FACTORS THAT APPEAR TO LEAD TO THE FAILURE OF SMALL-SCALE ORGANIZATION IN ENUGU NORTH L.G.A OF ENUGU STATE.

Abstract

This study analyzed the factors that appear to lead to the failure of small-scale organization in Enugu North L.G.A of Enugu State. The study used exploratory, descriptive survey. The population for the study comprised of 335 staff of two groups of respondents. These were 241 small scale organisations of 33 registered small-scale enterprises in Enugu North Government Area, and 94 staff of six banks in the Local Government Area (three Commercial Banks, and three Microfinance Banks). Due to large number of small-scale enterprises in the Local Government Area, only 54 of them were randomly selected using purposive sampling. The instrument for data collection was a structured questionnaire. Three experts in the area of measurement and evaluation, banking and entrepreneurship education validated the instrument. In ensuring the reliability of the instrument, a test-retest approach was adopted using Pearson Product Moment Correlation Coefficient and reliability co-efficient of 0.853 was obtained which guaranteed its reliability. Data collected were analyzed using mean. Results however indicated that the most common causes of business failure were lack of knowledge regarding relevant legal matters lack of funding and general lack of business acumen. It identified factors that generally seem to lead to the demise and failure of small scale businesses in Enugu North L.G.A of Enugu State. The study recommends that government should improve the effectiveness of its support mechanisms and that record keeping and each flow management training is critical for SMEs. These recommendations if properly applied will ensure small-businesses’ success in Enugu North local Government Area and the rest of Enugu State.