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Chapter one


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 duties include raising cash for investment and providing goods and services to society as a whole.

Providing jobs for job seekers 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 launched in 1988, and it inspired the greatest number of small-scale enterprises across the country. Soap production/operations include cosmetics and dressmaking, among other things. 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 Federal Government’s introduction of SAP into Nigeria, the scope of small-scale industries’ business operations demonstrates their strength in sectors of the economy such as the commercial sector (i.e. wholesalers and retailers), 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 committee on small-scale industrial administration, 90% of such failures are due to a lack of good planning, inexperience, insufficient managerial competence, insufficient financing, poor record keeping, and weak marketing skills.

The remainder. 10% is due to entrepreneur carelessness, staff neglect, and natural disasters. Professional views on small-scale enterprises that have been abandoned include the famed cooking tower restaurant once located at Omole Ogba Opposite Murhi House, which was established in 1998 due to a lack of good management.

The previous restaurant buildings have been transformed into offices. Another company was Textile Mills Ltd, which specialised in the production of textiles and fabrics, as well as garment materials for mass use.

The company was dissolved in March 2002 as a result of mismanagement and misuse of funds, as well as a lack of managerial ability on the side of its management. Another similar firm 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 now being repaired.

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

With regard 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 general economic condition of the small-scale industry is poor.

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 enterprises and, if possible, propose a solution in terms of strategy formulation to ensure that the goals and objectives for which such 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) 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.

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