CHAPTER ONE
INTRODUCTION
The Government both federal and state is now placing much emphasis on the promotion of small and medium scale enterprises (SMEs) with the view to improve the economy. To the view, the government has a policy of providing special support and protection to these enterprises. This is because these enterprises will produce some of the goods that the country has until now imported, thus conserving our dwindling foreign exchange earning. It is also hoped that these enterprises would help not only to generated employment opportunities for our young school leavers and university graduates but also export some of their products and earn some foreign exchange for the country.
Over the years, there has been an unsolved issue of a proper definition of small and medium scale enterprises. This lack of encompassing definition emanated from the criteria employed to characterized small and medium scale enterprises; However the main criteria used to classify small and medium scale enterprises include initial capital outlay, ownership structure, management style, profit level, market structure, number of employees, total assets size, type of industry, relative position of the industry etc. The center for management development gave the definition of small and medium scale enterprises (SMEs) to the policy proposal submitted to the federal government to June 1982 as a manufacturing or service enterprises involved in a factory or production type of operations, employing up to fifty full time workers. Investment in plant and machinery but excluding land and building shall not exceed five-hundred thousand naira (N500,000.00) plant and machinery is utilized in its operation. According to Drucker P.F. 1974, maintains that there is only one criteria, which with a fair degree of reliability, indicate whether a business is small, fair sized, medium or big. He says that a small business requires almost one man who is not engaged in any other functional work required. The man at the top knows who the few people are in the organization in which responsibility for key results rest without having to consult his records or associates.
The committee for Economic Development (C.E.D) of the United States has given a valuable list of characteristics of small and medium scale enterprises as follows:
i. Managers are also owners
ii. Areas of operation are mainly local
iii. Owners raise the capital
iv. Its size is relatively small when compare with large enterprises.
Above all, the objectives of every SME should be to provide a direct service; distributing goods and services or more basically, the satisfaction associated with them. Another objective of any SME is also to make profit. Profit is the reward for accepting business risk and for performing the economic service. Others are social and growth.
PURPOSE OF THE STUDY
Lots are the purposes for carrying out this study. These are as follows:-
i. To know the fundamental factors which restrict Anzy shoes Ltd Aba from rendering a sound and complete services.
ii. To make recommendations on what can be done to improve its performance or its productivity.
iii. To ascertain the environmental development of Anzy shoes Nigeria Limited Aba.
iv. To understand what small and medium scale enterprises are all about.
v. To examine the contributions of small and medium enterprises (SME) to the Nigerian Economy.
vi. To know the features and characteristics of small and medium scale enterprises.
vii. To examine the governmental aid and control towards SME.
viii. To know the legal legislation guiding all small and medium scale enterprises.
ix. To educate people of its relevance to the economy.
RESEARCH QUESTIONS
i. What is small and Medium scale enterprises.
ii. What are the likely factors militating against them.
iii. What are the current legislations guiding SMEs.
iv. How can SMEs positively or negatively affect the economy.
v. What long and short – term plans do government have towards improving SMEs.
vi. What are the likely economic environments for which SMEs can survive?
vii. To what extent has government incentives toward SMEs influence the economic development.
viii. What are the things that can cause the failure in small and medium scale enterprises.
ix. What are the factors necessary for proper management of small and medium scale enterprise.
x. Is there any difference between small and medium scale enterprises.
STATEMENT OF HYPOTHESIS
i. Small and medium scale enterprises leads to Economic development.
ii. Small and medium scale enterprise creates job opportunities.
iii. Small and medium scale enterprises at high concentration bring about a heap cost of goods and services.
iv. The location of small and medium scale enterprises leads to efficient usage of raw materials which would have been waste.
v. High concentration of small and medium scale enterprises in a place improves the people’s standard of living.
SIGNIFICANCE OF STUDY
In the course of this study, the researcher going to look into the various importance or usefulness of small and medium scale enterprises to the Nigerian economy especially in Aba Abia State.
Under this significance of study, we have to understand that the project in conjunction with other industries will attract or aid the infrastructural development of the rural areas and thereby attract other amenities to the areas. This research is also of tremendous significance especially when one realizes the contribution of small and medium scale enterprises to the socio – economic development of Nigeria and Aba in particular.
Below are the few listed significance:-
i. It will enable young school leavers to embark on any enterprise of their choice when a paid job cannot be obtained.
ii. It will enable researchers to discover and make good use of the potentials in the rural areas.
iii. The availability of small and medium scale enterprises in rural areas will definitely reduce unemployment.
iv. It will lead to the full knowledge of the processes of establishing and managing small and medium scale enterprises in a manner that it will be beneficial to the state and the nation at large.
v. It will be of great benefit to financiers, bankers, marketers, advertisers, managers etc to have more experience in their field of study.
Conclusively, small and medium scale enterprises has been noticed in some years back to be good in the use of local raw material for their production unlike those of large scale enterprises which depend mostly on imported raw material. Small and medium scale enterprises serve as a training ground for local entrepreneurship, as many of them would develop into large enterprise.
SCOPE OF STUDY
The scope of the research work is limited to Anzy shoes Nigeria limited Aba in Abia state. Though it covers the developmental strategies to the national economy of Nigeria.
This research work also covers the history and origin or small and medium scale enterprise. Examples and its operations. Constraints and management practices employed by the industry.
DEFINITION OF TERMS
ASSET
An asset is anything owned by a person, company that has money value and that which may be sold to pay debts. It can be defined as the capital of company les its liabilities. (Asset = capital – liabilities) Asset could be in tangible form or in intangible form. It could equally be in liquid or fixed.
BUSINESS
This is a contractual relationship between two persons, companies or two parties of which it is for the purpose of buying and selling.
CAPITAL
Capital can be in money form or otherwise. It is that initial wealth, property or money that may be used for the production of more wealth, money with which a business is started.
COMMERCIALIZATION
This is the transfer of business ownership in hands of government for commercial purposes. Most of the ventures in the hands of government are not for profit making but government can decide to use the venture to make little profit.
PROFIT
Profit they say is the reward for taking a risk. To go into business is to go into risk; for one to succeed from the business is to the primary reason for going into business ownership and operation.
INFRASTRUCTUTAL DEVELOPMENT
Things like good roads, electricity, pipe-borne water, market etc assist business development. for any business establishment to tries well in any area, there must be a developed infrastructures.
INDUSTRIALIZATION
Industrialization is the concentration of industries in a given area.
INVESTMENT
This is the planting of one’s wealth into a lasting project which will be yielding its revenue as the period goes by.
ENTERPRENEUR
An entrepreneur is one who establishes his own business, bears the risk himself and takes his profit alone. He gives order on what should be done in his business and what should not be done.
PRIVATIZATION
When the government has decided to sell some venture in other care to the private hands, we say that the business is privatized .
SOCIO – ECONOMIC DEVELOPMENT
This can be seen as the improvement or growth in the economic aspect of living.
ORGANZATION
An organization which could be seen as a business set-up. It could be private organization or public organization.
WEALTH
Create or valuable acquisition which could be in money form or in other tangible form.
TECHNICAL INNOVATION
This is a new way of presenting an existing product in such a way to attract the consumers interest.
MONETARY POLICY
This is a government measure which deal with the discretionary control of money supply by the monetary authority with a view to achieving the stated economic objective.
