Home Project-material THE INFLUENCE OF FEASIBILITY STUDY ON THE SURVIVAL OF ENTREPRENEURSHIP ENTERPRISES IN AWKA SOUTH LOCAL GOVERNMENT AREA, ANAMBRA STATE

THE INFLUENCE OF FEASIBILITY STUDY ON THE SURVIVAL OF ENTREPRENEURSHIP ENTERPRISES IN AWKA SOUTH LOCAL GOVERNMENT AREA, ANAMBRA STATE

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Abstract

The study explored the influence of feasibility study on the survival of entrepreneurship enterprises in Awka South LGA. Specifically the study examined the influence of marketing feasibility study on the survival of entrepreneurship enterprises; ascertained the influence of economic feasibility study on the survival of entrepreneurship enterprises; identified the relationship between technological feasibility studies on the survival of entrepreneurship enterprises in Awka South LGA, Anambra State. The study anchored on Cost–benefit analysis theory. Survey design was adopted and a purposive sampling technique employed to select 70 owners of entrepreneurship enterprises out of the population of 215 registered entrepreneurship enterprises registered with Awka Local Government Council. The influence of Feasibility Study and Survival of Entrepreneurship Enterprises Questionnaire were used to collect data from the field. The researchers personally administered and collecte

CHAPTER ONE

                                               INTRODUCTION                          

1.0          Introduction                                                                                                                    Hardly can any entrepreneurship business succeed without good planning. To sustained competitive operation, organizations must always anchor on a continuous renewal of the organization’s structure and capabilities to serve the ever-changing needs of the internal and external customers (Moran and Brightman, 2016). Entrepreneurship business being predominantly owner-managed is not an exception to operation in the ever-changing environment, where clarity of purpose and continuity must be well planned out (Burnes, 2014).  This clarity of organizational purpose is ably reflected in the vision and mission of such establishments, characterized by elaborate clear planning and involvement of all the relevant stakeholders in their formation.

1.1     Background of the Study                                                                          Entrepreneurship enterprises have been seen as a catalyst for economic growth and development in developed and in developing countries. As observed by Cook and Nixson (2001), Kuteyi (2013), Eze and Opara (2015) and Ifeanyi, Onwuchekwa and Onwuchekwa (2017) the development of entrepreneurship enterprises are seen as attempts towards the achievement of a wider economic and socio-economic objectives, including poverty alleviation, employment generation and improvement of Gross Domestic Product (GDP). It does not need to doubt whether entrepreneurship businesses have the potency of improving a nation’s economy since it is a wider sector that is expected to house 85% work force of a nation (Ifeanyi, Onwuchekwa and Onwuchekwa, 2017). There is also expectation that human resources develop as entrepreneurship businesses improve due to technology employed in the sector.                                                  Federal government knowing that it has not been economically easy with Nigeria had launched many policies and programmes to accelerate entrepreneurship business development. Among the policies and programmes are; Small and Medium Enterprises Development Agencies of Nigeria (SMEDAN), National Economic Reconstruction Funds (NERFUND), National Economic Poverty Eradication Programme (NAPEP), National Economic and Empowerment Development Strategy (NEEDS), Small and Medium Industry Equities Investment Scheme (SM IEIS). Despite the huge amounts spent on the development of these policies for entrepreneurship growth and development, Sagagi (2006) and Muritala, Awolaja and Bako (2012) noted that not much changes and improvement have been achieved. In tracing the reasons why all these government policies and programmes for improvement of entrepreneurship enterprises have not been effective, Opafunso and Adepoju (2014) assert that huge entrepreneurship business problems could be traced to the government. This is mostly in the area of improper implementation of its policies towards entrepreneurship businesses and a serious neglect in the area of incentive and infrastructural development to facilitate business activities of entrepreneurship businesses (Opafunso and Adepoju, 2014).                              The beginning of harsh government policies toward entrepreneurship businesses could be traced back to 1982 with the introduction of Stability Measures, which resulted to import controls and drastic budget cuts. These in turn, adversely affected the subvention to the financial institutions established to provide financial assistance to the entrepreneurship businesses (Opafunso and Adepoju, 2014). For example, in 1983, out of a total of 8,380 application for loans received from entrepreneurship businesses, a total of 46.66 million naira was disbursed (Opafunso and Adepoju, 2014). The frequent changes and sometimes conflicting government monitory policies, have also tended to hurt the entrepreneurship businesses (Opafunso and Adepoju, 2014). For example, while the government increased total credit allocation to entrepreneurship businesses from 16 to 20 percent, the same government removed excess liquidity in the banking industry through increase in the Minimum Rediscount Rate (MRR), transfer of government and parastatals accounts to the central bank and the creation of Stabilization Security Account (SSA) whereby the banks were debited with excess liquidity in their accounts with central bank (Opafunso and Adepoju, 2014).             The biggest shortfall of government is the misappropriation of funds and wrong allocation of credit facilities. Obi (2001) and Opafunso and Adepoju (2014) pointed out seriously that the plan to provide modest loan to small scale business operations was a flop, because loans were granted in most cases to politicians rather than to the real entrepreneurs. What was supposed to be revolving fund designed to benefit so many entrepreneurship business owners ended up as a bonanza for a few criminal minded politicians and it became virtually impossible to recover most of the loans.

In the recent times, a dextrous challenge of entrepreneurship business is attributed to poor feasibility study by the entrepreneurship business owner managers. Ekpenyoung and Nyong (1992) and Akinsanya, Oluwafemi, Alidu and Wale (2015) 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. Therefore, feasibility study becomes a veritable strand for survival of entrepreneurship businesses. It has a capacity of attracting investors mainly loan providers and business partners. No investor is Father Christmas. Investors come in when doubt on practicability and viability of any project is cleared. In any winning project proposal, feasibility study becomes a paramount because; it gives bit-by-bit cost-benefits analysis of any project. Feasibility study is expected to cover marketing, economic, and technological analysis.                                      Absence of feasibility study has resulted to business failure. Without a good feasibility study, a business project appears like a boat without a rudder till it capsizes. That is business failure. Many empirical researches like Akinsanya, Oluwafemi, Alidu and Wale (2015) and Mohammed have come up to address the problems in Feasibility study. Their researches appeared shallow and lack empirical proves in absolute terms.                             Therefore, this study seeks to examine how market feasibility, economic feasibility and technological feasibility influence survival of entrepreneurship businesses respectively in Awka South LGA, Anambra state.



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