TITLE OF DISSERTATION: Study of Factors Affecting Success and Failure of Small and Medium Enterprises in Nigeria. The general effect as indicated by the F statistic reveals that of all three variables measured under this study, bank credit and interest are statistically significant in deciphering the improvement in the performance of small and medium enterprises in Nigeria.
Statement of Problem
Study Objectives
Research Questions
Hypothesis of the Study
Entrepreneurs should never get stuck in past failures or even victories. However, many economic and financial commentators do not pay attention to the importance of the SME sector in the field of economic development. A 2020 report on the state of SMEs in Nigeria by Oyeyinka highlights the following threats to SMEs in the Nigerian environment.
Significance of the Study
Limitations to the Study
These range from an analysis of the concept of SMEs, the roles and attendant challenges of small and medium enterprises (SMEs) in Nigeria, and things that affect the success or failure of these enterprises. We will then discuss the success and failure of SMEs while highlighting issues relating to SMEs that have been overlooked in Nigeria and other developing countries.
Entrepreneurship and its definitions
A public company has increased opportunities for founders of the company to leave at any time in the future if they wish. The World Bank's Doing Business survey also considered which economies in the world improved the most. The effect of globalization on the performance of US small and medium-sized firms: Does owner race/ethnicity matter.
Roles and nature of Entrepreneurs
Fırm desıre for responsibility
Entrepreneurship take moderate risks
Entrepreneurship should have a strong desire and ability to succeed
The desire for immediate feedback
The number of partners in the partnership directly affects the resources available to run the business. She went on to state that "the possible range of the validity coefficient is the same as other correlation coefficients (0 to 1)" and therefore this represents strong validity.
It ıs crucial for entrepreneurs to have high levels
Futuristic view and orientation
Instead, they focus on what they can achieve with their business plans in the near and distant future. Entrepreneurs focus on spotting opportunities and exploiting them for the success of their business.
Skills for managing resources of the organization
If the average person sees challenges, the entrepreneur must see opportunities and make something of them. Organization Resource Management Skills: An entrepreneur venturing into a business should know how to carefully manage his/her finances and other resources.
Various forms of ownership in Entrepreneurship
The sole proprietorship
Results from the study showed an increase in the percentage of employment among small organizations. In tune with the innovations in the world economy and the associated global effects, the role of SMEs from this point forward is sure to be even bigger and more widespread, with a visible impact on the developing world trade order. (Aluko, 2004). The role played by small and medium-sized businesses in industrialization and economic development, especially in terms of employment and income growth, and accelerated expansion in metropolitan and provincial regions cannot be overemphasized (Olutula, 2001; Hallberg, 2000). ; Olutunla, 2001; Williams, 2006).
Advantages and disadvantages of sole proprietorship
Sole decision maker
In a sole proprietorship, the entrepreneur is in charge of affairs and is responsible for making all decisions. He does not have to consult someone else or a group of people when he wants to take certain actions.
Low start-up cost
Many business owners prefer to run a sole proprietorship over other forms of business owners because they are not accountable to anyone. The advantage of being the sole decision maker is often seen when the entrepreneur needs to make an urgent decision and time does not allow for consultation.
Profit
Easy process
The sole proprietor can decide to convert the business into a partnership or incorporate it without any consultation as there are no co-owners or signatories of his business. Even if at some point the sole owner decides to cease operations or close the business, only a few documents are required and the process is simple and easy.
Disadvantages of sole proprietorship
- No separation between personal and business assets
- Less capital
- Error ın decision making
- Taxes
Another disadvantage of a sole proprietorship is that the business owner must pay taxes alone. The entrepreneur will have to pay tax as a self-employed person because he is both the owner and operator of the business.
The partnership
Limited partnership
Under this type of partnership, the general partner is often treated as a general partnership under the law. Limited Liability Partnership: Under this form of partnership, which many states and countries recognize, all partnerships are limited partnerships.
Limited liability partnership
Master limited partnership (MPL)
Advantages of partnerships
- Ease of start-up
- Shared burden and responsibility
- Sufficient skills, knowledge and contacts
- Better decision making
- More capital
In the end, the conclusion reached would most likely be better than a single person decision. All partners will bring fixed amounts and invest them in the business for business expansion and growth.
Disadvantages of a business partnership
- Unlimited liability
- Possibility of conflict
- Future uncertainty
- Difficulty in transferring interest
- Poor public trust
This is because all partners bring their own unique perspective after which they will debate it and come to a decision. Without the agreement of all partners, it is impossible to transfer the interest of a partner to someone outside the partnership.
Close corporation
Advantages of close corporation
Shareholders in a closely held corporation have a lot of control over the sale of shares to new candidates.
Disadvantages of close corporation
In Nigeria, the Securities and Exchange Commission (SEC) requires companies to provide transparent information about their corporate finances and activities. Public companies are almost always in the public eye because they release a lot of information about their operations and finances to the public.
Advantages of public company
- Ability to raise capital through public issue of shares
- Other fınance opportunity
- Opportunity for growth and expansion
- Prestıge and confidence
- Transferability of shares
- Exit strategy
Although most companies may not live up to the perception of being more established, more established and bigger than other companies. It is comforting that shareholders are not strictly tied to the company, so they will be more open to buying shares and investing.
Disadvantages of public companies
- Strict regulatory requirements
- Higher transparency levels required
- Ownership issues
- Highly prone to take overs
- Short term result driven
- Highly Initial financial commitment
In cases where a public company is listed, they may face pressure and undue emphasis on the share price. Public companies have a higher minimum financial obligation than private companies. Before trading, a public company must have at least £50,000 of nominal share capital and at least 25% paid up.
A private company
Advantages of private company
Disadvantages of private company
Stages of Entrepreneurial Development in Nigeria and other countries
The start-up phase is when the company is established and begins to operate. Nieman et al blame poor strategic positioning for the decline in business opportunities at this stage.
Small and Medium Enterprises (SMEs)
The Federal Government of Nigeria has in recent years initiated various policies and projects to enhance the growth of small and medium scale enterprises across the country. This is the second time in a row that Togo has been ranked among the top 10 most improved economies in terms of ease of doing business in the world. Achieve massive growth in the SME sector by enabling the economy with the necessary tools, policies and funding.
Global Structure of Small and Medium Enterprises
System of controlling small organizations globally
The importance of small organizations globally
SME roles in economic development
There has definitely been more government involvement in the Nigerian economic sphere to facilitate the operations of SMEs. In 2011, the Companies and Intellectual Property Commission (CIPC) was replaced by the Companies and Intellectual Property Registration Office (CIPRO), which handled the registration of companies in the country.
Advantages and Disadvantages of Small and Medium Enterprises
The advantages of small organization
Several studies have highlighted some of the loopholes in government policies and entrepreneurship development in Nigeria. The results from the GEM annual report show that the African continent has a massively higher proportion of female entrepreneurs than other regions of the world. The findings of this study show that trade openness is not significant for the development and performance of SMEs in Nigeria.
The disadvantages of small organization
Small and Medium Enterprises in Nigeria
Challenges of Small and Medium Enterprises in Nigeria
SWOT Analysis of Small and Medium Enterprises in Nigeria
- Strength of SMEs in Nigeria
- Weaknesses of SMEs in Nigeria
- Opportunities of SMEs in Nigeria
- Threat of SMEs in Nigeria
Incompetence and absence of key skills is another weakness of entrepreneurs and SMEs in Nigeria. Some other opportunities mentioned by Oyeyinka (2020) include the strong potential for employment and exports, the distribution of SMEs in Nigeria within regions; which allows for synergy effects in operation and costs.
SMEs and Government Policies in Nigeria and other countries
Effects of Government Policies on Small and Medium Enterprises
Current Government Initiatives
For example, the Central Bank of Nigeria has started giving more loans to SMEs and entrepreneurs, especially those in agriculture. The Corporate Affairs Commission (CAC) National Agency for Food and Drug Administration and Control and other agencies also have policies and practices aimed at making business more profitable in the Nigerian environment.
Comparing Government Policies and SMEs in Nigeria and South Africa
Findings from the GEM Annual Report also show that Africa is leading the world in women's establishment of SMEs. The R-squared from the analysis shows that the various explanatory variables explain 51% of the changes in the dependent variable.
Growing Entrepreneurs and SMEs in Nigeria and other countries
More African females are leading the SMEs across the world
Gulf region economies also saw the birth of 35 reforms that caused four economies in the region to achieve the least of the 10 most improved global economies. In the table above, regarding the gender respondents, it was observed that 52.63% of the respondents were male, while 47.37% of the survey respondents were female.
Establish business across Africa
Discontinuation of business by SMEs countries
Disposition of entrepreneurs
Entrepreneur perception of opportunity and capability
Ease of Doing business ranking in Nigeria and other countries
Best places to do business
World economies with the highest scores on the Ease of Doing Business ranking share several characteristics, including and especially the widespread use of electronic systems.
Most improved economies to do business
Pakistan improved the process of registering property by making it easier and faster to register a deed. Tajikistan launched a modern, unified and lookup-based security agency that makes it easier to get credit.
Analysis of reforms across every region
Latin America has been far behind other regions of the world when it comes to improving the performance of domestic SMEs. No economy in Latin America has ranked among the top 10 improving economies in the past two years.
Research Design
Sources of Data
Research Population and Sampling
The table above shows the short-run equilibrium coefficient of the variables considered in this study. Based on the findings of this study, immediate restructuring and revamping of the SME sector in Nigeria is recommended.
Technique of Data Analysis
Model Specification
The sets of graphic tables below describe the demographic distribution of survey respondents. Improve knowledge of the business sector by conducting SME studies and research.
Validity and Reliability Test
Test of Hypothesis
However, the analysis shows that trade openness is not significant for the performance of SMEs in Nigeria. Udechukwu, (2003), “Surveying Small and Medium Industries and Their Potential in Nigeria” in CBN Seminar On Small and Medium Industries Equity Investments Scheme, Maritime.
