We will be discussing the 10 roles of small scale businesses in Nigeria. There has been a lot of universal discussion regarding the importance of small firms in economic development, all around the world, especially in Nigeria. These small scale businesses sometimes form the fast moving small businesses or the daily income businesses for the citizens in Nigeria.
Although many economists argue that giant firms offer modernism to society and those small businesses are not the backbone of the economy. The value of small businesses to the economy is clear and extends beyond their immediate contribution to revenues.
Let us explore them.
10 Roles of Small Scale Business in Nigeria
The 10 roles of small scale businesses in Nigeria include growth and other things and of course, cannot be overstated. In the aspect of employment, growth, development, and the marketing of goods and services, small businesses have made a significant contribution to Nigeria’s development.
- Food security
- Manufacturing of daily commodities
- Job Creation
- Youth engagement and development
- Nigeria’s technical capacity and improvement
- Goods and services marketing
- Taking a small enterprise and turning it into a huge corporation
- Generating money for local government through taxes paid
- Adapting to changing conditions and developing the local economy
- Autonomy and independence
1. Food Security
Food security is one of the 10 roles of small scale businesses in Nigeria. Small enterprises in the agricultural sector have contributed significantly to food security. In Nigeria, the majority of crop growers and seasonal farmers engaging in seasonal farming are tiny. Animal farmers are typically small enterprises because they run their poultry business, fish farming business, pig farms, and cattle ranches on a modest scale, with the majority of them employing less than ten people. These are the men and women in charge of the large majority of the food, poultry, and meat served on Nigerian tables.
2. Manufacturing of Daily Need Commodities
Small-scale enterprises play a significant part in the transformation of agriculture-based economies to industrial economies. Small-scale businesses are also critical in absorbing agricultural by-products and converting them into valuable commodities that would otherwise be bought from overseas.
Commodities such as soap, which employs palm kernel oil as a key manufacturing ingredient, footwear made from locally farmed rubber and leather, and other essential items for people’s needs are all made locally with locally available ingredients.
3. Job Creation
Job creation is one of the 10 roles of small scale businesses in Nigeria. Small-scale businesses generate work for the burgeoning population. This is true in most rich and emerging economies, not just Nigeria. small businesses like food supply businesses, frozen fish and chicken businesses, and hair extension businesses have helped so much with employing some people in the country.
It is self-evident that the government alone cannot employ everyone. Small businesses employ a greater proportion of the workers in Nigeria.
4. Youth Engagement and Development
Small businesses, while they may not pay as well as the government or huge corporations, play an important role in the country’s existence that goes beyond providing money and allowing individuals to feed their families.
They engage the country’s youth. Small-scale businesses involve young people, keeping them off the streets and away from crime, gangsterism, prostitution, and other vices.
Furthermore, small businesses engage young people in the workplace, teaching them important skills that will help them succeed in life, such as how to interact with coworkers, how to create and accomplish goals, how to advertise products and services, and so on.
5. Nigeria’s Technical Capacity Improvement
Small businesses have done and continue to do a lot for Nigeria in terms of increasing the country’s technical capabilities. So far, small engineering enterprises have contributed more to the engineering field than any school institution or government program.
Auto mechanics have contributed significantly to the acquisition of technical skills and the transmission of these abilities to the younger generation in order to ensure that we stay self-sufficient in technical ability today and in the future.
Thanks to small scale businesses that have entered the oil servicing sector of the economy, technical expertise in pipeline installation and maintenance has lately increased.
6. Goods and Service Marketing
Another item on the list of the 10 roles of small scale businesses in Nigeria is the Goods and service marketing aspect. A small firm can relate to the average person better than anyone else. Small firms, because of their size, transparency, and trustworthiness, are better at introducing, marketing, or promoting new goods and services to the public, as well as retaining clients.
Many times, these small businesses work with larger manufacturing corporations, functioning as distributors for them and therefore playing an important role in their value chain, assisting in the distribution of their products to the public.
7. Taking a Small Enterprise and Turning It Into a Huge Corporation
Small businesses aren’t always small businesses. Large firms, such as Dangote Group, Globacom, BOA began as modest businesses and have now grown to become major participants in the national and international marketplace. Many computer establishments like stalwarts began as “tinkerers,” developing devices by hand in their garages.
Microsoft and Amazon are good examples of how a tiny business idea can have a huge impact on the globe. Small firms which grow into huge corporations more often than not stay in the communities where they began.
Having a large organization headquartered in a community can assist in supplying additional jobs and improve the local economy, as well as provide a market that encourages the growth of new small enterprises.
8. Generating money for Local government through taxes paid
Customers who buy at small businesses in their neighborhood are effectively giving money back to their community. These small businesses have formed the practical high paying side hustle business for citizens in Nigeria. A profitable local business generates a lot of revenue, which means it pays more taxes, including local property taxes.
This money is then used by local leaders, as well as to develop government schools. A strong small business can also raise property values across a neighborhood, benefiting all homeowners while increasing property taxes for local governments.
9. Adapting to changing conditions and developing local economies
Many small enterprises are also very much able to quickly respond to and get used to changing economic conditions. This is due to the very fact that small establishments are usually customer-focused and aware of community requirements.
In spite of the economic downturn, many local customers choose to stay loyal to their favorite small establishments. Now, because of this loyalty, small firms are more likely to stay afloat during difficult times, which helps to develop local economies.
Small firms also generate less revenue than larger corporations, which means they have less to lose in a downturn.
10. Autonomy and Independence
Independence and autonomy are one of the 10 roles of small scale business in Nigeria. A chain restaurant in the west will be almost identical to a version of the same restaurant in the East, and a pharmacy with locations across the country will reflect the same values, whether it focuses on convenient delivery of pharmaceuticals or processed convenience foods, regardless of where it is located. It is the same.
Hence, this can make each state in the country be self-independent and produce on their own.
What Are Small Scale Businesses?
A small scale business is a form of business that can be started with little or no money and can be run as a sole proprietorship, partnership, private or public limited company. It is also known as a Small and Medium Enterprise (SME), and it has a lot of potential to help our country’s industrial transformation and progress.
Small scale industries make up a large percentage of all registered companies in Nigeria, and they have been around for a long time, including agricultural sectors as well, showing that the ground is still fertile for even more small scale enterprises to spring up and contribute to Nigeria’s development. Read along as we discuss the 10 roles of small scale businesses in Nigeria.
15 Examples and ideas of Small Scale Industries in Nigeria
We cannot talk about the 10 roles of small scale businesses in Nigeria without listing the examples. They include:
- Poultry farming
- Bakeries
- Candle business
- Logistics Business
- School stationeries
- Water bottles
- Leather belt
- Fish Farming
- Small toys
- Paper Bags
- SEO Content Writing Agency
- Printing
- T-shirt Printing
- Photography
- Makeup artist business
Classifications of Small Scale Business in Nigeria
Small-scale businesses in Nigeria can be classified into a variety of industries, including:
- Services
- Manufacturing
- Processing
- Education, and so on.
Nigeria has benefited from these small scale firms, which have helped us develop, reduce poverty, and create wealth, allowing us to become independent and self-sufficient. They have also been shown to cut unemployment in every place where they have been promoted.
6 Characteristics of Small Scale Businesses
1. Ownership
The majority of these units are owned by a single person. As a result, it is either a sole proprietorship or a partnership.
2. Management
In most cases, the owner/owners are in charge of both management and control. As a result, the owner is actively involved in the day-to-day operations of the company.
3. Only a small area of influence
Small-scale businesses have a limited operating area. As a result, they are able to meet local and regional demand.
4. A time-consuming task
For their industrial activities, these small scale companies typically rely on labour and personnel. As a result, their reliance on technology is quite low.
5. Flexibility
These units are more flexible in their response to changing business conditions. So, in the event of unanticipated changes or developments, they are adaptable enough to keep going. This is an advantage that large industries do not have.
6. Resources
They make use of local and readily available resources. This also aids the economy with better utilization of natural resources and wastage becomes limited.
8 Challenges Small Scale Businesses face in Nigeria
Small firms are frequently confronted with issues that are unique to them. The following are some of the obstacles that have stifled their progress:
- High-interest rates and credit facility maintenance fees, as well as demands for properly reported collateral responsibilities
- All levels of government have inconsistent rules and bureaucratic bottlenecks when it comes to administering incentives and support facilities.
- There are multiple taxes levied by both the state and local governments.
- Poor infrastructure, such as a lack of electricity, bad roads, and inefficient transport systems.
- Raw resources aren’t readily available in most areas.
- The expense of acquiring machinery is really high.
- Liberalization of imports.
- There are also the challenges of export restrictions.
6 Solutions to the Problems faced by Small Scale Businesses in Nigeria
- Infrastructure, such as good road networks, appropriate power supply, good communication, and a health-care system, must be provided.
- They should look at the various exorbitant taxation systems imposed on them.
- Startups that show initiative by obtaining local raw materials should be eligible for tax breaks and rebates.
- Provision of easily accessible and reasonably priced financing.
- Government agencies such as SMEDAN should provide effective marketing and distribution platforms for SMEs.
- Loan availability and repaying arrangements that are workable.
Frequently Asked Questions on the 10 Roles of small scale Businesses in Nigeria
Problems of Small Scale Business in Nigeria
The following are the issues that Nigerian small company owners face:
- A lack of funds for launching and growing a firm,
- A lack of infrastructure
- Unsuitable laws
- Competition
- A lack of management abilities
- Corruption and inflation are two other issues.
How do businesses contribute to the economy?
Small businesses help local economies grow by providing growth and innovation to the community where they are located.
Small firms or establishments also join hands in economic progress when they employ persons who could otherwise be unemployed by larger corporations. They contribute to the country’s economy as well as economic activity.
What are the 3 key ways small businesses contribute to the economy?
Small businesses contribute to our country in three areas in particular.
- They allow people to achieve financial freedom
- Promote innovation and
- Creation of jobs.
What Small Businesses Can I do in Nigeria?
Have you ever wondered why you see lots of people making money and starting up a small business in Nigeria but you never seem to find the right one that works for you? You are not alone.
You can start by doing what you enjoy or venturing into your passion. Give it your time and see it grow in no time. These businesses may include:
- Starting as a freelance writer if you have a passion for writing
- Dropshipping
- Starting a cybercafe firm
- Starting a printing and graphic design shop, e.t.c
Other searches:
World Bank Grant for small businesses in Nigeria
How to make money with Affiliate Marketing
Conclusion
Small enterprises are an important aspect of every country’s economy, but in Nigeria, they are especially important as a source of revenue. There are immediate actions that must be followed if Nigeria is to maintain its upward trending status in the global economy.
