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However, considering the term “small”,
there’s a whole lot of enormous challenges that come with it. In Nigeria, the
factors working against the development and growth of local businesses are
quite numerous, some of which include:
1.
The issue of funding is a major problem with SMEs in Nigeria.
However, the problem is not how to source it but the accessibility to either
short or long term loans.
2.
Lack of infrastructural facilities is a serious impediment to the
performance of SMEs. The problem of inadequate infrastructural facilities
includes electricity, good road network, availability of potable water, and
solid waste management. These infrastructures are left to the business owners
to provide themselves.
3.
Poor Management and Low Entrepreneurial Skill Base is a serious
clog in the survival of small businesses as there is a lack of essential and
required expertise in business which leads to wrong and costly decisions and
mismanagement.
4.
Entrepreneurs often blame their failures on inadequate sales.
However, the problem lies with poor marketing skills that could help promote
their sales.
5.
Most entrepreneurs go into business without proper planning by
taking a realistic view of what their strengths and weaknesses are, let alone
giving careful consideration and analyzing the economic trends or business
conditions in that particular sector of activity, which sometimes leads to
mishandling when the business starts to expand.
6.
The root of most employee problems in Nigeria is poor personnel
management. They put aside personnel matters till crises set in. Such crises
usually pose serious threats to the firm’s survival if they are not promptly
looked into.
7.
The harsh deteriorating macroeconomic environment in Nigeria has
adversely affected the performance of small business enterprises and has posed
as a major challenge to their survival and growth. Most small business
enterprises are struggling with the problem of uncertainty caused by the
unstabilized macroeconomic environment and policy shifts.
With all of this ongoing, some of the solutions preferred to ease these challenges include:
1.
The need for government, and non-governmental organizations to
create Seminars and workshops initiatives and other forums, to establish a
platform for the interaction of SMEs owners/managers with others which can help
to improve on their management capabilities.
2.
Government should also provide the necessary infrastructures in
order to ease the burdens and thereby encourage and promote rural
industrialization.
3.
The SME owners/managers should strive to develop effective
marketing strategies in order to boost business operations which will become
profitable.
4.
It is important for SMEs to develop good personnel management
policies to avoid crises that could affect their business.
5.
Local business owners should take to proper planning, realizing
his strengths and weaknesses before diverting into any business to avoid
mishandling.
6.
Governments should help create a macroeconomic environment that is
stable as it will enable these local businesses to make reasonable forecasts on
costs, turnover, and return on investment.
7.
The government should help in making funds easily accessible to
SME owners/managers, be it short or long term loans that could help to
encourage them to execute their business plan.
8.
SMEs operators should also develop their
competences in managing and sustaining their businesses by constantly engaging
in training, research and development.
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