The starting point of a project is to identify a business opportunity. This exists when a product or service for which there is adequate market is discovered. After conceiving the projects idea, it is necessary to prepare a business plan in order to transform the idea into goods and services. A business plan is a written document prepared by the individual entrepreneur (describing) the goals and objectives of the business along steps necessary to achieve these goals. It is also known as a proposal or feasibility study. The plan is normally organized as a report with the following headings.
(a) Introduction:- Introduce yourself (name, qualification and experience) and state the purpose of the business.
(b) The Product/Service:- State the product/service to be produced. Will you manufacture or buy? What needs will it satisfy? At what price will it be sold? State also production method and raw materials to be used.
(C) The market:- Identify the customers and market segments, market size and market research to be carried out.
(d) Distribution Method:- Determine the number and nature of outlets, alternative distribution channels, distribution problems and how to handle them, warehousing requirements, etc.
(e) Competition:- What is the extent and nature of Competition? Find out competitors’ sales outlets, marketing distribution methods, prices, sources of raw materials, customers quality of personnel and output etc.
(f) Contingency Plans:- What happens should supply be interrupted? What alternative sources of raw materials are available? What are likely effects of bad weather?
(g) Organization and Management:- Proposed form of business ownership, self-managed or employed manager, quality and considered – nearness to raw materials, customers, or workers Transport costs? Specific area to locate premises, infrastructural
(h) facilities available, etc.
(i) Finance:- Production costs, marketing costs; costs of raw materials (including transportation), pricing, etc. Capital to be invested, sources oł finance, proportion of financial statements, etc. Others parts of the plan include analysis of one’s strengths and weaknesses, production plans, legal formalities, etc. These are to be supported by market, search statistics in order allow lenders and other interested parties determine the feasibility of the project.
Environmental Influences on Small Business Activities
The environment refers to the set of all factors, which influence and are influenced by a system. The business environmental includes factors that have either a positive or negative influence on the activities of the firm. The small-scale entrepreneur, therefore, needs to, identify his own relevant environment and scan it on a continuous basis in order to tap the opportunities and avoid the threat therein. It has been observed that “the dependence of the business systems viability on its relationship with the relevant environment is especially important in these times when the rate and magnitude of changes in technology and consumer taste force frequent internal changes in products, processes, and other activities”. The small business environment consists of economical/financial political, legal. demographic, social, cultural, technological as well as competitive factors.
The interaction between the firm and the society in which it operates is such that some environmental problems are caused by the firm and as such are expected to help solve these problems, e.g. urbanization problems, air and water pollution, etc. This is the concept of social responsibility (see chapter nine for details) which emerged in order to make firms incorporate public concerm in their decision making processes. The small business entrepreneur must therefore be aware of his social obligation and realise the threat to the survival of his business if he fails to meet societal demands.
Problems Facing Small Business in Nigeria
The major problems facing small-scale industries include:
(a) High cost of operation: This involves expenditures in the areas of procuring m materials and equipment, paying workers salaries, electricity, water and telephone bills, etc.
(b) Inability to attract much finance. Many of the small business owners are unable to provide collateral securities needed to obtain bank loans while others are scared by high interest on loans.
(c) Poor infrastructural facilities in the area of operation e.g roads, telephone, electricity, water etc.
(d) Some businessmen just jump into any business without feasibility study and the necessary preparations.
(e) Poor pricing and distribution approach.
(f) Wrong location. Some businesses are located where customers cannot have easy access to them.
(g) Inadequate managerial as well as marketing knowledge.
Future of Small Scale Businesses and Entrepreneurship
In conclusion, the personal efforts of individual small business entrepreneur coupled with the effort of government to solve these problems will determine the viability of small businesses and to what extent entrepreneurship will thrive. The success of a small business depends on the attractiveness of its product, its cost efficiency, interpersonal relationships within the firm (and with the external environment), the effectiveness of its distribution network, and its, owner’s capacity for hard work”. With the present political climate, the future of small business and indeed entrepreneurship appears bright. The trend creation of new businesses will definitely continue in the new millennium.
Successive governments in the recent past till now have been encouraging self-employment and the growth of small scale business through various policies, agencies and programmes. The establishment of the National Directorate of Employment (NDE). Export Processing Zones (EPZ),Community Banks the Nigerian Commercial Bank (NACB), the Nigerian Bank for Commerce and Industry (NBCI), the National Economic Reconstruction Fund (NERFUND), etc Some of the initiatives by government to ensure sound and balanced industrial development. There are also monetary and credit policies of the Central Bank of Nigeria (CBN) as well as other fiscal incentives in favour of entrepreneurship (especially at the small and medium scale level). Although, most of the efforts have to be revisited and revitalized by government to ensure their present day effectiveness, a solid foundation had already been laid. Government can also further assist by providing advice and information, trade statistics, organized training in small business management techniques, etc Small business entrepreneurs require a keen understanding of the functional areas of management (marketing, production, finance and personnel) and the ability to effectively implement the required management principles when necessary if they are to remain in business
Small-scale businesses serve as a good starting point for young entrepreneurs. They have some special characteristics that distinguish them from large ones. People go into such businesses to make money or as a result of inheritance. Others find themselves in small businesses due to job dissatisfaction or desire for independence. Small businesses survive in large numbers but the inability of the entrepreneur to recognize the influence of environmental factors may result in business failure. Although, small business messes are faced with various problems, the future is very bright going by the continuous encouragement being giving by the government.
Nigerian Business Environment
The global environment, whether of business or otherwise, consists of myriads of components that keep changing day-in, day-out. This is due to the turbulent and dynamic nature of the world environment at large As this occurs, there a need for thorough consideration of each environmental variable by organisations whether business or non-business, small or giant, public or private, and so on Our attention in this article will be directed to the interaction of business managers or administrators as well as their subordinates with the environment both inside and outside their organisations.
Every time managers in business organisations plan, they need to consider the needs, desires and aspirations of members of the society outside the organisation as well as the requirements for materials and human resources, and technology in the external environment. This they do to a considerable extent with every other kind of managerial function.
Managers or administrators, whether in a private or public sector organisation or even in a religious organisation like a mosque must consider the elements, variables or forces of their internal and external environment if they must succeed in their ventures. This is because while they may be able to do little or nothing to influence these variables, they have no option than to adjust to their requirements. This implies that every organisation, irrespective of its scope and nature must identify, analyse, evaluate, and respond to the changes taking place within and outside its premises that may actually or potentially affect its operations
Nature of Business Environment
Business environment is composed of all groups, institutions and forces that are actually or potentially relevant to the attainment of organisational goals of the business. In effect, the environment of a business consists of all variables, groups (i.e institutions and organisations) that have an actual or potential influence on the decision making process of the business and its ability to realise its predetermined goals. In Nigeria, business environment consists of the sum total of physical and non-physical forces that are relevant or potentially relevant to the formulation, execution or implementation of the business corporate plans, strategies and policies towards attainment of stated objectives, which must be considered by managers when decisions are being made.
From this brief description of business environment, one would see that business managers in Nigeria operate in a pluralist environment this is an environment in which several organised groups represent various interests interact to determine what to produce, where to produce, how to produce, and what style of management to practice. Each group in the Nigerian pluralist environment has an impact on other groups, but no one group exerts an ordinate amount of influence.
Working within a pluralist environment has several implications for business practice in Nigeria as in every economy. For instance, there are checks and balances by various groups on business power and ability. Also, business interests can be made known by joining groups such as the Business Associations or Chambers of Commerce. Again, business participates in projects with other responsible groups for the betterment of the society. This is followed by the fact that, in a pluralistic environment, there can be emergence of conflict or co-operation among various groups where one group is quite aware of what other groups are doing or planning to do, and consequently it is also planning ahead accordingly.