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THE CAUSES OF SMALL SCALE BUSINESS FAILURE IN NIGERIA

ABSTRACT

This study is set to investigate the causes of failure in small scale enterprises in Nigeria, with a view to proffer solutions. In every economy there are simple system as well as complex one. At the simple stage of organization, ownership of business is not always distinct form management; this means that supervision of the business is in the hand of the owner. When the scope of business organization increases, it becomes very difficult for one person to co-ordinate, direct and control. At this point, that ownership and management become differentiated. Therefore, it becomes very difficult for the owner to supervise the business enterprise. It will be easier here for management to pursue goals that are different from the objectives set by the owner; which brings about conflicting objectives that can result in business failure. In Nigeria, it will be difficult to believe that a small-scale business enterprise that is owned and managed by the owner can collapse within a twinkle of an eye. Is it as a result of finance, management inefficiency or government policies? This is what the research work is set to uncover. Based on the findings, the researcher concluded that the failure of government in providing a conducive business environment has affected the performance of small scale business also poor management of resources in no small measure has equally affected the growth of small scale business in Nigeria. Therefore, the researcher recommends that government should try as much as possible to provide a stable and conducive environment and hence organization’s should ensure that both human, capital and material resources are effectively utilized.

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