Essay On Problems Faced By Small Scale Industries In Nigeria
There are many problems that are encountered by business owners throughout the course of managing their business. All entrepreneurs must be prepared for solving problems that come their way. However, creating a startup is not an easy task.
New entrepreneurs are usually not prepared for the problems coming their way. The first thing to do is to understand that problems are an everyday part of every business and then face each problem with determination and a proper solution.
Here are some common faced problems in new businesses and their solutions.
Money is known to be one of the major causes of problems that can lead business to failure. For a new business, the biggest mistake is expecting instant profit. Young and eager entrepreneurs start up a business with little money, assuming they will earn big and then invest that money again in their business. It is significant to understand that you cannot get an instant profit at the start of your business. Experts advise not to expect much profit for at least two years. Always prepare for the worst case scenario. Before starting a business, ensure that you have enough money to sustain you at least up to two years. Start slowly and patiently.
The phrase ‘time is money’ holds true, especially for a business. It is essential for new businesses to manage their time wisely. Planning everything in advance and ensuring everything is done on time is very important for the prosperity of any business. Ensure the schedule you are making is achievable and stick to it. Give yourself enough time to perform a task with accuracy. Plan your future projects. Make adjustments accordingly. Utilize calendars and planners to make sure you don’t miss an appointment or a deadline. Spending time effectively can actually save you money and even earn you more revenue.
3. Lack of Knowledge/Skills
This is one of the top most mistakes made by entrepreneurs. It is important that you have ample knowledge about the industry you are entering, your competitors, your target market, current trends, advertising and marketing techniques as well as financial know-how. You must possess the skills needed to start up a new business. If you are not prepared, educate yourself. Do proper research, ask other business owners, read relevant books and websites. You may end up with a huge loss if you start your business without having the required knowledge and skills.
4. Information Overload
The only thing constant is change! This phrase is true as well as change is continuous and we witness it happening all around us. Today, information keeps changing. New facts and data keeps emerging and replacing old beliefs and trends. Due to this information overload, it gets difficult to find effective solutions. It becomes a challenge for a new business to sort through this data and come up with good decisions. However, one easy solution is to look for the authenticity of the data. Check its references, and the writer. Learn to use keywords to narrow a research topic. Start asking successful businessmen about their experiences. Learn from them.
5. Lack of Direction and Planning
This problem prevails because of not creating a thorough and detailed business plan. Many young entrepreneurs are so excited about setting up their very own business that they fail to prepare a proper business plan. It helps in focusing on the goal and mission of the business. It determines the financial situation of the business, the roadmap to follow, market research and analysis of the competition. A business plan is basically an investment to your business.
6. Working in the Business rather than Working on the Business
Usually entrepreneurs get so worked up with the paperwork, satisfying customers and doing all the necessary things in keeping the business running. They fail to fulfill some other equally crucial tasks. It is important that you take a day or even a few hours to analyze your business. Determine which area needs attention, do an inventory review, review cash flow of your business, review payrolls and employee benefits. It is also important to update your corporate minutes, your contracts and your agreements with stakeholders annually. Hold meetings with your managers and other employees to connect with them.
Unfortunately, there are many new startup companies that stick to the age old book rules. They don’t try to create an innovative culture, even majority of the big businesses struggle with innovation. People get accustomed to the work culture and they don’t think outside the box. Businessmen and employees stay away from change and resist whatever changes that take place in the company. The best thing to do is to be open to innovation. When bringing a change, ensure that all your employees are prepared for it. Discuss it with them in a meeting, tell them how important it is to be innovative, make them understand how beneficial it will be.
8. Trying to Do It Alone
Coping with everything alone is also one of the most common mistake new business owners make. They believe that they can manage everything and don’t need any advice or help form anyone. Initially, they do seem to be successful in this strategy as the cost is low since they handle everything. However, as the work starts growing gradually, the workload takes a toll on the new entrepreneur. Mistakes start being made and the quality of work starts decreasing. You may even start losing customers soon. This is why this strategy is not successful in the long run. Hiring two to three employees is more beneficial for a start up business. It is better to pay a small amount to your workers than lose double the amount in the future.
9. Getting Clients
For a new business, it is difficult to attract prospects and retain customers. With a small marketing and advertising budget, new entrepreneurs are unable to reach out to a wider audience. Potential customers are usually hesitant to going for a new business. They prefer going for companies that have experience and a large customer following. However, the good news is big companies charge more. There are many clients and customers who are looking for companies that provide cheaper, but good quality service. Providing excellent service to them will ensure that they remain your customers and even recommend you to others.
10. Poor Marketing
Apart from a detailed business plan, a marketing plan is also important for any business. Once you have a clear idea about your target market and your competition, you can allocate a budget for advertising and promoting your business and decide which medium to advertise through. You can also decide your product pricing through target market analysis. Make sure you that your pricing can be easily afforded by your target market and that your advertising effectively reaches them.
Download complete project materials on The Role Of Small Scale Industries In Economic Development Of Nigeria
TABLE OF CONTENT
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Table of contents
CHAPTER ONE: INTRODUCTION
Objectives of the Essay
Significance of the Essay
Scope and Limitations of the Essay
1.5 Definition of Terms
CHAPTER TWO: LITERATURE REVIEW
Definition of Small scale Industry
Characteristics of Small Scale industries
Concept of Economic Development
The Role of Small Scale industries
Problems facing small scale industries
2.7 Future Economic outlook of Small Scale industries
CHAPTER THREE: Summary, Conclusion & Recommendations
In developing countries like Nigeria, there is no denying the fact that the small scale industries serve as the foundation or bedrock upon which industrial development could base. This is because , the small scale enterprise promote stable industrial based and ensure a balanced distribution of industrial development of any nation, either developed or developing.
However, a cursory look at the performance of small-scale industries in Nigeria portrays situation of utter neglect, apathy an general underdevelopment until recently.
This situation has seriously hampered the rapid growth of this important sub-sector of the economy this pathetic situation could be adduced to a number of problems hindering the development of small-scale industries such as, management problem, marketing problem, production problem and financial problems.
Other social problems are the problems of high caliber employee, initial capital and quantitative data among other through these factors such as poor personnel, poor production methods, poor management, poor marketing facilities and inability to maintain customer relations, do cause small business failure. The singular effect of the inability of small industries to raise required funds and ineffective fund management greatly over shadowed these factors.
In Nigeria like any other developing countries fail to realize the importance of small scale industries to any economy until recently, the acute shortage of required funds to meet the industrial operational requirements has culminated in their abysm performance and it declining role in the nation economy.
The difficultly of small-scale industries in obtaining required credit facilities and variety of capital issues has further complicated the financial problem facing these industries. The problems of obtain necessary and right type of financial facilities from formal capital markets at the right time in the right quantity and satisfying term is also a serious factors.
To worsen the already precarious situation the credit institutions are not prepared to cater for the special problem involved in financing small scale industries in Nigeria and its attendant effects on the sub-sectors growth and development..
1.2 OBJECTIVES OF THE ESSAY
The main objective of the essay is to examine the role of small scale industries in economic development of Nigeria. Other specific objectives include:
- To investigate on how the establishment of small scale industries in the economic development
- To examine how small-scale industries can be managed
- To identify problems facing small scale industries in Nigeria
- To examine Future Economic outlook of Small Scale industries in Nigeria
1.3 SIGNIFICANCE OF THE ESSAY
The importance of this essay cannot be over emphasized. The essay will be of significance to the following:
- Policy significance: It will be a great assistance to the government in making decision concerning economic development
- Academic significance: This essay will also serve as a reference to other students who want to undertake research.
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