gap awareness that requires to be occupied (Grimaldi et al., 2012).
The expansion of Small Medium Enterprises (SMEs) is important for Nigeria to attain Vision 2030, an initiative to be internationally prosperous and competitive country with high life quality by the year 2030. Statistics by G.O.K economic survey (2006) show that the SME segment contributed to 64 percent of the county‟s urban employment and 50 percent of the new jobs created in 2005 were from the SME segment. Therefore SMEs are critical for touching the country forward. This is particularly emphasized by the SMEs in Nigeria Market who as indicated by Nigeria National Bureau of Statistics economic study (2012) provide employment to 50,000 individuals and contribute to 18% of Nigeria‟s GDP from micro small enterprises.
Over the years, the Taiwan‟s SME segment has been characterized by arguments like dynamic, diverse, innovative, as well as creative. Their influences to the Taiwanese economy are far and wide, bearing in mind SMEs make up 97.83% of all enterprises, with 1.4 million in process at the end of 2003 (Small plus Medium Enterprise Administration, 2004a). This number is expected to remain growing. According to Taiwan‟s Small and Medium Enterprise Administration (SMEA), SMEs have backed to the diversity of Taiwan‟s private sector, employment levels, as well as gross production.
In Zimbabwe, even though SMEs are currently under local financial developments are maintained to solve socio economic difficulties. Although entrepreneurs -SMEs may act as entire economy‟s‟ activity catalysts (Chichoni, 2011), most fail. Above 75% of new businesses fail in Zimbabwe (Chichoni, 2011)), though it hard to assess the true nature of failure in SME because of lack correct data on this aspect.
Furthermore, financial institutions tend not to lend SMEs because of inadequate collateral which is a barrier to growth ability of small enterprises to raise capital, market uncertainty, higher transaction costs and information asymmetries due to serving customers who are far thus restricting flow to finance to SMEs (URT- National Economic Empowerment Policy, 2009).
In Nigeria, employment within the accounts sector for 87 percent of all the created new jobs and employs 77 percent of all employees in the country (GOK, 2005). Despite its relevance, in five SMEs businesses three fail within its first five years in operation. Of those that are left, four out of five fail within the next four years. They are either closed down, liquidated, merged, acquired, change direction or become a new business. Of the remaining businesses, only 15% will be making a profit, the remaining will barely be surviving (SMIDEC, 2009).
The SME‟s in Nigeria experience some impeding factors that prohibit SMEs not accessing financial services from financial institutions like lack of collateral, lack of entrepreneur skills, poor documentations, and high interest rates. These impeding factors are assumed to be major practical problems particularly in Nigeria. The SME‟s require financing and management skills for their day to day activities. The commercial banks provide initial as well as working capital, financial skills training, role models and mobilize savings to the SME sector. These services offered by commercial banks are expected to aid in the growth of SMEs eventually ensuring success of these businesses. What is the effect of operation management on growth of SMEs in Nigeria?
1.3 Objectives of the Study
To determine the nature of small scale business
To determine the Management and operation of small scale business (A case study of Textile unit
Small business can be started with very minimal capital and without any formality .many small business are operated as family business and can be combined with regular employment.
1.3 Research Questions
What is small scale business
What is the level of impact of the management and operation of small scale business?
1.4 Significance of the Study
The study shall appraise the nature , management and operation of small scale business which shall serve as a vital source of information to investors
1.5 Research Hypothesis
Ho The level of impact of the Management and operation of Textile unit small business is low
HI The level of impact of the Management and operation of Textile unit small business is high
1.6 Scope of the Study
The study focuses on the appraisal of Management and operation of small scale business with a case study Textile unit
1.7 Limitations of the Study
The study was confronted by some constraints including logistics and geographical factors.
1.8 Definition of Terms
SMALL BUSINESS DEFINED
Small scale businesses are those businesses which are independently owned and operated requiring limited capital with few employee and non sophisticated technology and which is not dominant in its field of operation. Small businesses constitute those sole proprietorships, privately owned corporations, partnerships with fewer employees and less annual revenue than a regular-sized business or corporation.
FRANCHISE BUSINESS
Franchising is a way for small business owners to benefit from the economies of scale of the big corporation (franchiser). McDonald’s and subway are examples of a franchise. The small business owner can leverage a strong brand name and purchasing power of the larger company while keeping their own investment affordable
Retailers’ cooperative
A retailer’s cooperative is a type of cooperative which employs economies of scales on behalf of its retailer members. Retailers’ cooperatives use their purchasing power to acquire discounts from manufacturers and often share marketing expenses. It is common for locally owned grocery stores, hardware stores, and pharmacies to participate in retailers’ cooperatives. Ace Hardware, True Value and NAPA are examples of a retailers’ cooperative.
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