SUSTAINABLE ENTERPRENEURSHIP HOW NEW VENTURES CREATED SURVIVES BEYOUND THE FIRST FIVE YEAR: A STUDY OF SMALL BUSINESS OUTFITS IN ABAK LGA
1.1 Background to the Study
Eighty percent of small and medium scale entrepreneurs (SMEs) in Nigeria exit business activities in less than 5 years (Small and Medium Enterprises Development Agency of Nigeria [SMEDAN], 2015). The national policy document on micro, small, and medium enterprises (MSMEs) revealed that the labor force in Nigeria has 84% in the MSMEs category (SMEDAN, 2015). Hofferbeth (2017) posited there are issues and challenges that Nigeria faces in bringing about a robust entrepreneurial environment.
Hofferberth touched on matters like poor access to credit facilities, inconsistent government policies, inadequate infrastructural facilities, unstable political atmosphere, security problems, and the activity itself among others. The issues and challenges identified might be responsible for the reason why SMEs are not doing well in Nigeria. Change and innovation can only come when entrepreneurs embrace new technological processes. Enterprise remains the engine of growth in developing economies and will continue to employ the major percentage of the people (Ebitu, Glory, & Alfred, 2016). There was the need for successful survival strategies for business owners in Nigeria to survive the first 5 years of business activities.
The researcher in this study will explore strategies that some small Nigerian business owners use to survive their first 5 years. This problem deserved new research since some small Nigerian business owners lack strategies to survive their first 5 years. The researcher used the success stories of business owners that survived this terrain in their first 5 years, and developed them into a model that new entrants could use to survive the early years.
Previous studies justified why small businesses remain the engine of growth in an economy like Nigeria (Okon & Edet, 2016). Successful small businesses would facilitate the employment chain in the economy, and provide jobs for employees and the business owners, inputs for other firms, tax receipts for the government, products and services for the customers, and inputs for other concerns.
1.2 Statement of the Problem
Small businesses remain the engine of growth in an economy like Nigeria (Okon & Edet, 2016). SMEDAN reported that 80% of growing business owners in Nigeria do not survive their first 5 years in business (Agwu & Emeti, 2014). The general business problem was the high failure of Nigerian SMEs. The specific business problem was that some small Nigerian
1.3 Objective of the Study
The main objective of the study is to examine Sustainable Entrepreneurship: How New Ventures Created Survives Beyond The First Five Year: A Study Of Small Business Outfits In Abak LGA. The specific objectives are to:
- To examine the strategies responsible for business profitability in the first 5 years
- To investigate how business practices employ support business strategies for achieving profitability for the first 5 years
- To analyze the challenges and risks in implementing the business strategies in the first 5 years
- To determine how enterpreneurs are able to mitigate these challenges and risks
- To examine the role professional advisers play to support development and implementation of strategies for business survival in the first 5 years
- To investigate other information enterpreneurs shared about the strategies to employed in becoming a successful business owner
1.4 Research Questions
- What strategies were responsible for your business profitability in the first 5 years?
- What business practices did you employ to support your business strategies for achieving profitability for the first 5 years?
- What were the challenges and risks that you had in implementing the business strategies in the first 5 years?
- How were you able to mitigate these challenges and risks?
- What role, if any, did professional advisers play to support your development and implementation of strategies for business survival in the first 5 years?
- What other information would you like to share about the strategies you employed in becoming a successful business owner?.
1.5 Scope of the Study
The study focused on Sustainable Entrepreneurship: How New Ventures Created Survives Beyond The First Five Year: A Study Of Small Business Outfits In Abak LGA
1.6 Significance of the Study
The study is of great relevance to the following areas as detailed below:
1.6.1 Management Practice
Knowledge acquired from this study would enable the entrepreneurs to be cognizant with how critical the environmental factors are and also how to effectively manage the factors in order to enhance entrepreneurs performance towards the sole aim of achieving their target performance. It would help the businesses to become more sensitive to the uncontrollable factors that are external to their environment which impinges on their business performance; how these factors can be effectively managed and top opportunities for enhanced productivity and profitability.
This study would have substantial benefits for SMEs as it would expose the owners and managers of the enterprises to the principles that are needed to be known and practiced purposively to effectively and efficiently manage their businesses and understand their operating environment.
This study would be useful to the government in the formulation of policies towards SMEs development in Nigeria. It would also help the government in identifying the importance of small and medium enterprise sector in the achievement of economic development and national growth in Nigeria.
The study would provide the organisations and society with the knowledge about how to develop skills in the use of concepts, methods, and tools that can be used to transform environmental pressures into positive business opportunities.