SOURCES OF FINANCING BUSINESS ENTERPRISE IN NIGERIA
ABSTRACT
Finance as a necessary ingredient in any business enterprise, it is needed at all level of management for decision making of an establishment for investing and re-investing in an existing business. That is why this project is titled, “the sources of financing business enterprise in Nigeria”. Chi-square was used to test the hypothesis and it was discovered that finance is not the major cause of small business failure. We recommend there: that business owners should determine or ascertain the source of financing business, business owners should avoid unnecessary spending of business funds, business funds should be kept from personnel funds. Finally to take adequate inventory control major in their business.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
According to Omoankhanlen, Osagie and Ojeto (2015:1) business refers not only to honest and gainful employment but other useful and genuine efforts made towards earning a living. According to Omorokpe and Nomuoja (2010), “the word business is defined as the activities of buying and selling goods or providing services in order to make a profit”. According to Akraw (2011) defined business as an economic activity which is related with continuous and regular production and distribution of goods and services for satisfying needs and wants. Business finance is a term that encompasses a wide range of activities and disciplines revolving around the management of money and other valuable assets.
Business finance is an economic activity that helps commercial entities and non-profits organization for short term operating needs or long term investment decision.It is certain that business are set up for the purpose of making profit through the production of goods and rendering of services to meet the needs of their customer. These business ideas that are adequately financed. The goods produced and the services rendered by business enterprises are the direct output of the combination of the factors of production finance which is money, is a business current assets. It serves as capital that is combined with labour and land in the right production as inputs of business enterprises in production of goods and services 6o satisfy human wants. However, there are many opportunities in the business environment as a result of its dynamism. There may be opportunity to developed new product while new technology immediate existing product to take advantage of change in the world trade agreement to expand into new incuses. In all these it would result to nothing if there is no finance to carry it out his relation which would look at him as a wicked person and thus would cause problems in his family.
1.2 STATEMENT OF PROBLEM
In recent years, so many business organization which were set up by individual group of individuals including the government have experienced financial crises due to financial inadequacy and other factors for this reasons, due problem to be find out the sources of financing a business enterprises in Nigeria.
1.3 OBJECT OF THE STUDY
1. To determine the source of finance of business enterprise.
2. To determine how business enterprise lack finance which cause business failure.
3. To determine if borrowed money can be used to finance the business.
4.To determine if the sell of share can be used to finance the business.
1.4 RESEARCH QUESTION
1. How do business enterprise source for finance in Nigeria?
2. To what extent does lack of finance affect small business failure? 3. Is it advisable for business enterprise to borrow money in order to finance business in Nigeria?
4. Should the business enterprise sell share to finance the business.
1.5 RESEARCH HYPOTHESIS
1. Ho: There is no significant relationship between business enterprise and source of finance.
H1: There is a significant relationship between business enterprise and source of finance.
2. Ho: There is no significant relationship between lack of finance and small business enterprise failure.
H1: There is a significant relationship between lack of finance and business enterprise failure.
3. Ho: There is no significant relationship between sale of share and financing a business.
H1: There is a significant relationship between sale of share and financing a business.
1.6 SIGNIFICANCE OF THE STUDY
The usefulness of this research work cannot be over emphasized as it is meant for the direct consumption of all business, enterprise in Nigeria, whether small, large or medium scale enterprise. More so, potential entrepreneurs will use this project work as a handbook to know at a glance. The source of financing a business enterprises in Nigeria, it will also be useful to all students of business administration and other related courses.
1.7 SCOPE OF THE STUDY
This research work sought to examine the source of financing a business enterprise in Nigeria, Delta State.
1.8 LIMITATION OF THE STUDY
The difficulty in getting the comparative information require for further study from Eternit Limited Sapele. It is pertinent to note that not all manufacturing companies have poor management problems and sources of financing business and therefore, it is not likely that favourable response would be received from this type of organization, as contribution to the research work. Finally, financial constraints have always been a regular limiting factor in research work to student.
1.9 DEFINITION OF TERMS
BUSINESS ENTERPRISE: A business enterprise firm is a business unit firmed for the purpose of carrying on some kind of economic activities which involves goods and services.
FINANCE: Finance is that resource the entrepreneur put together and all other factors of production in place for effective economic activities for creating wealth. In other words, it is the bed rock of the enterprise.
PRODUCTION: Production can be define as a sequence of technical processes, requiring either directly or indirectly the mental and physical skill craftman. Production is a process developed to transform a set of inputs like men, materials, money machinery and energy into a specified set of output like finished product and service in desired quantity and quality in order to achieve the objectives and goals of the organization.
PROFIT: The surplus remaining after total cost are deducted from total revenue and the basis on such tax is computed and dividend is paid. It is the best known measure of success in an enterprise