GST 106: BUSINNESS OPPORTUNITIESAND

EVALUATION.
CONCEPTUAL ISSUES ON ENTREPRENEURSHIP
AND ENTREPRENEUR
The concept of entrepreneurship is associated with a number of activities including
the following:

1. The ability to create and build something from nothing

2. The ability of having a vision matched with focus and determination of
building an enterprise
3. The skill for seeing an opportunity where others fail to do so
4. The ability to build a working team to complement your own talents and
efforts
5. The ability to aggregate marshal control resources judiciously
6. The willingness and ability of innovativeness and creativity etc.

Personal traits of entrepreneur are manifested in:

1. Creativity

2. Dedication

3. Determination

4. Flexibility

5. Leadership (must possess leadership qualities)

6. Self –confidence

CONCEPTUAL ISSUES ON SMALL AND MEDIUM SCALE

ENTERPRISE (SMES)

Attempts have been made to define SMEs based on the following:

1. Employment, that is number of employee.
2. Asset value, this includes the total cash, inventory, land and machinery.
3. Annual sales volume or sales revenue.
4. Owners’ equity, that is the total investment made by the owners or
shareholders excluding creditor’s contributions
5. Market share and
6. Level of development

ENTRPRENEURAL FINANCIAL INSTITUTIONS

Bank of industry is a product of merger of Nigeria industrial development bank,

Nigeria bank for commerce and industry and central bank of Nigeria.

 Central bank of Nigeria: issued directives to commercial banks to disburse

certain percentage of their credit facilities to SMEs at a preferential interest
rate. Failure to comply attracts penalty on banks.
 Industrial development centers (IDCs): they were set up to provide extension
services to SMEs in areas such as evaluation of projects for loan application,
organizing training programme for entrepreneur, managerial assistance,
product development, planning and control of production, e.t.c
 International financial assistance: government negotiates with international
financial institutions such as World Bank and its affiliates, African
Development Bank (ADB) to source for funds for the SMEs sector,
government often guarantees and accepts to monitor or co-finance the SMEs
benefiting from the external financial support.
 Manufacturer Association of Nigeria (MAN): this was formed in 1971 as a
company limited by guarantee to perform important roles on behalf of its
members.
 National association of small and medium enterprises (NASMEs): this was
formed to network capacity building, policy advocacy and promotion of the
performance of its members firms and operators.
 Nigeria Chambers of Commerce, Industry, Mines and Agriculture
(NACCIMA): this body is a voluntary association of manufacturers,
merchants, miners, farmers, financers, and industrialist, trade groups who
network together for the principal objectives of promoting, protecting and
 improving business environment for micro and macro benefits. The first
chamber of commerce in Nigeria was Lagos chamber.
 Small and medium enterprises development agency of Nigeria (SMEDAN):
this body was established to promote the development of micro small and
medium enterprises (MSMEs). Its mission is to facilitate the access of
MSMEs investors to all resources required for their development. Its vision
is to establish structured and efficient micro, small and medium enterprises
sector that will enhance sustainable development of Nigeria.
 National poverty eradication programme (NAPEP): this programme aimed
at poverty eradication and empowerment (skill acquisitions, provision of
training opportunities, wealth creation, and improved rural development).
 Micro finance institutions (MFI): the micro finance is set up to meet the
credit needs of the rural and urban poor artisans, petty traders, e.t.c
 Small and medium industries equity investment scheme (SMIEIS); this
scheme requires all banks in Nigeria to set aside 10% of their profit after tax
for equity investment and promotion of small and medium enterprises. This
is to stimulate investment in the sector in order to boost economic growth
and development.
 Small and medium enterprise credit guarantee scheme (SMECGS): the
scheme was introduced by the central bank for promoting access to credit by
SMEs in Nigeria, the credit facilities provided by the scheme are: working
capital, refinancing of existing lease, resuscitation of failing industries,
refinancing of existing loans, long term loan for acquisition of plants and
industry.
 Agricultural credit guarantee scheme fund ( ACGSF) : the ACGSF was set
up in 1977 and it started operation in 1978. Virtually all the farmers’ society,
farmers’ group and cooperatives will be categorized as SMEs. The fund
guarantees credit facilities extended to farmers by banks up to 75% of the
amount default net of any security realized.

APPROACHES TO FINANCING SMEs ENTREPRENEURSHIP IN

NIGERIA
The source of finance can be categorized into three distinct classifications,
namely: short term; medium term and long term.
 The sources of finance available to SMEs as enumerated by Ewiwile, Azu
Adowa (2011) and Akinola (2013) are as follows:
1. Trade credit
2. Customers/clients/advance payment
3. Overdraft
4. Bankers acceptance
5. Bank loan
6. Hire purchase
7. Factoring of debtors
8. Leasing
9. Venture capital
10.Debenture
11.Preference share
12.Retained earning

CONSTRAINT TO SMEs FINANCING IN NIGERIA

Though the bank remains the main formal source of finance for entrepreneur, a
survey of the world bank in Nigeria (2001) showed that about 855 of the firms
had relationship with banks, most of them had no account to credit ( Terungwa,
2011). This is traceable to the following:
 Inadequate collateral
 Weak demand for the product of the SMEs as a result of the
dwindling purchasing power of Nigerians
 Lack of patronage of locally made goods
 Poor management of practices by SMEs under capitalization.

To overcome these problems, the federal government policy intervention for

funding of SMEs is generally geared towards improving the expected contribution
of the sector growth and development of the national economy. Government has
over the years introduces varieties of programs such as:
 National economic reconstruction fund (Mid, 1980s)
 Family economic advancement programme (FEAP). 2002
 Bank of industry (2002)
 Microfinance institution (MFI), 2005
  Small and medium enterprise equity investment scheme
(SMEEIS) 2009
 National economic and empowerment development
strategies, (NEEDs) and
 Local economic and empowerment development strategies,
LEEDS.

DEVELOPING THE BUSINESS CONCEPT, CONDUCTING MARKET

RESEARCH

WHAT IS MARKETING?

According to American Marketing Association (2013), marketing is described as

the activity, set of institutions, and processes for creating, communicating,
delivering and exchanging offerings that have value for customers, clients, partners
and society at large.

WHAT IS MARKETING RESEARCH?

Marketing research is the function or set of processes that links the consumer,
customer and public to the marketer through information used to identify and
define marketing opportunities and problems; generate, refine, and evaluate
marketing actions; monitor marketing performance; and improve understanding of
marketing as a process. OR

The systematic and objective identification, collection, analysis and dissemination

of information for the purpose of assisting management in decision making related
to the identification and solution of problems and opportunities in marketing.

GOAL OF MARKETING RESEARCH

Marketing research is the systematic gathering, recording, and analysis of

qualitative and quantitative data about issues relating to marketing products and
services. The goal of marketing research is therefore to identify and assess
how changing elements of the marketing mix impacts customer behavior.

Note that all areas of marketing and all marketing decisions should be supported
with some level of research.
DIFFERNCES BETWEEN MARKETING RESEARCH AND MARKET
RESEARCH

These two terms is commonly used interchangeably, however, there is a

distinction, in that market research is any organized effort to gather information
about target markets or customers. It is a very important component of business
strategy concerned specifically with markets, while marketing research is
concerned specifically about marketing processes.

IMPORTANCE OF MARKET RESEARCH

1. Market research is a key factor to maintain competitiveness over competitors

2. It provides important information to identify and analyze the market need,
market size and competition
3. It is the systematic gathering and interpretation of information about
individuals or organization using statistical and analytical methods and
techniques. This will help in gaining insight or support decision making.

SIGNIFICANCE OF MARKETING RESEARCH IN BUSINESS

 It specifies the information required to address issues
 It is the best way to increase customer’s satisfaction, understand the
factors that affect your business and elevate your performance
 It is needed on a continual basis, in order to stay tuned to changing
market trends and to retain competitive edge in the business market
 It designs methods for collecting information
 It Manages and implements the data collection process
 It analyzes results and communicates the findings and their
implications

WHY MARKETING RESEARCH CANNOT BE IGNORED

The following are the reasons marketing research cannot be ignored:

1. It is useful for assessing the feasibility of a venture
2. It is useful for setting strategic direction
3. Useful for determining what customers really want
4. Useful for monitoring competitors
 5. For identifying opportunities. Understanding market research and
using it to advantage is vital in reaching out to target audience and
increasing sales
6. Guarantees the success of marketing campaigns, and in-turn sales
7. Spotting potential trouble ahead
8. Useful to develop business strategies

BENEFITS OF MARKETING RESEARCH

1. Marketing research leads to improved communications between the
company and its target customers through accurate understanding of customers’
needs and meeting them effectively, leading to enhanced customers’ satisfaction.
2. It minimizes risk through precise analysis of the customers’ exact demands
and developing perfectly matching products and services (thus reducing errors and
failures).
3. Useful for measuring business success through analysis of the research data
and evaluation of business progress and growth.

PROCESS OF MARKETING RESEARCH

The market research process involves a round of separate stages of data
interpretation, organization and collection. These stages could be considered as a
benchmark of market research, but it depends on an organization, how they have
encapsulated their strategies to follow this process.
Typical market research process is as depicted below; stage-wise:
Stage 1: formulating the marketing
Stage 2: determining who will do the research
Stage 3: picking out the appropriate methodology
Stage 4: research design
Stage 5: data collection process
Stage 6: data preparation, tabulation and analysis of results
Stage 7: the marketing research report.

CLASS OF MARKETING RESEARCH

Marketing research is often partitioned by target into two sets of categorical pairs:
1. Consumer marketing research: this is a form of applied sociology that
concentrates on understanding the preferences, attitudes, and behaviors of
consumers in a market-based economy; its aim is to understand the effects
and comparative success of marketing campaigns. The field of consumer
marketing research as a statistical science was pioneered by Arthur Nielsen
with the founding of the Acnielsen Company in 1923.
2. Business-to-business(B2B) marketing research: these are commerce
transactions between businesses, such as between a manufacturer and a
wholesaler, or between a wholesaler and a retailer. Contrasting terms are
business-to-consumer (B2C), and business-to-government(B2G)
The main difference between B2B and B2C is who the buyer of a product or
service is. The purchasing process is different in both cases and the
following is a list of key differences between them
1. Differentiation of brands
2. Buying behavior in B2B environment
3. Long decision making process in B2B
4. B2B always sought long term relationship.