The Problems Of Managing Small Scale Enterprises In Nigeria (a Case Study Of Ground Metropolis Hotel Enugu)

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This research work is a very crucial study for the managers prospective owners of small scale hotel. The study has motivate by the diminishing state of the hotels and also the prospects. To solve the research problem, both the primary and secondary data were collected. The research instrument used in collecting the data were questionnaire, oral interview and field visits. The respondents comprises of the owners, managers and workers small scale Hotel in Enugu. In organizing and presenting data collected, tables and percentages were used. The various hypothesis were tested using the chi-square.

1.          Most of the respondents rated the performance of hotels as being below standard and easily sheet down.

2.          Most of the respondent rated the hotels and yielding profits with bright future.

3.          Most of the respondents between most operations of the hotel are illiterates, has little money and keep no records of business.

4.          Base on findings, the researcher recommend that:

(i)All hotels and prospects ones should study the proposed sight of their business before location. i.e proper financial records should be kept e.g the cash book          








Title page                                                                         i

Approval page                                                                 ii

Dedication                                                                       iii

Acknowledgement                                                           iv

Abstract                                                                          v

Table of contents                                                             vi


1.1      Background of the study                                        1

1.2      Statement of the study                                           4

1.3      Purpose of the study                                               6

1.4      Research question                                                  7

1.5      Significant of the study                                           7

1.6      Limitation of the study                                           8

1.7      Scope of the study                                                   9

1.8      Definition of terms                                                  10



Review of related literature                                             12

2.1      Definition of small scale business                          12

2.2      Why people want to go into business ownership    17

2.3        scope of small scale business                               21

2.4      Roles of small scale business in national economy 22

2.5        sources of fund for small scale business              24

2.6      Sources of fund for small scale business                25

2.7      Problem of small scale enterprises                 29


3.1      Research design                                                      30

3.2      Source of data                                                         30

3.3      Population of the study                                          30

3.4      Sample size                                                             30

3.5      Instrument for data collection                                32

3.6      Validation of the instrument                                  32

3.7      Reliability of the instrument                                   32

3.8        Method of data collection                                      33

3.9      Method of data analysis                                          35


4.1      Data presentation                                                   36

4.2      Hypothesis testing                                                  45


5.1      Summary of result                                                  47

5.2      Discuss of result/finding                                        48

5.3      Conclusion                                                              51

5.4      Recommendation                                                    52

5.5      Suggestion for future research                               54

Appendix                                                                 55

Bibliography                                                           58







The hotel business of what could be descried as small scale hostel business started as a result of movement of people from one place or town to anther. This movement are categorized in the following.

a.          Movement which on locality or town for example giving to work form one’s house within the city or form one city to anther

b.          Movement from one town to another like in the case of Ogui migration where there is on exodus of the people from rural area to the develop Ogui area. In this case people convened to go out for greener posture like looking for better jobs and business.

c.           Movement from one country to another for business. Study or search for better jobs.

d.          Movement of places of interest like-the Oluko in Abeokuke or Yoruba game reserve.

In the course of these business, it has not been easy for people to come along to required quantity of food and drinks that would  host them the length of time they would stay outside their homes. The instructive desire to help in feeding of these group of travelers brought about the business of hotels.

Before the 15th contrary, what used to be called inns existed in Europe. These were place where travelers spend night or two or more and were served food and drinks at a cost. The inns were merely remedy  by innkeepers between 1750-1850, the year of industrial revaluation the business of hotels become a common thing all over Europe.

In Nigeria the business is said to have started with the arrival of Europeans into the country. Before the Europeans, all travelers woe only catered for by their hoppatabeg, natures. Travelers who come to peace mission were virtually carded for by their hosts. These European or their guide to make the local which brought out some kind of exchange process. As this process continued, the downed on the local people that food could be prepare and sold to these travelers who move form one place to another this was the early shape of hotels until it grew to its present standard which was made possible by the attendant development of the country by the presence of the Europeans. However, the small scale business may not be said to have attained his height in hotel management and its operations due to the difference in tradition and acetone in Nigeria. The different ethnic groups or race have their favourite dishes some of these dishes are  beginning to gain, national acceptance gamins which as feed for the south now eating every were in the north is more food  attatels plays very important role in the economic activities of the country because almost  all business endeavour depend on hostel. Feed the work force of the  economy. Besides the fact remains that a good number of hostels in Nigeria needs better operations and management. The observation consider the development and ethnic difference in the country, the problems and prospects of operating and managing hostels, in Nigerian therefore are what this research is all about. In order to accomplish this study some hostel in Ogui Enugu has been selected as a case stud.                                  


       Management of Federal state and local levels have to set agencies that are specifically changed  with provided funds and other services for the small scale business people. The purpose of establishing there support agencies by government is to encourage to rapid development of small or medium scale industries in the country  for government what to encourage schools level to established their  own small business or reduce unemployment for economic development. These support agencies are national Directorate of Employment (NDE), funds for small scale industries (FSSI) and national Economic Reconstruction funds (NERFOUND) have their various functions. Some are establish to provide loans, render advisory services identity source of raw materials structure their organization which could be managerial or technical structuring. But inspite of all efforts being made, the performance of small scale business in Nigeria are still below expectation.

Especially in the small scale hostels business today there is relatively high rate of business failure, low productivity, managerial function, financial stringency and of good human relations under capitalization etc small scale hotels still perform below expectation.                         


1.        To find out why some small scale hotel still perform below standard.

2.        To find out why there is high rate of business failure in small scale hotels.

3.        To determine the extend of managerial incompetence of owners of small scale hotels in the management of their business.

4.        To determine why there is poor human relation with small scale hotels.

5.        To find out the causes of low productivity in small scale hotels.

6.        To determine the extent of financial stringency in the operations of some small scale hotels.

7.        To recommend what should be done to improve standard of small scale hotels.   



       To serve as the research problem we have asked the following questions.

1.          Are small scale hotels performing below standard.

2.          Are there high rate of business failure in small scale hotels.

3.          What is the extent of management incompetence of owners of small scale hotels.

4.          Is there low productivity in small scale hotels?

5.          Does for human relation have negative effect on the turn of small scale business.

6.          What is the effect of financial stringency on the operation of small scale hotels?     


       The study is very timely, especially today, that the nation is striving towards better economic development and growth. This study will be of great benefit to both the operating and potential hotel owner because it will give a through insight into hotel operations, so that those concerned will gat to know what the business is all about. In the some vein, different categories of hotel customers will be put in a position where they can appreciate hotel problem and probably adjust their irrational behavoiur, the work unravels the tetchiness of the game and to ensure success of the operation by discussing things like customers, workers relationship, marketing strategies behaviour in the restaurant. The study should create the long required awareness in the hotel business.             


       In quest of carrying out this research work the researcher was not able to carry out this work in a more conclusive standard due to the following limitation.

1.          Insufficient Fund: It occurs when an account cannot provide funds to satisfy the demand of payment.

2.          Time Constraint: It means lack of time or shortage of time of do a particular task or activity.

3.          Lack of co-operation of staff: An effective work place requires employees who know how to work together to get the job done when co-operation breaks down, the result reduce productivity.  



       This work cover as selected hotel in Enugu ground metropolis in the eastern part of Nigeria believe that careful analysis of fault obtained will enable us to make general observation regarding hotel business in other cities of Nigeria.

This study tires to identify area of problem such as financials marketing, advertising expansion and other meaningful suggestion that will help manager in this sector to surmount them.        


i.      What Is Small Scale Enterprises

A small scale Enterprise is a business that employs a small number of workers and does not have a high volume of sales. Such enterprise are generally privately owned and operated sole proprietorships, corporation or partnership.

ii.     Definition of Management

It could be define as the act of coordinating the efforts of people to accomplish organization good.

iii.    Operating Management:

It involves the responsibility of ensuring that business operations are efficient, in terms of using of meeting customers requirements.

v.     What is Business?

Business is an organization or economic system where goods and services are exchange for one another.

vi.    Development

It means a specified state of growth of advancement.

It is the systematic use of scientific and technical knowledge to meet specific objective or goal.











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