INVESTIGATION INTO PROBLEMS AND PROSPECT OF SOLE PROPRIETORSHIP BUSINESS

TABLE OF CONTENTS
TITLE PAGE – – – – – – – – i
DECLARATION – – – – – – – ii
APPROVAL PAGE – – – – – – – iii
DEDICATION – – – – – – – iv
ACKNOWLEDGEMENT – – – – – – v
TABLE OF CONTENTS – – – – – – vi
ABSTRACT – – – – – – – – x

CHAPTER ONE
INTRODUCTION
1.1. BACKGROUND OF THE STUDY – – – – 1
1.2. STATEMENT OF THE PROBLEM – – – – 5
1.3. PURPOSE OF THE STUDY – – – – – 5
1.4. RESEARCH QUESTIONS – – – – – 6
1.5. SIGNIFICANCE OF THE STUDY – – – – 7
1.6. DELIMITATION/ SCOPE OF THE STUDY – – 8
1.7. DEFINITION OF OPERATIONAL – – – – 8

CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1. CONCEPT OF BUSINESS – – – – – 10
2.2. CONCEPT OF SOLE PROPRIETORSHIP BUSINESS – 12
2.3 TYPES OF SOLE PROPRIETORSHIP BUSINESS IN
NIGERIA – – – – – – – – 16
2.3.1 Other Forms of Sole Proprietorship – – – – 18
2.4 SOURCES OF CAPITAL OF A SOLE PROPRIETORSHIP
BUSINESS – – – – – – – – 20
2.5. CHARACTERISTICS OF SOLE PROPRIETORSHIP
BUSINESS – – – – – – – – 23
2.6. ADVANTAGES OF SOLE PROPRIETORSHIP
BUSINESS – – – – – – – – 25
2.7. PROBLEMS AND CHALLENGES OF SOLE
PROPRIETORSHIP BUSINESS – – – – 30
2.8. OVER COMING CHALLENGES OF SOLE PROPRIETORSHIP
BUSINESS – – – – – – – – 36
2.9. SUMMARY OF THE CHAPTER – – – – 38

CHAPTER THREE
METHODS AND PROCEDURE
3.0. INTRODUCTION – – – – – – 41
3.1. RESEARCH DESIGN – – – – – – 41
3.2. POPULATION AND SAMPLE – – – – 42
3.3. SAMPLING TECHNIQUE – – – – – 42
3.4. INSTRUMENT FOR DATA COLLECTION – – 43
3.5. METHODS OF DATA COLLECTION – – – 43
3.6. METHOD OF DATA ANALYSIS – – – – 43

CHAPTER FOUR
RESULTS AND DISCUSSION
4.0. INTRODUCTION – – – – – – – 45
4.1. ANALYSIS OF RESPONDENTS’ PERSONAL DATA
(SECTION A) – – – – – – – 45
4.2. ANALYSIS OF QUESTIONNAIRE ITEMS (SECTION B) 50
4.3. DISCUSSION OF FINDINGS – – – – – 67

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1. SUMMARY OF FINDINGS – – – – – 69
5.2. CONCLUSION – – – – – – – 70
5.3. RECOMMENDATIONS – – – – – 70
5.4. LIMITATION OF THE STUDY – – – – 71
5.5. SUGGESTIONS FOR FURTHER STUDIES – – 72
REFERENCES – – – – – – – 73
APPENDIXES – – – – – – – 77

ABSTRACT
This project was carried out to determine the problems and prospects of sole proprietorship business in Pankshin Local Government Area of Plateau State. The design used was the survey research design. The population of the study consisted of all the sole proprietors in the selected local government. The sample of the study was 119 sole proprietors. The findings of the study indicated that the death of the owner of a business can bring the business to an end which is one of the disadvantages of sole proprietorship, many sole proprietors do not have basic business education on running their business and this has a grave effect on the business entirely, bad business location can affect the expansion of the business, staff competition can collapse the business, mismanagement of funds can affect the running of the business, the family problems might affect the smooth running of the business, most sole proprietors do not keep proper records of their daily transactions, the business might fail because they operate them on part-time basis, sole proprietors sell goods on credit and it affects the running of the business, sole proprietors unknowingly buy fake goods, inadequate capital is a challenge of sole proprietorship, using business money to sole family problems will gravely affect the business. As a result of the findings, it was recommended that sole proprietors should utilize their funds properly or in an efficient and effective manner instead of mismanaging it, sole proprietors should endeavour to keep proper records of their transactions other than just selling and buying goods without knowledge of income or expenditure, suppliers should ensure that goods supplies are in good shape to avoid selling fake and bad goods to sole proprietors, sole proprietors should minimize sale of goods on credit to avoid incurring bad debts in order to run the business effectively, sole proprietors should try to separate as much as possible business property from personal items to avoid interference of family problems in the business.

CHAPTER ONE
INTRODUCTION
1.8. BACKGROUND OF THE STUDY
Sole proprietorship is the simplest form of business ownership. Not surprisingly, the vast majority of small businesses begin their existence as sole proprietorships. A sole proprietorship has but one owner. That sole owner may engage in any form of legal business activity anytime and anywhere. No legal formalities are required to start or operate the business. The owner is responsible for securing and investing the funds. These funds may come from the owner’s existing or borrowed financial resources (Bustner, 1993).
According to Nicks (2008), sole proprietorship started when people produced more products than they needed, as such, they had to exchange these surpluses. For example, if a farmer produced more rice, he will exchange with that which he had not. He had to locate who had what he needed in exchange for rice. According to him, by this way, producers came to realize that they could concentrate in their areas of production to produce more and they exchange with what they needed.
A typical Nigeria sole proprietor is a self made man/woman who might be said to have strong will to succeed; he/she might engage the services of other like friends, males, in-laws etc
Through this way, Nigerians in the olden day were engaged in sole proprietorship. Early sole proprietorship was characterized by production or manufacturing in which case the producer most often started with a small capital, most of it from his own savings. Early sole proprietorship started with trade by barter even before the advent of any form of money, (Nicks, 2008).
The spouse of a married sole proprietor works for the firm but is not classified as either a partner or an independent contractor, the business may still be considered to be a sole proprietorship and forgo having to submit a partnership income tax return (Davidson, 1991).
Modern sole proprietorship in Nigeria started with the coming of the colonial masters, who brought in their wares and made Nigerians their middlemen. In this way, modern sole proprietorship development in Nigeria is the value system brought about by formal education. For many decades, formal education has been the preserve of the privilege. With formal education people had the opportunity of being employed in the civil service, because in those days the economy was large enough to absorb into the prestigious occupation all Nigerians their goods. As such, the system made Nigeria to be dependent on the colonial masters (Nicks, 2008).
Most manufacturing businesses were of this type and even today despite the fact that large scale production has made it increasingly difficult for individuals to set up business for themselves, there are still a few people who succeed in doing so. According to Nicks (2008), the contrast between Nigerian and foreign sole proprietors during the colonial era was very detrimental. The competitive business strategy of the foreign sole proprietors was ruinous and against moral standards established by society. They did not adhere to the theory of “live and let’s live”. But, with more people being educated and the fact that government could no longer employ most school leavers, economic programs to encourage individuals to go into private business and be self reliant were initiated for example, graduate employment programs, open apprenticeship scheme, etc were established to assist sole proprietors in Nigeria.
According to Teptu (1995), as a sole proprietor you can develop business idea through observing the environment, discussing with colleagues from varied backgrounds, listening to experts and reading the work of great and successful men. Also, as you travel around , you may see new products and process which may suggest new projects or you may hear or read about shortages of product in other parts of the country and the recognize that these same products are readily available in your community and could give you a competitive advantage if you market them.
Ande (2005) sees sole proprietorship as a form of business enterprise owned, financed and managed by one person with the primary aim of maximizing profit. The sole proprietorship, also popularly referred to as one man business is the oldest and the common type of business organization. It is an unincorporated business and undertakes the risks and profits of the business alone.
Since the justification of the proprietorship is to help individuals to be jobs creators rather than job seekers, it will be counterproductive when such people or individuals continue to face or encounter problems that threaten their existence. If the objectives of a sole proprietor are to make a profit by controlling cost, managing time, limit risk, then question of numerous problems should be minimal in sole proprietorship.
Therefore, this research work focuses on the problems and prospects of sole proprietorship business in Pankshin Local Government area of Plateau state. The study will critically examine the problems and the prospects (if any) of sole proprietorship business in Pankshin Local Government Area
1.9. STATEMENT OF THE PROBLEM
When comparing sole proprietorship development in Nigeria with other countries like Japan, America, China etc. it is realized that these countries started on the same platform as Nigeria with trade by barter and the advanced to their present state of economic growth. Sole proprietorship is meant to help individuals to be job creasers rather than job seekers (Emezue 2012). But in Nigeria and Pankshin Local Government area in Plateau state sole proprietorship business seems to encounter problems. Therefore, the focus of this study is to find out the problem faced by sole proprietorship business in Pankshin Local government area of Plateau state as well as prospects with the view of making appropriate recommendations or suggestion for a way forward.
1.10. PURPOSE OF THE STUDY
The objectives of this research work are as follows:
a. To find out the common types of sole proprietorship business in Pankshin Local Government area.
b. To find out the general problems encountered by sole proprietors in Pankshin Local Government area
c. To examine any prospects for growth and development of sole proprietorship in Pankshin Local Government area.
d. To help develop a number of personal qualities in the sole proprietorship.
e. To make necessary or appropriate recommendations for a way forward.
1.11. RESEARCH QUESTIONS
To properly guide the researchers in undertaking this study, the following research questions and prospects.
i. What are the general problems of sole proprietorship business in Pankshin Local Government area of Plateau state?
ii. Can level of education of the owner affect the operation of sole proprietorship business?
iii. Does competition have any role to play in the operations of sole proprietorship business?
iv. Can location of the business affect the growth and expansion of sole business?
v. Can death of the owner affect the business?
vi. Can lack of division of labour affect the running of sole proprietorship business?
vii. Can mismanagement of capital affect the running of sole proprietorship business?
viii. Does inadequate record keep affect operation of sole proprietorship business?
1.12. SIGNIFICANCE OF THE STUDY
It is hoped that the outcome of this research work will be beneficial to the following:
a. The research work may be beneficial to intending sole proprietors as they can be challenged to start and operate their own business effectively and efficiently thereby maximizing their profit.
b. This research work will serve as a reference material or source of information to other students who would wish to carryout research on this topic elsewhere on the globe which they can criticize and amend the work for further studies.
c. The people of Pankshin local government area of Plateau state and the general public will benefit from this study in the sense that it will help highlight the problems of sole proprietorship businesses and the recommendation help to provide solutions to the problems.
d. The research work also provides information that lecturers, students and members of the public can utilize.
e. This work can also be useful to the government and financial institutions to see the need to encourage and promote sole proprietorship businesses.
1.13. DELIMITATION/ SCOPE OF THE STUDY
This study was carried out within Pankshin Local Government area of Plateau state. It was restricted to only Pankshin L.G.A as at the time of this study. The study was not intended to cover sole proprietors in other local government areas of Plateau state due to the fact that they are not resident in Pankshin L.G.A
1.14. DEFINITION OF OPERATIONAL
a. Sole proprietorship: This is the simplest form of business enterprise. It is a one-man business, so called because the capital is provided by one person who also take the risks and all the profits.
b. Problem: This refers to the difficulties encountered when setting the business e.g the sole proprietor may lack money to operate the business; this is a problem to him because he will find it difficult to raise the additional capital needed to a make the business grows and stabilize.
Wrong location is also a problem to the sole proprietor e.g locating a supermarket in a community with peasant population may offer low rental changes e.t.c.
c. Prospects: This means the chances that the businesses will prosper or the good things that will come that is the possible likelihood of future progress.
d. Investigation: The act of investigating, the process of inquiring into or following up; research, especially patient or thorough inquiry or examination.