SURVIVAL STRATEGIES IN SMALL BUSINESS
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SURVIVAL STRATEGIES IN SMALL BUSINESS
ABSTRACT
This study was conducted to evaluate the survival strategies in small-scale businesses. Lagos State (a case study of selected small-scale industries). Information was required on the operations and performance of small-scale businesses in Lagos State, including loan acquisition, marketing research, personnel approaches, strategic sites, training, and development.
The study’s research method was primarily descriptive, with the goal of gathering primary data on the survival strategies being designed, developed, and implemented by the selected small-scale industries (Becco Furniture Enterprises Nigeria Ltd. and Atlas Drugs Company), as well as how these strategies affect each organisation.
The sources of data used for the study was primary source (i.e. interviews, questionnaires, observation etc. Secondary source was also used which ‘includes libraries, other information centers on desk studies etc.
The findings of the study was based on capital, marketing research, training and development, personnel policies and location from the data collected,
the research concludes that small scale business industries were unable to receive loans from financial institutions, which has been a shortcoming on the part of the entrepreneurs due to illiteracy or lack of collateral needed.
Also most small scale industries do not research on the areas of marketing their product or some other promotional activities and this affects sales. Training and development also has hindrances to the effective performance of the small scale businesses, since most employers do not traintheir employees to acquire technical expertise.
The researcher recommend that since small scale industries are very vital, to our economy, it is pertinent that, for an entrepreneur to have effective efficient functioning of these small scale industries in the areas of (capita1loan acquisition, marketing research,
personnel policies, implementation, training and development and strategic location) he or she must aim primarily towards a long survival of that business by implementing on the strategies and policies mapped out based on the above statedareas.
The recommendation based on capital is that,since government has set up many institutions to help in providing needed capital, the entrepreneurs should endeavour to utilize these opportunities and acquire the needed capital/loan facilities.
In terms of training and development, the researcher proposes that proper training and development of personnel be undertaken in order to obtain the necessary skills required for optimal operations.CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Small-scale enterprises dominate Nigeria’s economy today. The significance can only be properly realised when one considers the dominant position it plays in our economic progress. Small scale industries operate in many sectors of the economy. However, their influence is most noticeable in distributive trade, transportation, and loca1 production.
Their primary functions include raising funds for investment, delivering goods and services to society as a whole, creating job opportunities, and contributing to community development.
A comprehensive examination of Lagos State’s economics reveals that the little development accomplished thus far could not have occurred without the activity of small-scale businesses in the state.
Most personally owned businesses frequently lend funds to some of its employees to start their own small-scale businesses as a reward for years of faithful service.
Given the importance of small-scale industries in Nigeria’s economic development, the Federal Government of the Federal Republic of Nigeria introduced and formed several schemes and support agencies to assist in the development and resolution of small-scale business challenges.
The National Directorate of Employment (NDE), the Entrepreneurship Development Programme (EDP), the Small Scale Industries Division of the Federal Ministry of Industries, and the Industries Development Centres (IDCS) are among these assistance agencies.
The purpose of this initiative (NDE) is to provide loans directly to young graduates so that they can start a small-scale industry of their choice. The scheme was founded in 1988, and it spurred the greatest number of small-scale enterprises across the country. Soapmaking, cosmetics,
and dressmaking are among the areas of production/operation. Small-scale industries pay lesser taxes, receive free technical support, and benefit from favourable government rules and lower overhead costs.
With the implementation of a structural adjustment strategy for economic recovery, dependency on imports was minimised or decreased, and the economy returned to a path of stable and balanced growth. With the introduction (i.e., SAP) into Nigeria by the.
According to the Federal Government, the scope of small-scale industries’ business activities demonstrates their strength in areas of the economy such as the commercial sector (i.e. whole seller and retailer), service industries, and contract construction industries.
According to Nzelibe 1988, despite all of these benefits, the proprietors of small-scale companies are in poor financial shape. Financial institutions’ severe loan requirements have nearly driven small businesses out of business.
Each year, at least three (3) of every four (4) small enterprises fail. It is extremely difficult, if not impossible, to get reliable statistics on the annual death rate of small-scale firms in Nigeria. The reason is because there is no legal duty to regulate small-scale business failure.
Only quoted firms are required to provide notification of their intention to wind up. However, numerous professional observations have been made regarding the rate of business cessation in Nigeria.
According to the Small-Scale Industry Administration Committee, 90% of such failures can be attributed to a lack of good planning, inexperience, insufficient managerial competence, insufficient financing,
poor recordkeeping, and weak marketing skills. The remainder. 10% are accounted for by negligence on the part of entrepreneurs, employees, and natural disasters.
Examples of expert observations on small-scale businesses that have been abandoned include the popular kitchentower restaurant once located at OmoleOgba Opposite Murhi House, which was established in 1998 due to a lack of adequate management. The previous restaurant buildings have been transformed into offices.
Another company was Textile Mills Ltd. That focused on the production of textiles and fabrics, as well as garment materials, to meet the needs of the general public.
Mismanagement and theft of funds, as well as a lack of managerial ability on the side of the company’s management, led to its closure in March 2002. Another example was the Anjorin Cooperative Society Oil Mill in Odogunyan.
This Cooperative Society Oil Mill was run by a group of women who launched and established a palm kernel production enterprise in 1990 with the goal of allowing villagers/indigenes to easily crack their palm kernel. However, the service did not endure long because the machine broke down in 1992 and is still being repaired today.
Thus, the overall goal of this research should be to develop an effective strategy for the survival of small-scale enterprises, particularly in Lagos State.
1.2 Statement of Problem
When it comes to investigating and implementing survival strategies in small-scale businesses in Lagos State, it is most frustrating to note that, despite the benefits of the Federal Government’s schemes and support agencies established to boost small-scale businesses, such as the National Directorate of Employment (NDE) and Entrepreneurship Development Programme (EDP),
the overall economic condition of the small-scale industry is weak. The major issue is the deteriorating economic situation produced by the current downturn. Although the majority of our economic policies are focused towards large firms,
the risk of beginning a small-scale business and the quick failure of these initiatives deter many people from starting a small-scale business or industry.
Low scale volume has resulted from underlying issues such as poor supervision and control by sales managers, insufficient coordination of multiple types of promotion, a bad reward plan, and a lack of enthusiasm, among other things.
As a result, given the importance of small-scale enterprises in our dynamic economy, it is critical to identify the problems associated with these small-scale enterprises and, if possible,
propose a solution in terms of strategy formulation to ensure that the goals and objectives for which these enterprises were established are met.
If this scenario is not addressed, it will have a wide range of negative consequences for both entrepreneurs and society. It will slow the development of goods and services that improve our society’s level of life. The entrepreneur’s goals and desires of economic advancement will not be realised.
Based on the foregoing, the researcher is interested in figuring out survival methods for small-scale firms in Lagos State, as well as formulating strategies to achieve acceptable objectives by
(a) Understanding the nature and structure of small-scale industry.
(b) Determine how some selected small-scale industries in Lagos State fare in the face of current economic distress.
(c) Understanding how to evaluate the quality of their services is critical to the sustainability of any organisation. Businesses will fail if product planning and development are not completed. The products to be created must be determined, including any specific features, colours, size, and shape that the packaging will take.
(d) To learn how to evaluate management strategies, which include creating objectives tailored to meet customer demands and wants while also achieving organisational goals and objectives.
(e) Evaluate the marketability and marketing skills of their services. The sort of product required by consumers, as well as the timing, location, method, and conditions of sale, should be defined. The media and message must be persuasive in order to convince clients that their physiological and physiological needs will be met.
(f) To assess their profit trend/viability, no firm can succeed unless it generates adequate income from the sale of its goods or services to clients. Problems develop when the cost of production exceeds the revenue. Finally, where necessary. To offer strategies and means of improving small-scale industries’ chances of survival.
1.3 RESEARCH QUESTIONS.
Based on this study (Survival Strategies in Small Scale Businesses in Lagos State), the following research questions are drawn up as guidelines:
1. Are small-scale industries eligible for loans from financial institutions, and are they privately owned or public liability companies?
2. To what extent do small-scale enterprises invest in marketing and promotion of their products, and how diverse are their services?
3. Do small-scale businesses deliver high-quality services and offer staff training and development?
4. To what extent are personnel approaches and policies applied in the organisation, and is their management well-organized?
5. Are the small-scale business premises strategically positioned, and do they have a comfortable sales level?
1.4 PURPOSE OF THE STUDY
Nigeria’s economic development relies heavily on the small-scale industries. We must recognise that two million of Nigeria’s three million businesses are small-scale industries.
This demonstrates that the vast majority of Nigerian company businesses remain small-scale, and this information makes it evident that small-scale business industries are the backbone of free capitalism in this country.
The goal of this research is to look into and discover survival techniques for improving the success of small-scale enterprises in Lagos State. Furthermore, the study should provide solutions to the difficulties of small-scale businesses and identify potential profits that flow to them by:
i. Investigate the current economic health of the businesses under consideration in order to determine the key issue threatening their survival and growth.
ii. Attempt to identify the tactics used by surviving and successful small-scale businesses, among others.
iii. Examine the environmental and technological challenges that small-scale industries face.
iv. Identify methods to personnel policies and programmes that will be used to improve the growth and survival of the firm.
v. Make recommendations for survival techniques and antidotes that can help small businesses operate successfully in the face of economic adversity and turbulent times.
1.5 Significance of the Study
Given the significance of small-scale company industries in our economy, it is critical to investigate survival strategies for small-scale businesses in Lagos State. It has been discovered that the longevity of most small-scale firms is dependent on how well the business recognises the impact of technology and the environment on the structure of the organisation.
This study is significant as it sheds light on the nature of small-scale businesses for potential investors and entrepreneurs. It will also highlight the flaws and problems in the quality of services supplied by these small-scale business firms, as well as make recommendations on how to eliminate those flaws and pitfalls.
To the researcher, the study will broaden his mind on the management of small-scale businesses, his access to credit facilities, approach to personnel politics and programmes, location, competitive weakness, marketing skills and research, operational expenses, employee development and training,
because several recommendations/suggestions will be made towards the end of this research, the study all determines or serves as a guide to survival strategies for the success of small-scale This better system for the small-scale business industry will benefit the government, entrepreneurs, and society as a whole.
1.6 Scope and Limitations of the Study
This study focuses on the survival strategies of small-scale businesses in Lagos State. The study’s scope is confined to select small-scale industries in Lagos State. These firms include the following:
i. Becco Furniture Enterprise Nigeria Limited
ii. Atlas Drug Company Limited.
Concluding an empirical research of this sort is a difficult undertaking, even for a research professional. Environmental problems might differ from one location to another based on elements such as temperament and the dependability of raw data.
Despite the aforementioned causes, personal constraints such as time, finances, and a lack of critical supplies hampered my progress.
(a) Financial constraints: The researchers have financial difficulties as a result of the high transportation costs associated with conducting research.
(b) Lack of data availability: One of the study’s limitations was the difficulty in collecting data. During the researchers’ visit to the companies, the majority of the data required was not easily available. Because the responses are mostly senior officers from the management cadre.
They were not always available, and even when they were, they spent little or no time discussing with you. In other circumstances, they succeed in concealing facts and data required for easy and quick work,
which they believe will amount to the disclosure of government secrets. Some managers’ attitudes make them unapproachable when it comes to collecting data or information. Most of them were taught that the task is intended to determine their income for tax purposes.
(c) Time Constraints: The writer has a time constraint as a result of the mix of research and academic stress. Constraint in acquiring enough data for the research project.
1.7 Definition of Terms
Local Government Area: This is a geographic
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