CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Many small scale business are successful today not only by accident
or mere luck but because of the presence of some factors and conditions these
factors and condition are just the basic prerequisite for source in any
business whether small or large.
According to Richard (2004) views small scale is the art or science
of innovation and risk taking for profit in business the quality of being an
entrepreneur.
Olokoyo (2002) small scale business is one that is independently
owned by one or small group of people. It is not dominant in its field or
operation, generally has few employees, limited capital investment and a
limited level of scale turnover.
Generally it is required that before starting any businesses good rational
must be the drive. Ben (2007) small scale is the magnificent ability and
willingness of an entrepreneur within and outside the existing organization to
identify and create new economic opportunities like new products, new
production methods and new product market combination and to introduce their
innovative ideas into the market environment.
Business are established and managed for the achievement of some
objective, apart from growth creativity employees and customer satisfaction
good corporate image of the industry few profit has become the basic objective
for any business enterprises for coming into existence.
Stonner and Freeman (1992) view small scale business as the
generation of new ideas technologies, products/service and innovation is the
translation of view ideas into the environment for develop – and growth of the
economy. The profit ability of small scale business could be negatively affect
it the operations by may front such as decreasing in sales or to higher labour
cost, but it should be bore in mind that it is of this project work to find
ways in which the project work to small scale business are been affected and
what lasting solution or resource could be affirm to it.
1.2
STATEMENT OF THE PROBLEMS
In
Nigeria today they are numerous problem confronting small scale industries in
Nigeria which are as follows:
There is decline in sales level, the labour cost is higher, there
is an increase in selling cost, the cost
of raw material or importers is been increase, the operational cost increased there
is unusual loses equal by or is as spoilage shortages by national disaster.
1.3
OBJECTIVES OF THE STUDY
Any research or project without aims and objectives will be
considered meaningless. The objectives of this study are as follow;
a)
To highlight the important
and prospect of small scale industries in the development of the Nigeria
economy.
b)
To examine or point out the
vital aim of setting up a small scale industry and to bring the fact into
consciences of people.
c)
To examine the role government
play in the building of small scale industries
d)
To identify the special
problems encountered by small scale industries and how these problems can be
tackled
e)
To examine how the
profitability of small scale industries can be affected and the side effect and
how this issue can be handled.
1.4
STATEMENT OF THE HYPOTHESIS
For the purpose of achieving the aims and objectives of the study
which already stated;
The following hypothesis are formulated;
H0: There is no relationship between operational
factors and the profitability of small scale industries
H1: There is relationship between operational
factors and the profitability of small scale industries.
1.5
SIGNIFICANCE OF THE STUDY
The study is hope to contribute significantly on how important
small scale industries are to on individual, a business person, the society and
the government, bringing strong awareness on how best to set up small scale
business and to adequately mastermind its operational activities to safeguard
failure.
It also analyzes the important of profit to every business
organization and its influential roles it plays both in the internal and
external set up of a business. It also implied way on which the government, the
society and the general public ought to be of motivational encouragement to
business activities, lastly, it will enhance knowledge towards the general understanding
of small scale business thereby making it to serve as a useful secondary data
source for students in various institutions in Nigeria.
1.6
SCOPE OF THE STUDY
Among numerous business organizations all around us, this research
work is meant to limit it scope around small scale industries, most especially
on what will affect its profitability nature with Home Fresh Yoghurt Nigeria
Limited, Kaduna as the case study. It also covers how the government contribute
their own quota to the industry.
1.7
LIMITATION OF THE STUDY
The researchers effort in the course were constrained by the
following factors;
Time Factor: The time given by the project coordinator was not enough to carryout
the research effective.
Secretiveness of the organisation of case study to reveal certain
information needed especially in the course of the historical background of the
organization.
Financial constraints i.e this did not enable the researcher to
source for all relevant information from text books, journals, periodic project
for the purpose of research.
1.8
HISTORICAL BACKGROUND OF THE CASE STUDY
The Home Fresh Yoghurt was established in 1998 as a
private limited liability company and is registered with Corporate Affairs
Commission. Its head office is located at No21 Ahman Pategi road Ung/Sarki
Kaduna, and it farm is located at Niyya farms limited KM 3 Abuja express way
Kaduna. The head office is headed by a manager and assisted by two deputy managers;
one is in charge of Administrative (operation) and the other in charge of
finance and supplies. The head office also has one clerical staff two
assistant, two sales girls, one receptionist a messenger and daily cleaner.
Home fresh Yoghurt produces about 2,500 tones of
yoghurt daily and has about 500 cows, chicken (layers) 300 goats, 200 turkeys
and cultivated land of about 1380 sgkm. The firm is divided into 3 sections
each headed by a worker who is in charge of his section and a manager
responsible of the farm on a daily basis.
Home Fresh Yoghurt produces 10,000 tones of fresh
milk per day, 200-217 crates of egg, 200-400 kg poultry meat per day raw
materials needed on the farm include feeds of concentrate which are brought
from premier seeds and ECWA seeds pullets.
Roughages and hay stock are for the cows, goats and
layers are also from the same supplier. One major problem of the farm is the
outbreak of disease hence the animals are always visited once in every two
weeks by doctors from ministry of agriculture and natural resources. Livestock
control unit and again they are vaccinated against livestock and animal disease
such as Rinderpest, cattle foot and mouth disease, high fever and other
epidemics.
Niyya farms ltd is the parent company of Home Fresh
Yoghurt i.e. Home Fresh Yoghurt Ltd is a subsidiary of Niyya farms their turn
over in output (profit) cannot be revealed due to some strategic reasons.
1.9 DEFINITION
OF TERMS
Commercial Activity: The
act of buying and selling goods or services to make profit.
Profit: A
gain mostly in monetary form for conducting a business.
Small-Scale Business: A
commercial activity set up to be operated on a small form.
Business: An
act mostly concerned with buying and selling with the mind of making profit.
Society: A
particular set of people living in an area with having things in common.
Capital: Capital
is mostly associated with the money to start up a business.
Industry: A
place where product and services are been made for sales in monetary terms to
make profit.
Entrepreneur: Someone
who can identify and take on business opportunity by establishing, arranging
the business and taking risks in order to make.
Scope: This
is the area of the coverage.
Government Policy: Government
plan in the form of guide-post for decision making which permits the use of
discretion for leaders.
Product: A
product is any need-satisfying offering of a firm. It can be a physical good or
a service or a blend of both.
Services: Employment
as servant, work done for another department of public employment persons in
government employment as the civil service.
Organization: Is often
used loosely. To Henry Fayol to organize a business is to provide it with
everything useful to its functioning that is materials tools, capitals and
personnel.
Manager: Is
a person that controls the role of the organization and also take change of all
that take place in the department.
Participatory Role: The federal, state and local governments directly
participate in businesses through investment and management stake in different
types of activities.
Regulatory Role: To project the
interest and welfare of the general citizenry, preserve the environment and
ensure fair especially in competitive actions of businesses.
Facilitating Role: Governments,
because of numerous advantages of business organizations to the society,
governments, other organizations and individuals, play major roles in ensuring
healthy existence and smooth operations for them.
Operation: Operation
are refer to the area through which small scale industries channel out their
various functions or task.