EMPIRICAL ANALYSIS OF THE CAUSES OF SMALL BUSINESS FAILURE IN IBADAN

ABSTRACT

The general objective was to conduct an empirical analysis of the causes of small business failure in Ibadan, Oyostate, Nigeria while the specific objectives of the study was to identify the factors that lead to the failure of small businesses in Ibadan, Oyostate, Nigeria; to evaluate the extent to which these factors are attributable to the government and business owners and to identify measures that can be used to address the problems of small business failure.                       The methodology of this study was conducted questionnaire which was used to obtain  from the respondents information needed in order to explain why small businesses are failing. The method of cluster sampling was used to subdivide the small businesses within the study area into 10 subgroups and purposive sampling was used to choose units of analysis in all clusters.                        On the basis of the analysis of the data collected, the study revealed that small business failure was caused by the following factors; lack of planning, lack of inventory management, lack of good customer relation, lack of employee satisfaction and among others. It was also revealed that the percentage of the contribution of government to small business failure is higher than the percentage of contribution of small business owners to small business failure.                                 The study concluded with some recommendations on the need of small businesses to control their revenues and expenditures through the keeping of records in order to have access to loans from financial institutions. In terms of location, small business owners have to seriously consider the ideal location for their small businesses.

TABLE OF CONTENTS

CHAPTER ONE -   INTRODUCTION

1.1 Background to the Study 1

1.2 Statement of Problem             3

1.3 Research Questions 4

1.4 Objectives of the Study 4

1.5 Statement of Hypothesis   5

1.6 Significance of the Study 5

1.7 Scope of the study 6

1.8 Limitations of the Study             6

1.9 Operational Definition of Terms 6

CHAPTER TWO –   LITERATURE REVIEW 7

2.1  The Concept of Small Business  7

2.2  Factors that Lead to Small Business Failure 10

2.3  Major Challenges Confronting Small Business in Nigeria 12

2.4 Small Business Environment in Nigeria 12

2.5 Roles of Small Business in Economic Development 17

CHAPTER THREE -   METHODOLOGY 25

3.1 Study Area 25

3.2 Study Population 25

3.3 Sampling Frame 25

3.4 Sampling Method and Sample Size 26

3.5  Source of Data 26

3.6       Method of Data Collection 26

3.7    Method of Data Analysis 27

CHAPTER FOUR -   RESULTS AND DISCUSSION 28

4.1 Data Presentation and Analysis 28

4.2 Analysis of Bio- Data of Respondents 28

4.3 Analysis of Respondents’ Business Socio Economic Profile 38

4.4 Analysis of Causes of Small Business Failure 28

4.5 Analysis of Measures to Address the Problems of Small Business Failure in Nigeria28

4.6 Testing of Hypothesis 384.7 Discussion of Findings 38

CHAPTER FIVE -   SUMMARY, CONCLUSION AND RECOMMENDATIONS     42

5.1  Summary 42

5.2  Conclusion 42

5.3 Recommendations  43

REFERENCES

APPENDIX (CES)