CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Research and other investigation have shown that some of the business enterprises in Nigeria today started as small businesses. These business organizations perform or carryout various functions which include and not limited to manufacturing of goods, distributing of goods and services and retailing of goods to the final consumers. There are numerous business organizations in Nigeria. All these enterprises are established mainly for profit maximization. Most of these organizations are relatively small in size and may be seen as operating on a small scale. However, small businesses have not received a widely acceptable definition but are viewed dierently by various scholars among which are; Stanley et al (2005), argued that business employing below 100 workers can be defined as small scale industries. Also, the Nigerian Federal Ministry, of industries in 1972, defined a small scale industry as one with total investments not exceeding N60, 000 and employing
not more than 50 persons, Again, according to the government small-scale industry development programme small scale industry in Nigeria is any manufacturing, processing and servicing industry with a capital investment not exceeding N150, 000 in manufacturing and equipment alone”. Baridam, M. (1995), opined that using a qualitative criteria for the definition of small scale business, a business enterprises is small if it possesses two or more of the following characteristics.
1. Independent management (usually the manager is also an owner)
2. Owner – supplied capital
3. Mainly local operations
4. Relatively small – size within the industry.
On the other hand, the American small scale business Act of 1953 has also advanced a far reaching definition as they defined small business as “one which is independently owned and operated, is organized for profit, and is not dominated in its field of operation”.
In Nigeria, small businesses operates in various segments of the economy, the case with which it can be started coupled with the inputs provided by the Nigerian enterprises promotion decree of 1977, provided tremendous encouragement and conducive business environment for small scale business in Nigeria such that Fubara (2003) argued that “in every major industry in Nigeria, there are small firms which constitute over 75% of the firms in that industry”. Most of these businesses so mentioned engage in bakery, carpentry, printing, block moulding, poultry retain trade and transport services etc. The attention and focus that is given to small scale business both within the academic and government circle is justified not only because small enterprises provide the logical starting point for big business, but because they also serve as a spring – board and training ground for big business in form of entrepreneurship.
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