A business whether small or big, or complex, private or public is created to provide competitive prices, business in Nigeria context classified into three ( SMALL, MEDIUM AND LARGE). However a small scale industry can be defined by the criteria of product cost, capital, cost of turnover by the employee etc.
Small scale business, small scale industries and small scale entrepreneurship are used interchangeable to mean a small scale industry from in relation to financing economy growth of Nigeria.
Its deliberation was to refer to the operational definition. In Nigeria and worldwide. There seems to be no specific definition of small business, different Authors, scholars and school of thought have different ideas as to the differences in capital investment available plant and machinery market share and level of development, these attributes equally vary from one country to the other.
In Nigeria the 3rd National development plan defined small scale business as a manufacturing establishment employing less than ten(10) people or whose investment in machinery and equipment does not exceed six hundred thousand Naira.
Central Bank of Nigeria(CBN) in its credit guideline/classified small scale business as those with annual income of less than half a million Naira, to federal government SME development plan of 1981 defined SME in Nigeria as any manufacturing process or service industry,with a capital not exceeding 150,000.00 in manufacturing and equipment alone while SME association of Nigeria 1973 defined SME as those having investment ( i.e capital, land building and equipment of up to 60,000 Naira pre-SAP value) and employing not more than fifty(50) person.
Lastly in the United States, the small business administration defines a small business as one that is independently owned and operated is not dominant in its field and meet employment or sales standard developed by the agency.
Globally the small scale industries and medium enterprises are note for the immense contributions to development process and as the engine tool if economic growth, they are promoted as a critical segent of the manufacturing sub-sector effective strategy for tackling unemployment.
DEFINITION OF SMALL AND MEDIUM SCALE INDUSTRIES
economic literature in the SMI concedes lack of uniformity in the acceptance criteria or measure in the size of SME, because the concept of small-sized industry is relative concept, as it varies from countries and within a single country overtime. For example a small and medium sizes firm in an industrialized country would be viewed as a medium or large sized firm in a developing country.
The World Bank (1990) defines SME as any enterprise that has total fixed asset (excluding land) plus COT, of investment not exceeding 10m in constant.
Inspite the universal definition for SMI there is a general consensus as to the variable used in identifying SMI. The criteria includes, gross output, capital investment (fixed assets) annual turnover and employment.
CBN credit guideline in 1991 defined a small scale enterprises as a company whose capital investment (include land and working capital) does not exceed 25million Naira per annum.
National economic reconstruction fund (NERFUND 1993) classified enterprises to be small scale of its fixed asset (excluding land) were not in excess of 10million Naira
National council on industry defined SMI as any enterprise whose total cost including working capital but excluding the cost of land fall between 1 and 4million Naira and whose staff strength is between 11 and 13 workers. Was also be define as a breading ground for emancipation of indigenous ENTERPRENUERS in the generation and development of fiducially, managerial and marketing skills.
STARTING A NEW BUSINESS
As it occur how businesses comes into existence? On one level this question is easily answer. Someone has an idea and start a business to exploit. The opportunity that the idea represents. New business springing up as regularly as individuals have ideas and act in them.
When exploring on a different level however, the question of how business gets established becomes more much complex and variety of issues emerge. This content would describe the process of starting a new business by exploring your set of questions:
The first concern what the business will be – That is what product or service will it provide and for whom? After the issue of what has been examined we turn our attention to why. Why do it? Why will our prospective customers buy from us? What are we given them that is not already available? How is the competition not serving the market? What advantage will we over competition? The third question deals with how. Even with a well conceived ideal for which a favorable market exists, a new firm needs care for planning if it is to SURVIVE. Do we have the needed resources? Is our technical knowledge sound? Will we get orders and will they come soon enough? Finally we consider who? Specially we examine the question of whether to involve a partner.
INNOVATION AND ENTREPRENEURSHIP
One of the characteristics many people associate with entrepreneurship and innovation, people find a better way & use innovation as the basis for a new business. This is the classic patter of entrepreneurship and when you see a new just established becomes successful. This success story supports the view the entrepreneur and innovation to hand in hand.
Another reason to doubt the link between entrepreneurship and innovation is that the most new business are very similar to many that already exist. The entrepreneurship who opens a restaurant may be serving a new market, may be providing wonderful food and services and may offer an excellent menu -a combination of factors allowing him succeed.
Lastly, while innovation is held by many people to be an essential ingredient of entrepreneurship, it is neither sufficient nor necessary for entrepreneurial success.
SOURCES OF IDEALS
Research finding reveal that idea for a new business emerges from the following:
* First: People got their idea for their firm from the experience they gained while working in the same industry or profession.
* Secondly: Most frequently mentioned was ” I saw someone else trying it and figured i could do better
* Thirdly: Was that an “unfilled niche in the consumer market place” gave them the idea to start their business.
* Fourthly: Was that of “hobby or vocational interest”.
To be continued