Challenges Of Managing Small Scale Business Enterprises In A Depressed Economy

INTRODUCTION
This chapter involves the background of the study, statement of problem and the objective of the study will be explained. Research questions and hypotheses will be formulated. Also significance, scope, limitations of the study as well as definition of terms will be spelt out in this chapter.

1.1 BACKGROUND OF THE STUDY
The future economic prosperity of Nigeria lies in the dynamism and growth of small to medium scale enterprises. This is unanimous opinion of an economic dialogue at the instance three bodies, the Nigerian institute of social and economic research bodies. The Nigerian Institute Of Social and Economic Research (NISER), the National Association of Small Scale Industrialist (NASER) and the Frederick Ebert foundation held in Lagos few years ago.
In other words, small scale enterprise constitute vital engine to economic growth and development. The experience all over the world is that small scale enterprises play a significant role in the linkage of the various sectors of the economy, particularly inter-industrial and commercial linkage. Their role in employment generation and the development of indigenous technology is not doubt.
According to Idika (1990:30) “small scale industries are particularly conductive to the creation of more jobs per units of naira investment than large scale enterprises”. They form the link for spatial development and for the diffusion of industrial tradition. Indeed, they are the vanguard of Nigeria’s industrial revolution, they also play active role in rural development and the exploitation of local raw materials. In view of these facts, many governments often were adopted deliberate policies to support the growth and development of small scale enterprises.
According to Faleys (1985:122) in Nigeria deliberate government effort to support the survival and growth of small scale industries started in 1970, with the establishment of the small scale industries division in the federal ministry of industries as well as development centers in the same year”. Ever since then, a number of institutes /agencies and scheme have been formed and introduced to encourage the development of small scale business. These include the Nigeria Bank for Commerce and Industry (NBCI), the Small-Scale and Medium Scale Enterprises (SME), Apex Unit Loan Scheme, the National Directorate of Employment (NDE), Small Scale Industries (SSI), Scheme and the Small Industries Corporation (SSIC).
The Central Bank of Nigeria (CBN) in its monetary policy circular directed that 20 percent of bank’s total loans and advances be granted to small and medium scale enterprises. Banks which do not comply with this allocation are made to deposit short falls (interest free) with the Central Bank of Nigeria (CBN) for on-lending to SMEs.
Despite all the government efforts, one main feature of small scale industries in Nigeria as observes have noted is that there is concentration of industries in the production of light and consumer oriented goods to the utter neglect of intermediate goods used by heavy engineering production and chemical based industries.
In most developed countries, governments have come to recognize the indispensability of this sector and therefore giving greater incentives in the support of small scale enterprises, such as provision of facilities in terms of access to cheap credit, training and infrastructure so as to encourage them to play a catalysts role for increased economic growth. However, it is important to mention here that despite the attraction of the small scale enterprises as catalysts for economic growth, many problem still persist which include lack of access to capital, low level of education, lack of managerial and technical know-how and inadequate infrastructural facilities to mention just a few.
It is against this background that this study is being undertaken, to find out the challenges of managing small scale business enterprises in a depressed economy with particular reference to the fast food industries in Owerri Area of Imo State.

1.2 STATEMENT OF THE PROBLEMS
Given the generally acknowledged low capital technology, greater susceptibility to indigenous technology, among others the importance of small scale industries is well recognized in most modern economics.
However, the problem of this research is to look at the challenges faced by small scale enterprises in a depressed economy with emphasis on fast food firms have been able to overcome some of the problems associated with small scale enterprises and its contribution, in terms of employment generation, the development of entrepreneurship will also be worked at.

1.3 OBJECTIVE /PURPOSE OF THE STUDY
This research work seeks to:
1. Find out the major problems faced by fast food industry in Imo State with particular reference in Owerri and its environs.
2. Find out how fast food business has been able to face the challenges and demand for its product/service in a depressed economy.
3. Find out the contribution of fast food to the economic to development of Imo State in a depressed economy.
4. To ascertain the extent of government involvement and assistance to small scale enterprises, especially in the fast food sector.
5. Identify how small scale enterprises in the fast food sector have been able to stimulate indigenous entrepreneurship.
6. Find out how fast food venture in Owerri and its environs has been able to adopt modern marketing strategies to enable them compete and boast their business and to hold their own against competition.
7. Find out how these fast food vendors have been able to meet their financing requirement in a depressed economy, considering the high interest rate required.

1.4 RESEARCH QUESTIONS
This research work will attempt to address and provide answer to the following questions.
1. What are the major problems faced by fast food industry?
2. What extent does fast food industry contributes to the economic development?
3. What are the measured adopt by fast food industry to face the challenges and demands for its product/service in a depressed economy?
4. What roles the government had played to assist small scale enterprises, especially in the fast food sector?
5. To what extent, small scale enterprises in the fast food sector have been able to stimulate indigenous entrepreneurship?

1.5 RESEARCH HYPOTHESIS
Having identified the critical issues, we meant to study in this work the following hypothesis which has been formulated to serve as an effective guide hypotheses will be tested at 5% level of significance.
Ho1: Finance is not of the major problems limiting the success of small scale fast food business in Owerri.
HA1: Finance is one of the major problems limiting the success of small scale fast food business in Owerri.
Ho2: Low availability of infrastructure is not a major hindrance to the activities of small scale fast food business in Owerri.
HA2: Low availability of infrastructure is a major hindrance to the activities of small scale fast food business in Owerri.
Ho3: Ineffective management has not been the major problem of small scale fast food business in Owerri.
HA3: Ineffective management has been the major problem of small scale fast food business in Owerri.

1.6 SIGNIFICANCE OF THE STUDY
This study will be immense importance to the federal and state governments and the various industrial development agencies. This is because these bodies will be better equipped to reap praise and reorganize their packages for small scale enterprise.
The work will equally be of great importance to the individual small scale industrialists and the National Association of Small Scale Industrialists (NASI) Imo State chapter. This is because the finding of this study will point out their opportunities and weakness within their fast environment.
The fast environment of an organization, according to James (1978:17) includes “customers, suppliers, competitors, regulators, unions, and association”. This is because the relationship between organization and their task environment is much closer and more direct, most organization now focus more on it than on the general environment.
The study would be significant to student who might wish to use it as a basis for further research. It would serve as a spring board from which further research might take off. The data already gathered and documented in this project will serve as a source of information to students.

1.7 SCOPE OF THE STUDY
The study is directed towards small scale enterprises business in Imo State. Therefore, this research is restricted to the fast food business in Imo State study of Mr. Biggs Imo State is one of the most important cosmopolitan states in Nigeria, it enjoys one important advantage over most other Nigerian states that is blessed with very enterprising and hardworking businessmen. As a result, Imo State has a number of small, medium and large-scale businesses and is one of the fastest growing areas in the country.

1.8 LIMITATIONS OF THE STUDY
It is envisaged that the limitations are time constraint, infrastructure inadequacies, cultural and social inaccessibility, ignorance and so on, the study will be limited to a selected group of fast food small scale business enterprises in Owerri as already pointed out above.
Time Constraint: The time available for this research to be carried out in limited since other activities are bound to infringe and interface with the time allocated to the project.
This time was constantly been depleted by the incessant changes in the school calendar. Also being a student’s research, the research is often expected to complete the work within a specific time for it to be successful.
Lack of Funds: This research is constrained financially because of the high cost of material. The high cost of transportation occasioned by increased in fuel has not help matters in any way. Since has to travel to places to collect materials for the research. The result is that research fund may be insufficient or inadequate for one to carry out the research as would wish to.
Infrastructural Inadequacies: There is a general lack of or inadequacy of infrastructures such as textbooks, libraries, telecommunication equipments, computers, transportation, networks and social amenities that make life comfortable for the researcher.
The lack of appropriate textbooks in most libraries is a serious impediment to a researcher of this nature, majority of the libraries is not well stocked with the prerequisite textbooks.

1.9 DEFINITIONS OF TERMS
The under mention terms are defined in the manner they are sued in this study:
SSM: Is acronym for small and medium enterprises.
SSI: It is also acronym for small scale enterprises.
SBA: Small Business Administration
UAC: United African Company
GNP: Gross National Product
ILO: International Labour Organization
AU: African Unity
Fast Food: Are those kinds of food that are regarded as specialty food prepared and ready for consumption e.g. meat pie, sandwich etc.
Stand: A stand is a platform or table used by petty traders or hawkers to display their goods or products.
Depression: An economy where general business activity is down over a long period, purchasing power is greatly reduced and unemployment is high.
EI: Expected frequency in the class
OI: Observed frequency in the class
NDE: National Directorate of Employment
DFRRI: Directorate of Food, Road and Rural Infrastructure.
IDC: Industrial Development Center
SSIC: Small Scale Industries Corporation
NACB: Nigerian Agricultural and Co-operative Bank.
FUSSI: Fund for Small Scale Industries
NERFUND: National Economic Reconstruction Fund
HO: Null Hypothesis
HA: Alternative Hypothesis
CBN: Central Bank of Nigeria
FEM: Foreign Exchange Market
K: Number of classes
X2: Chi-square employed in hypothesis testing in comprising an observed distribution with a hypothesized frequency.