FACTORS INFLUENCING ENTREPRENEURIAL SUCCESS AMONG BUILDING MATERIAL DEALERS IN PORT HARCOURT NIGERIA.
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FACTORS INFLUENCING ENTREPRENEURIAL SUCCESS AMONG BUILDING MATERIAL DEALERS IN PORT HARCOURT NIGERIA.
Entrepreneurial success makes all the difference to the rate of economic growth and development. Thus entrepreneurial competency and development becomes important in achieving the goals of all around development in the country. The success of any entrepreneur in achieving these personal and national is influenced by many factors. This paper attempts to find out the factors influencing entrepreneurial success among building material dealers in Port Harcourt. The research design utilized is the quasi-experimental research design. The simple random sampling technique was used to select 295 building materials dealers used in the study. Pearson Product Moment correlation coefficient was used to test the postulated hypotheses at 0.05 percent level of significance. The study revealed that the level of education, experience and initial capital investment have positive and significant relationship with entrepreneurial success. The study, however, revealed that geographical location of business has no positive and significant relationship with entrepreneurial success, more so level of education, years of experience and higher initial capital concludes that desirably needed by the entrepreneurs in order to operate successfully, it also noted that the entrepreneurs play important roles in the economic development of Nigeria by creating employment opportunities for citizenry thereby helping in unemployment and poverty eradication. It is recommended among others, that entrepreneurs should be purposeful and direction oriented in their business activities and should be considerate in their pricing method and that government should institute appropriate measure that could inject discipline and orderliness in the system to allow for effective and efficient business operation in the sector. Moreover that entrepreneurs need to integrate effective business strategies to effectively and efficiently operate their business.
TABLE OF CONTENTS
Title Page i
Table of Contents vii
1.1 Overview 1
1.2 Statement of the problem 6
1.3 Purpose of the study 8
1.4 Research questions 8
1.5 Research hypotheses 9
1.6 Significance of the study 10
1.7 Limitation of the study 11
1.8 Scope and organization of the study 11
1.9 Definition of terms 14
2.1 introduction 15
2.2 Who is an entrepreneur? 16
2.3 Entrepreneurial qualities 17
2.4 Business success of entrepreneurs 19
2.4.1 Experience and entrepreneurs success 20
2.4.2 Age and entrepreneurs success 21
2.4.3 Education level and entrepreneurs success 22
2.4.4 Insufficient capital and entrepreneurs success 24
2.5 Importance of entrepreneurs in economic development 26
2.6 Problems of Nigeria entrepreneurs 29
2.6.1 Competition 30
2.6.2 Lack of qualified manpower 31
2.6.3 Lack of facilitate for the development of manpower 32
2.6.4 Hostile environment and negative government policy 33
2.6.5 Lack of adequate capital/insufficient capital 34
2.7 Functions of entrepreneurs 35
2.8 Business failure and the entrepreneurs 36
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction 43
3.2 Research design 43
3.3 population of the study 43
3.4 sampling procedure/sample size determination 44
3.5 test of validity, reliability and questionnaire design 45
3.5.1 introduction 46
3.5.2 test of validity 47
3.6 data collection techniques 48
3.7 data analysis techniques 49
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction 51
4.2 Data presentation and analysis 51
4.3 Statistical testing of hypotheses 51
4.3.1 Introduction 56
4.3.2 testing of hypothesis I 66
4.3.3 testing of hypothesis II 66
4.3.4 Testing hypothesis III 67
4.3.5 testing of hypothesis IV 69
4.4 discussion of finding 70
4.4.1 introduction 71
4.4.2 the business strategies available to the entrepreneurs
for growth and the level of education of the entrepreneurs 71
4.4.3 the extent to which entrepreneurs utilize working experience
and effective business strategies in their services 72
CHAPTER FIVE: DISCUSSION, CONCLUSION, AND RECOMMENDATION
5.1 Introduction 77
5.2 discussion of findings 77
5.3 conclusion 79
5.4 Recommendation 81
Appendix A 85
Appendix B: questionnaire design 86
Appendix C: computation of (r) for testing for hypothesis I 91
Appendix D: Computation of (r) for testing of hypothesis II 93
Appendix E: computation of (r) for testing of hypothesis III 95
Appendix F: computation of (r) for testing of hypothesis IV 96
LIST OF TABLES
4.1 administration and collection of data (questionnaire) 52
4.2 size of the respondent entrepreneurs with respect to number
of employees 53
4.3 size of the firm with respect to volume of sales 54
4.4 sources of finance for the respondent entrepreneurs 55
4.5 respondents years of service as entrepreneur (working experience) 56
4.6 level of education/qualification of the entrepreneurs 57
4.7 factors determining the success of the studied entrepreneurs
4.8 factors describing the organizational objectives of the entrepreneurs 59
4.9 factors describing the service/survival coverage programme of entrepreneurs 60
4.10 The extent to which geographical location influence entrepreneurial success 61
4.11 the extent to which working experience influence entrepreneurial success 62
4.12 the state of agreement on whether initial capital investment affects the entrepreneurs success 63
4.13 the extent to which level education influences entrepreneurs
4.14 the extent to which entrepreneurs achieve success in their business operation 65
4.15 statistical testing of hypotheses I 66
4.16 significant relationship between working experience and
Entrepreneurs success 68
4.17 significant relationship between business location and entrepreneurs success 69
4.18 significant relationship between initial capital outlay and
entrepreneurs success 70
1.1 CONTEXT OF THE PROBLEM (OVERVIEW)
Across the globe, growing numbers of people are realizing their dreams of owning and operating their own businesses. Although the level of entrepreneurial activity is up from what it is few years ago, entrepreneurship continues to thrive in our nation. Every year, Nigerian entrepreneurs starts over one million businesses, and the level of interest in pursuing entrepreneurship as a career remain high among people in all age groups. Today the entrepreneurial spirit is the most significant economic development in recent business history. All over the world, the entrepreneurs are reshaping the business environment, creating a world in which their company’s important role is the innovate and health of the global economy. And have introduced innovative product and services, having pushed back technological frontiers, created new jobs, opened foreign market and have also provided their owners with the opportunity of do what they enjoy most.
Interest in entrepreneurship has never been higher than as it is today given that the past two decades have been record numbers of entrepreneurs launching business, even as the world largest companies and government establishment continue to engage in massive downsizing campaigns, dramatically cutting the number of managers and workers in their payrolls. This has spawned a new population of entrepreneurs: “layoff” or “discharge” from large business corporation and government establishment with solid management experience and many productive years left before retirement.
Colleges and universities have also discovered that entrepreneurship is an extremely popular course of study. Disillusioned with corporate business down sized job offering and less promising career paths, rapidly growing number of student now see owing a business as an attractive career option.
Nwachukwu (1990) noted that apart from the downsizing in large corporations and government establishments, there is also a problem of high rate of unemployment in Nigeria. As a result, people no longer see launching a business as being a risky career path. Most people no longer see launching a business as being a risky career path. Most people in Nigeria now see entrepreneurship as the ideal way to create their own job security and achieve long term success, having to control their own destinies instead of leaving it in the hand of organizations that can shatter their dream of long term job security with their regular layoff or retrenchment practices.
This high rate of unemployment and downsizing among large companies has created a more significant philosophic change. It has brought in an age in which “small is beautiful”. Today, with the pace of change of constantly accelerating, Zimmerer and Scarborough (20050 observed that small companies have the competitive advantage they can use modern technology to create within few week or months, products/services that once took years and all of the resources a giant corporation could muster. They can also dart into and out of niche market as they emerge and reduce, and can always move fast to exploit market opportunities.
Indeed, entrepreneurship often provides the only avenue for success to those who otherwise might have been denied of the opportunity. According to NFIB small business polices guide, National Federation of Independent Business (Washington, DC) 2003:16; 35 Percent of new business fails within two years, and 54 percent shutdown within four years. While 64 percent of new businesses, will have folded within six years. Another research by Nwachukwu in four eastern states of Nigeria, in (Nwachukwu 1990) showed high rate of mortality among the new businesses in Nigeria. According to him 53 percent fail in less 3 years, 24.5 of the reaming fail with 3 and 5 years. While only about 7.2 percent exist above ten years.
Although many entrepreneurs has continue to launch new businesses, the rate at which most of these ventures fail continue to pose questions that need urgent answers concerning factors responsible for the high rate of business failures. It may not be safe to say that entrepreneurs dealing in building materials in Port Harcourt seem to be succeeding in the face of all the potential environmental and economic problems in Nigeria.
The obvious truth is that among many entrepreneurs, too much emphasis has been increasingly placed on financial factor as the only factor influencing business success at the expense of non-financial factors which appear to be paramount just like financial factor. However, many current researches have highlighted the importance of non-financial factors to be important for business success.
Research conducted by Cunningham (in Meng and Liang, 1996) on 178 entrepreneurs and professional managers in Singapore showed that success is closely connected with individual traits (49%) education level (Bowel and Robert in Staw,1991; Hasweel et al, Wood in Zimmerer and Scarborough, 1998). But Kim (in Meng and Liang, 1997) found that experience had no effect on business success. Also, according to Staw (1991) age is not closely related to success in business.
However, if age implies entrepreneurs age (the length of time someone conduct business), there is a relationship between age and entrepreneurial success in Indonesia.
Personality trails are considered to be important also. The aforementioned individual traits are creatively and innovation. Holt (1992) underlines both traits as necessary condition to become a successful entrepreneur. Because innovation is a special means for entrepreneurs to reach success. Aruwa (2004:72) consider it as the necessary for an entrepreneur to innovative systematically or habitually. Creativity and innovation, according to Drucker, are not identical. However, creatively is antecedent to innovation. (Holt), 1992:32. According to Amabile (1989) creatively means the emergence of new ideas, while innovation means the applications of these ideas. Nwachukwu (1990) posit that need/desire for achievement, access to finance and level of initial investment could bring about entrepreneurial success.
Nwachukwu (1990:41) however stated that new invention, technical competency, love of business ownership etc, on their own will not hold an organization together. Avender and Raccuia (2001) noted that need for achievement is a strong predictor of success among entrepreneurs. Interestingly, they demonstrated a significant relationship between need for achievement and entrepreneurs’ success. Aruwa (2004) maintain that the success of an entrepreneur in establishing operating a business enterprise depend on personal attributes, knowledge, experience, resources at his disposal and factors in the business environment.
Entrepreneurship development and success has been considered as the crucial input for economic development of any country, and eh success and activities been identified as one of the man drivers of the nation’s economic development strategy. These entrepreneurial success and activities has in recent time, increasingly become the focuses of research. It is quite glaring that there has been significant number of studies on entrepreneurial success, yet, review of work done on entrepreneurial success reveal that there has been no significant effort to study the factors influencing the entrepreneurial success among building material dealers in Port Harcourt. To fill this gap, this present study aim to fill up this need by presenting a systematic study of factors influencing success among building material dealers in Port Harcourt and is likely to open further venues of probe in this regard.
1.2 STATEMENT OF THE PROBLEM
Although entrepreneurs especially those in same sectors are faced with similar or same external environmental constraints such as economic policy, socio-cultural, educational, technological and legal political factors. It is clear that while some entrepreneurs are succeeding and expanding their business others in majority continue to fold up, change business, merged or are acquired by other businesses. Research has shown that irrespective of the high mortality among newly created ventures, entrepreneurial spirits remain high and desire for success higher even in the midst of uncertainties and global economic meltdown. And with the rate of social development, and numerous government projects, and business activities going on within and around Port Harcourt, it becomes more relevant to consider the factors that influence entrepreneurial success among building material dealers considering the importance of their busies to the government, firms and individuals.
What then therefore, are the factors influencing entrepreneurial success among these building material dealers in Port Harcourt? What role could the entrepreneurs paly in the economic development of Nigeria? Is the global financial meltdown that has created uncertainty among the business world not impacting negatively on the perceive success among these entrepreneurs? This research will therefore critically examine or investigate those factors that has influence success among building material dealers in Port Harcourt, by using those variable that other researcher has use on other entrepreneurs in others sector in their research works.
1.3 PURPOSE OF THE STUDY
The study attempts to (1) identify a measure the extent to which variables like level of initial capital investment, experience, geographical location of business and level of education influence entrepreneurial success among building material dealers in Port Harcourt. (2) To use the brief analysis of entrepreneurial threats and problems identified by the sample respondents to help policy makers to plan intervention strategies as to create a more effective and efficient entrepreneurial climate in the country.
1.4 RESEARCH QUESTIONS
In the light of the problem stated above, the entire research will be carried out through a broad frame work of research questions. This will serve to guide the focus of the research in the proposed investigation.
Ø What are the management strategies available to entrepreneurs in their business operations?
Ø To what extent does the level of education of the entrepreneur impact on his business success?
Ø To what extent do entrepreneurs utilize effective management strategies in their business operations?
Ø To what extent does experience affected entrepreneurs success?
Ø What are the major roles of entrepreneurs in the development of Nigeria economy?
1.5 RESEARCH HYPOTHESES
In order to ascertain the validity and reliability consisting of this research work, some hypotheses, which are fundamental to this study, must be tested to provide empirical evidence. Hence, this study will test the following hypotheses:
H01: There is no significance relationship between the level of education and entrepreneurial success.
H02: There is no significance relationship between experience and entrepreneurial success.
H03: There is no significance relationship between geographical location of business and entrepreneurial success.
H04: There is no significant relationship between entrepreneurial success initial capital investments.
1.6 SIGNIFICANCE OF THE STUDY
This research work will be of immense contribution to the understanding of the factors responsible for the success of entrepreneurs. It will help the entrepreneurs to understand how their activities and development could bring about economic growth and stability of the nation. It is often said that entrepreneurial activities is the bedrock of any country’s economic development.
This study will aid the educational institution to have an understanding about those factors that enhances entrepreneurial success and thereby, help them to prepare their students for a successful entrepreneurial career life. Since a rapid number of students now see owing a business as an attractive career option. The result of this study could be used to help increase the roles and success of small scale entrepreneurs in boosting the Nigeria economy.
1.7 LIMITATION OF THE STUDY
The successful completion of this study was without some limitations. Time is major constraint to this study. It is a major constraint because this research was carried out simultaneously with other academic work and writing of examine leading to the award of B.Sc. Degree. The non-co-operating attitude of some business owners to release information about their business owners to release information about their business practices and success was another serious problem. These entrepreneurs feared that their business secrets will get into the hands of their competitors. It was also difficult to get them understand the academic nature of the study. However, enough efforts were made to ensure that the desired information was obtained from these respondents.
Finally, finance was another great constraint. It is well known that research work of this nature cannot be carried out successfully, without involving huge among of money. As this is needed for transportation, and sourcing of information from books, journals, articles, and printing and distribution of questionnaire.
1.8 DEFINITION OF TERMS
Building Material Dealers: Traders/merchants who buys and sells material used for house building and other construction works. Particularly, iron and steel material and PVC material.
Successful Entrepreneur: One who has doubled his turnover and/or assets since the inception of his business, notwithstanding his business or initial capital investment? Or enterprise who has achieves his objectives of starting up a business.
Entrepreneur: A person or groups who have business idea (s) and gather the necessary resources and take appropriate actions to achieve in the business.
Entrepreneurship: Aruwa, (2004) define this as the willingness and an ability of an individual to seek for investment opportunities, to establish and run enterprises successful.
1.9 SCOPE AND ORGANIZATION OF THE STUDY
The scope of this study is the total study coverage of this research work. This coves three areas:
i) Geographical/survey scope
ii) Content scope
iii) The study unit scope
i. Geographical/Survey Scope: Some constraints as observed have necessitated the scaling down of this research to only entrepreneurs dealing on building material in Port Harcourt alone. The being the case, the researcher would concentrate his attention in selected entrepreneurs within the area of understudy and his would be used for generalization of the entire building materials dealers in Port Harcourt.
ii. The content/theoretical scope of the study is Entrepreneurial Development.
iii. The study scope of this work is the level of analysis coveted. And the level of analysis is the entire building material dealers otherwise, referred to as entrepreneurs in this research works.
THE ORGANIZATION OF THE STUDY
This study is organize into five chapter: Chapter one deals with the context of the problem (overview), statement of the problem, purpose of the study, research questions, research hypotheses, significance of the study, limitations of the study, definition of terms and the scope and organization of the study.
Chapter two deal with the review of related and relevant literature. Chapter three attempt to describe the research design, sampling procedure/sample size determination, test of validity and reliability, data collection method, operational measure of variables, and data analysis technique.
Chapter four deal with presentation and analysis of data.
Chapter five presents the discussion, recommendation and conclusion of the research findings and direction for further research.