THE IMPACT OF BUSINESS FEASIBILITY ON THE GROWTH OF SMALL AND MEDIUM ENTERPRISE
Price: 2000 Naira (BSC, MSC)
The study investigated the impact of business feasibility on the growth of small and medium enterprise case study of BWARI LGA FCT, and examined the application of feasibility study in the establishment of these enterprises. It also analyzed the challenges in the application of feasibility study with a view to increasing productivity. The study was descriptive in nature. Primary data were collected through the use of questionnaire from the respondents. Descriptive statistics were used to analyze the data. The study revealed that majority (65.05%) of the respondents conducted feasibility study at the commencement of their businesses, while 57.85% of the respondents were involved in the preparation of the feasibility study. The study further upholds that there might be challenges in the application of feasibility study such as management/personnel (45.5%), technical (29.57%), marketing (27.42%), finance (57.53%), socio-economic desirability (20.42%) and others (6.99%) it does not prevent its application. The study concluded that not minding the challenges encountered by these entrepreneurs in the process of implementing feasibility study its availability has assisted in taking crucial decisions that will not allow their enterprises to fold up or liquidate.
Small and Medium Scale industries worldwide have been classified as a major factor for the economic growth and development of any nation. Small and medium scale enterprise owners are important contributors to the economies of developing countries because they act as an important force for economic development and innovation (Frese and Kruif, 2000). And it is as a result of this strategic role of small and medium scale industries in economic development and the provision of employment to a reasonable percentage of the population that the Nigeria government has since independence, made concrete efforts to encourage the growth and survival of small and medium scale industries in Nigeria.
It also is observed that the small stature of small and medium scale enterprises have imposed on it some innate problems, such as: low equity participation; low level of entrepreneurial skill; inadequate production technology; low level of literacy and low return on investment (Sanusi, 2004). In the Nation’s effort to develop and ensure the growth and survival of small and medium scale industries, government promulgated the Indigenization Decree of 1971 and the Enterprise Promotion Decree of 1972. It also initiated programmes and created parastatals like: Operation Feed the Nation (Green Revolution); the National Directorate of Employment (NDE); the People’s Bank, National Poverty Eradication Programme (NAPEP), National Economic Reconstruction Fund (NERFUND) and Small and Medium Scale Industries Equity Investment Scheme (SMIEIS).
In view of the numerous advantages of SMEs, the Federal Government has, over the years, continued to play pioneering and active roles since the 1970s in stimulating SMEs. Notable among the past and present measures for creating virile SMEs which are capable of sustainable growth include: provision of strong institutional support; ensuring easy access to credit facilities at reasonable rates; provision of industrial banks; provision of continuous training and research and provision of enabling monetary and fiscal policies.
To prevent this prevailing situation in the Nigerian economy, scholars of entrepreneurship are of the opinion that feasibility study would allow more enterprises to reach their full potentiality, as well as experience growth and survival. Although it must be noted, that feasibility study as a barometer for measuring enterprise success or survival has rather been assumed than discussed.
Nwoye (1994) defined feasibility study as “a scientific investigation and analysis of a proposed project in order to determine its economic desirability or valued technical feasibility”. Furthermore Olagunju (2004) refers to feasibility study as “one important document that shows the viability of a business project”, emphasizing that the main concern of a feasibility study is to bring out salient factors which must be considered before investing on a project. When properly carried out, it serves as an aid to investment decisions. Ekpenyoung and Nyong (1992) observe that, it is widely accepted that failure to carry out a feasibility study before embarking upon a project can pose serious problems to the operators of the enterprise; it must be noted that, no serious lender in Nigeria would lend to an investor without evidence that the project is viable, which only a feasibility study can provide. In fact, it is the only requirement that all financial institutions expect all would-be entrepreneurs to give before they are granted loans. Hence this study examine the prevalence of the use of feasibility study by the enterprises, the reasons for their use or nor use of feasibility study at the inception of their business and for those who used feasibility study the challenges they experienced in its application and the impact to the growth to their business.
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