INVESTING IN SMALL SCALE BUSINESS

By

MMELI OGECHUKWU VICTORIA

Presented To

Department of Accountancy

TABLE OF CONTENT

Title Page ii

Approval Page iii

Dedication iv

Acknowledgement v

Table Of Contents vi

CHAPTER ONE

1.0 Introduction 1

1.1 importance of small-scale business 3

1.2 Objectives and theory 4

1.3 Significance of the study 5

1.4 Scope and limitation of the study 6

1.5 Statement of problem 6

1.6 Definition of terms 7

CHAPTER TWO

2.0 Major problem facing small scale establishments 9

2.1 Sources of finance for small-scale industry 13

2.2 Instrument for data collection 16

2.3 Method Of Data Collection 16

CHAPTER THREE

3.0 Summary of findings 17

3.1 Recommendations 17

3.2 Conclusion 21

References 22

CHAPTER ONE

INTRODUCTION

An investment is the purchase of an assets expected to provide a return in future. An individual or organizations willing to forego consumption now in the expected that the return from investing will result in greater consumption later.

Making prudent and financially rewarding investment decision requires the acquisition of knowledge about investment alternatives and the development of the skill needed to evaluate these alternatives. With the myriad investment alternative available in today's complex economic environment, an investor most offer spend considerable time learning about available investments.

Some of these factors that guides a potential investor in making investment management decision include possible growth of the investment, safely of the principal (amount of the original investment) liquidity, income, ease of management, collateral value and tax consideration.

The ultimate desire of any investor is to earn the highest offer tax return possible for the risk involved with the investment.

The first problem that confronts a prospective investor is low to choose a viable project. His dilemma is confounded when he has a series of projects to choose from, no investor will select a project that would require foreign exchange to import its components (machinery, equipment, raw materials) in a country with weak foreign base, in other words its dependence on import has ruled it out of selection.

Availability of raw materials ease of production, which on investment and pay back period are other factors that guide on influence on investor decision. Raw materials are essential ingredients in the production process. In course of production, raw materials undergo transformation and the quantity consumed varies with the output. An investor should first and foremost identify the raw materials needed for operations, their nature and sources of supply. Is it by imports? Or can they be sourced locally or both?

Is there any guarantee of regular supply of the needed quantity for the duration of the project life?

1.1 IMPORTANCE OF SMALL SCALE INDUSTRIES

The importance of small-scale industries in economic development of Nigeria cannot be under estimated. Attention has drawn to the fact that small scale enterprise has received very little attention whereas it provided employment approximately triple the number engaged in large scale manufacturing as well as playing their roles of crucial importance to our developing economy. A good essential argument in development of small-scale industries is that it is one of the best means of capital formation. Again, one of the most important contributions, which the small industry could make to the national economy, is in the area of manpower development. Now, it seems that government has sought to promote small-scale industries as a strategy for self-reliant industrialist.

All the financial institutes of Nigeria should be made to participate in what should be declared as an unavailable real crusade to some the country's economy stagnation and the evil effects of growth with development.

But then, the decision to go into a business of your own may perhaps be one of the most challenging decisions of your life.

This is so because it may involves your taking full responsibility for your own future particularly is respect of employment and income. Many individuals have difficulty bringing their ideas to the market and creating new ventures.

1.2 OBJECTIVE AND THEORY

However, before one amount all his or her resources to the new mission of his/her and turn the venture idea into reality. One need to know himself more honestly and more objectives than ever before.

The main objectives:

To assess the profitability of investing in small-scale business. To determine the availability of raw material used in setting up a small-scale business.

To make recommendations.

1.3 SIGNIFICANCE OF THE STUDY

Today some people over look reality and pursuing the shadow, apparently because of chart of lack of research work on the profitability of the venture of any kind. Small-scale business plays it role in economy such like generation of employment and raising the standard of living of the people in which they tend to be labour intensive for instance, using soap industry as an example. In soap making, there are division of labour such as cutting, packaging, arranging, storing in the warehouse.

The information obtained from this study will provide appropriate base to the operation and potential investor to enable them manage the business most efficiently for the social and economic well being of Nigeria.

This study is intended to provide a guide or an opportunity for any person who reads it to appreciative what small scale industry is the expected problems a new entrant may encounter and finally proffering possible solution of the problem, acquaintance with all the issue to be raised with all things being equal, ginger the enthusiasm of many peoples in this direction with the consequent favorable chain affection the economy.

1.4 SCOPE AND LIMITATION OF THE STUDY

Secrecy is a factor that account for success in many business ventures. There is no doubt that lack of access to the production cost, profit margins, marketing strategies, management style and other success imperatives by competitors can guarantee a safe niche for business in the total market because of this, the researcher found it difficult getting information from investors already in the business.

These limitations not withstanding it is believed that the findings and conclusion reached would be useful to any person longing to go into business on his/her own.

1.5 STATEMENT OF PROBLEM

In the light of Nigeria government active crusade for self-reliance in all share of the country's economic pursuits, and in view the experiences some small-scale business, I realized that, it could provide more employment opportunities to the reaming unemployed citizen of the country.

The problem is that so many people are in production but then how economically is it to produce certain product in small scale. Those that already in the business, do they really make profit on it, is it just to keep themselves busy. Is this really viable?

1.6 DEFINITION OF TERM

a. TERM PAPER

The term paper is an academic report, which may have one of several objectives. In the field business it is information, evaluating or argumentative from the exposition it is the most limited in scope of all the various communication modes. Generally, the term paper is based on a library investigation of some topic.

b. FEASIBILITY STUDY

A feasibility study is a piece of job an assignment or a task, the output of which is normally a report, setting not the extent of viability of a proposed venture. In a normal situation, feasibility study will address a particular product, services or a group of related product or a group of related products or services. It and sold or it may be how it can be manufactured and of course sold.