Two hundred and forty three entrepreneurs in Lagos, the former
capital city of Nigeria were surveyed. Results show that 69% of
respondents are male and 31% female. The average age of entrepreneurs is
36.7. The time devoted to their businesses is approximately 37.8 hours
per week. When asked to indicate the reasons for becoming business
owners, Nigerian entrepreneurs suggested independence, satisfaction and
growth, increasing income and past training/experiences as important
motivators. Factors contributing to business success were mainly
attributed to hard work, excellent management skills, and good customer
services. Charisma and reputation for honesty were also ranked high on
the list. Among the problems encountered by entrepreneurs, unreliable
employees was the most critical. Weak economy, electricity shortages and
unsafe location were also mentioned as obstacles preventing
entrepreneurs from achieving their goals. The relationship between
stress and business ownership were also assessed. In spite of business
success attained and family support received, entrepreneurs reported
that they did experience business-related stress.
Key Words: Entrepreneurship, Success, Motivation, Problems, Stress,
Nigerian Entrepreneurs, Micro and Small Enterprises
Micro and small enterprises (MSEs) are the leading force in the
development of African economies. They are essential for economic growth
in many developing countries. Entrepreneurial activities such as
innovation, risk bearing, employment creation, finding new opportunities
and the commercialization of their inventions have been contributed to
the prosperity in all regions of the world (Schumpeter, 1950; Ukaegbu,
2000). In Europe, the private sector employs 60 percent of the workforce
(Wintermantel, 1999). Japan, for example, has six million small-and
medium-sized enterprises (SMEs) which account for 99.7 percent of all
businesses in the country, and 70 percent of the total labor force
(METI, 2007). In Taiwan, 96 percent of all small firms are SMEs
employing 78 percent of the nation's work force (Lin, 1988).
Results of a study conducted by Lee (1998) indicate that South Korean
SMEs provide more than 70 percent of all jobs in the country.
MSEs are making significant contributions to Africa's economic
growth. Ghanaian micro-enterprises which employ less than 5 people,
accounted for 70 percent of country's workforce (Government of
Ghana, 2303; World Bank, 2006). In 2003 Kenya's private sector
employed 3.2 million people and contributed 18 percent to the
nation's GDP (OECD, 2005). The impact of small businesses on the
Nigerian economy is difficult to accurately measure, but it is believed
to be highly dynamic and significant. It has been estimated that between
45 and 60 percent of the urban labor force work for private enterprises
(Nwaka, 2005). Ariyo (2005) suggested that the Nigerian private sector
provides 50 percent of the country's employment and 50 percent of
its industrial output.
Because of the importance of entrepreneurship to the growth of an
economy, this study intends to uncover some problems faced by Nigerian
entrepreneurs, their motivation for business ownership, and the factors
contributing to their success. Correlations between business success and
family support to job related stress are also examined. Results from
this study hopefully can provide some helpful information to policy
decision makers in creating an environment conducive to the development
of the private sector.
Literature relevant to Nigerian entrepreneurship is limited. It is
necessary to rely on studies of small businesses in other countries to
have a more complete understanding of the motivations, perceived success
factors and problems encountered by small business owners in Nigeria.
2.1 Motivation for Business Ownership
Motivations for business ownership exist in different forms and
types, but the following are most often cited. Kuratko, Hornsby and
Naffziger (1997) and Robichaud, McGraw and Roger (2001) indicate that
motivations can be grouped into four categories: 1) extrinsic rewards;
2) independence/autonomy; 3) intrinsic rewards; and 4) family security.
Extrinsic rewards are the economic reasons that entrepreneurs work,
while intrinsic motives are related to self-fulfillment and growth.
Because Kuratko et al. and Robichaud et al. focused on the relationship
between motivation and business success, they did not indicate which
were the strongest motivations encouraging individuals to become a
Surveys conducted among entrepreneurs in developing countries
provided some interesting information. In their study of Vietnamese
small business owners, Swierczek and Ha (2003) found that challenge and
achievement are more significant and more important motivators than are
necessity and security. Results suggest the existence of an
entrepreneurial orientation and a new emerging culture in Vietnam that
includes greater risk-taking and forward thinking. A study of motivation
by Benzing, Chu & Callanan (2005) discovered some economic
discrepancies among regions of Vietnam. It was found that entrepreneurs
in Ho Chi Minh City were motivated by personal satisfaction and growth,
while business owners in Hanoi cited the need to create jobs for
themselves and family members. Compared to Hanoi, Ho Chi Minh City is
more prosperous. The economic landscape in the Southern part of Vietnam
is brighter, which affords people the opportunity to pursue higher
levels of need such as "personal satisfaction and growth". In
Romania, income needs are significantly stronger motivators than
self-satisfaction and personal needs. The two strongest motivators are
to increase income and to obtain job security (Benzing, Chu & Szabo,
2005). In their study of entrepreneurship in China, Pistrui et al.
(2001) reported that personal and family security were the primary
motives for people to start a business.
On the other hand, Mann and Thorpe (1998) suggested that Asian
entrepreneurs in general indicate "making more money" as the
most important force leading them to become business owners. White
entrepreneurs, however, were motivated by a desire for independence via
business ownership. Ugandan entrepreneurs reported that "making a
living" or "making money" is the most important reason
for starting a business (Bewayo, 1995). Findings from the study also
showed that a majority of entrepreneurs (61%) preferred business
ownership over working for a corporation, because of autonomy, freedom,
and independence (Bewayo, 1995).
A survey conducted among new business start-ups in 11 countries
found six reasons motivating people to become entrepreneurs. They
include the need for approval, the perceived wealth, the degree of
communitarianism, the need for personal development, the need for
independence, and the need for escape (Scheinberg & Macmillan,
1988). These findings indicate that business owners in different
countries have different motives for business ownership. American
entrepreneurs considered need for independence the most important reason
for starting a business. Italian business owners, however, ranked
communitarianism first on the list. In Australia and Great Britain,
entrepreneurs cited money as the reason for becoming business owners,
while the Scandinavians rated this factor the least significant
Asked to indicate the reasons for business ownership, Nigerian
entrepreneurs ranked monetary rewards and profits as the most important.
Assertiveness and personal liberty were also frequently mentioned. Being
accountable only to oneself was cited as one of the cherished factors
for starting a business (Akande,1994). Results from a survey of Nigerian
women entrepreneurs showed that their main reasons for engaging in
business is to reduce poverty and to reverse the deteriorating economic
conditions (Woldie & Adersua, 2004). Although rich in natural
resources, the majority of Nigeria's population has become poorer.
A study of Nigeria by the Centre for the Study of African Economies at
Oxford University indicated that per capita gross domestic product (GDP)
fell from US $1,215 in the year of 1980 to US $706 in 2000 (Mbeki,
2005). Another study showed that the number of Nigerians living below
the poverty line went up from 19 million in 1970 to 90 million in 2000,
while the income gap rapidly expanded. It was reported that in 1970 the
top 2 percent of the population earned the same income as the bottom 17
percent. But by 2000, the income of top 2 percent was equal to that of
the bottom 55 percent (Birdsall & Subramanian, 2004).
Results from previous studies indicate a strong link between
entrepreneurship and economic development. The findings further suggest
an urgent need for Nigerian policy makers to undertake more positive
steps to encourage enterprise establishment. Results of this changing
policy would be a reduction of the gap between the rich and the poor
which would lead to a more prosperous and stable Nigeria.
2.2 Business Success Factors
Factors contributing to business success are varied, but a few sets
of factors seem to be more commonly agreed upon by researchers. These
factors may be grouped into the following categories: 1) the
psychological and behavioral traits of entrepreneurs, 2) the managerial
skills and training of entrepreneurs, and 3) the external environment.
This study concentrates on the managerial skills, training, and the
external environmental conditions that promote business success. These
factors are selected because they are more easily affected by
In his study of South Pacific entrepreneurs, Yusuf (1995) found
that the most critical factors contributing to business success consist
of good management skills, access to financing, personal qualities, and
satisfactory government support. Jamaican business owners consider the
marketing factor the most critical ingredient for the success of a
business (Huck and McEwen, 1991). From the results of a study among 25
Kenyan entrepreneurs, Neshamba (2000) indicated that the
owner-manager's previous experience and skills acquired on the job
are important factors to business success and growth. Other critical
factors include knowing the market and understanding the needs of
customers, access to capital, assistance from family members, and
networking with friends from former schools and colleges. Finally, hard
work, as evidenced by long working hours contributes to the success of
entrepreneurs. In another study of Kenyan entrepreneurs, Pratt (2001)
found that the availability of capital, possession of business skills,
previous experience, and support of family members are essential for
Findings from a study of Nigerian women business owners showed that
a high self-concept regarding their role in business and a commitment to
business can help women to become more successful entrepreneurs (Ehigie
& Umoren, 2003). The report further indicated that entrepreneurial
success depends on psychological factors such as self-concept,
managerial competence, work-stress and business commitment. Self-concept
is defined as those ideas the individual has of himself or herself that
he or she learned in relationship with others (Sabin, 1954). As a
result, if one's self-concept is positive, he/she tends to act and
perceive the world positively. If it is negative, he/she will feel
dissatisfied and unhappy. Rogers (1980) and Ross & Lyle (1978)
suggested that women can be successful in any venture if they have a
positive frame of mind. Marshall (1998) took a step further when
postulating that females who have a high self-concept of themselves and
believe in their capabilities can accomplish any task. Other factors
such as access to adequate education, training and finance are believed
to be critical for Nigerian women to be successful (Kitching &
Woldie, 2004). Finally the role of extended family in providing capital
for new firms and facilitating the apprentice training of its members is
important to the success of prospective entrepreneurs (Nafziger,1969).
Understanding conditions required for successful entrepreneurs,
Nigerian policymakers may be able to provide them with appropriate tools
to allow them more success in their business ventures.
2.3. Problems Encountered
The challenges faced by entrepreneurs in developing countries are
monumental and quite similar. Commonly found among these is the unstable
and highly bureaucratic business environment. The laws governing private
enterprise, especially business registration and taxation systems, are
believed to be overly complex and difficult to understand. Contract and
private property laws are often poorly designed and/or enforced. As
suggested by Kiggundu (2002), Pope (2001), and Stevenson (1998) the
unfavorable institutional/regulatory environment is often accompanied by
the added expenses of corruption and bribery. Other problems encountered
by entrepreneurs in transition economies include poor macroeconomic
policies, limited access to short-term and long term financial capital,
and a lack of managerial experience.
Results from a survey of more than 3600 entrepreneurs in 69
countries (Kisunko, Brunetti & Weder, 1999) showed that the most
critical problems faced by business owners in South Asia and Southeast
Asia were the high taxes and tax regulations. Inadequate infrastructure,
inflation, labor regulations, and regulations governing the starting and
running a business were also considered obstacles preventing
entrepreneurs from achieving their goals. In the Middle East and North
Africa, lack of infrastructure was the most important obstacle to doing
business. Corruption, high taxes, tax regulations and financing were
closely followed behind. Ranked high among problems faced by
entrepreneurs in Central and Eastern Europe were high taxes and tax
regulations, followed by financing, corruption, and inflation. Small
business owners in Latin America considered corruption and inadequate
infrastructure the worst problems. They are followed by crime and theft,
financing, high taxes and tax regulation. In Sub-Saharan Africa the most
critical problems were corruption, tax regulations and high taxes,
inadequate infrastructure, inflation, crime, theft and financing.
Research among small businesses in East African countries
(Tanzania, Kenya, and Uganda) indicate that the private sector is
overregulated with regulations that overlap and duplicate each other at
central and local levels. Entrepreneurs are often subject to lengthy and
costly delays in clearances and the approval process (Macculloch, 2001).
According to the World Bank and IMF economists, the number one problem
faced by Ghanaian entrepreneurs is inadequate access to credit
(Chamlee-Wright, 1997). Steel and Webster (1991) also reported that the
most serious challenges encountered by Ghanaian business owners is the
unavailability of capital. In fact, most small scale entrepreneurs are
not very good prospects for banks and financial institutions. They have
little means for collateral and lack formal education/training in
business practices. As a result, they pose more risk than benefit to the
banks and other financial establishments (Morewagae, Seemule &
Nigerian entrepreneurs reported that they were frequently harassed
by government officials who extorted money from their businesses. Poor
infrastructure including bad roads, water shortage, erratic electric
supply, and poor telecommunication system represent additional
challenges faced by small business owners (Mambula, 2002). Difficulty in
gaining access to bank credits and other financial institutions proved
to be a major obstacle hindering the process of Nigerian entrepreneurial
development, but the most serious and damaging problem threatening the
state of entrepreneurship in Nigeria is a lack of government interest in
and support for MSEs (Ariyo, 2005). This poor attitude toward the
private sector explains why there has never been any real attempt on the
part of government to develop any programs or lasting policies to
support small businesses.
In general, Nigerian entrepreneurs face the same set of problems as
those of business owners around the world. But the stance of government
toward the private sector seems to create the most damaging effect on
micro and small enterprises (MSEs). Results of this study would provide
more insight into the on-going obstacles faced by entrepreneurs so that
a more conducive environment can be created to promote the development
2.4. Stress and Business Ownership
Stress is believed to be an integral part of business ownership. It
is a result of heavy workloads, excessive risks involved (Palmer,1971),
and a higher need for achievement by entrepreneurs (Brockhaus, 1982;
Langan-Fox & Roth, 1995). It is defined as an internal state or a
reaction to whatever a person believes to be a threat to him or her,
whether it is a real or imagined (Clark & Watson, 1991).
Consequences of a high level of stress may be observed in the forms of
absenteeism, accidents, increase in health care cost or declining
productivity (Roberts, Lapidus & Chonko, 1997; Crampton et al.,
1995; Hall & Savery, 1986). Ivancevich and Matteson (1980) estimated
that the stress-related cost to business in the United States is equal
to more than 10 percent of gross national product.
Researchers have attributed stress to many causes. Chay (1993)
believes that stress exists when perceived demands exceed perceived
resources. In other words, when people feel demands are threatened by
inadequate resources, stress occurs. Findings from a study by Vasumathi
et al. (2003) suggests that stress arises from expectations, greed,
desires and ambitions. When discrepancy exists between these sources and
the outcome of the efforts to achieve success, stress takes place. Other
factors leading to job stress may include long working hours, too much
competition, high pressure deadlines, excessive rules and regulations,
inadequate support, work load and personal conflict (Roberts, Lapidus
& Chonko, 1997; Crampton et al., 1995; Hall & Savery, 1986).
In a study of Nigerian entrepreneurs, Akande (1994) identified
several sources of stress including loneliness, the time demands of
business, conflicts with partners and employees and their needs for
achievement. The author further elaborated on the causes of stress by
explaining that although small business owners are surrounded by many
people, they still feel isolated for the reason of not being able to
confide their thoughts in any one of them. On the other hand, business
ownership may provide them with good material rewards, but the demands
of their jobs do not allow them to spend their wealth. Since
entrepreneurs work with business partners and employees to bring goods
and services to customers, on a daily basis they often experience
disappointments and frustration in their relationships with them.
Finally, small business owners are hard drivers for success and failure
to succeed causes stress.
As indicated earlier, stress may create adverse consequences for
entrepreneurs, stress management and control are needed. A few studies
on methods of stress reduction suggest social support as a good medicine
for alleviating stress (Rahim, 1996; Chay,1993). Research results from a
study by Mack and McGee (2001) however did not support the contention
that social support mitigates work and non-work stress. The evidence on
the relationship between social support and stress has been
inconclusive. Some studies (Ganster & Mayes, 1987; Etzion, 1984;
Kobasa & Puccetti, 1983; Abdel-Halim, 1982) found a negative
correlation between them. While others (Ganster, Mayers &
Fusilier,1986; Kaufman & Beehr, 1986; Fisher, 1985) reported
opposite results. Other researchers indicated that individuals with high
internal locus of control tend to use support resources more effectively
and therefore can reduce the level of anxiety coming from stress
(Sandler & Lakey, 1982). Cohen (1988) and Chay (1993) postulated
that individual perception and personality characteristics determine
whether an event is harmful or benign which may lead to more or less
stress. Results of a study by Latack, Kinicki and Prussia (1995) show
that an ability to control the situation may help a person better cope
with stress. Further, if tasks performed are more complex and
interesting, the worker experiences less stress (Mack & McGee,
2001). Flexible rules and less rigid procedures diminish stress level
(Nasurdin, Ramayah & Beng, 2006), but an organizational climate
filled with extreme competition and lack of interaction is poised to
become stressful (Wong and Wong, 2002).
Although fully aware of the dangers arising from excessive stress,
many Nigerian entrepreneurs are unwilling to deal with the problem. The
reason for this reluctance may be attributed to the fact that business
owners who experience a daily struggle for survival may not consider
stress management important. It is an unnecessary distraction from
business life (Akande, 1994). In concurrence with Akande's
findings, Boyd and Gumpert (1983) indicate that entrepreneurs are more
concerned with their challenges and successes than spending their busy
time dealing with stress and anxiety.
Mixed results from stress studies suggest that further research is
needed. Nigerian entrepreneurs seem not to pay much attention to stress
in spite of living a severely stressful life. Being aware of harmful
consequences caused by stress, Nigerian small business owners may be
more willing to effectively deal with stress which might lead them to a
more successful and productive career.
3. RESEARCH METHODOLOGY
Subjects were 243 entrepreneurs in Lagos, the former capital city
of Nigeria with a population of eight million (Wikipedia- Free
Encyclopedia, 2007). It is an overcrowded city averaging six people per
room. In 1991, the capital was moved to Abuja but Lagos remains the
economic center of Nigeria. For the purpose of this study, an
entrepreneur is defined as an individual who owns and operates the
retail, wholesale, service or manufacturing business. The OECD further
indicates that a micro-enterprise is the one that employs ten persons or
less, while an SME (small and medium-sized enterprise) has less than 250
employees. The respondents of this study are primarily
Potential subjects of the study were identified and randomly
selected through the use of Chamber of Commerce directories. Non profit
organizations, government owned enterprises, and any business that had
its transactions done on the street were disregarded. The data was
obtained by face-to-face meetings with entrepreneurs. The administrator
of the survey was a Nigerian graduate assistant in an AACSB accredited
university on the East Coast. Before leaving for Lagos, Nigeria in the
summer of 2005, the student was asked to participate in a special
training session, during which interview approaches were discussed and
purposes of the study were explained.
3.3. Survey Questionnaire
The survey used in this study was originally developed by Hung M.
Chu (Chu & Katsioloudes, 2001) and has been utilized in subsequent
research since 2001. The questionnaire survey consists of 26 questions
and was divided into four main groups. The first group deals with
ownership, types and age of business, number and category of employees.
The second group intends to gather some personal information such as age
of the business owner, gender, marital status, educational level and
work history. Third group focuses on entrepreneur's daily
experiences and expectations and includes questions relevant to reasons
for success or failure, motivations and problems encountered. The final
set of questions was designed to discover the sources of stress and
business related stress. The level of support from families and friends
was also assessed. Although Yoruba, Ibo, Hausa are the most popular
dialects in Nigeria, English is recognized as the official language, the
survey therefore was conducted in English.
3.4. Data Analysis
The strengths of perceived success variables, motivation variables
and problems were measured using a 5 point- Likert Scale. A mean score
for each item was calculated. A higher mean score indicates greater
importance. A correlation analysis using Pearson correlation
coefficients with p-values were used to determine the effect of success
and family support on entrepreneurs' stress.
4.1. Sample Characteristics
Table 1 shows the average age of Nigerian entrepreneurs at 36.7
which is less than those in Romania, 41.5, (Benzing, Chu, & Szabo,
2005) and Turkey, 41.2 (Chu, Kara, & Benzing, 2007). With regard to
educational level attained, 56 percent reported that they had some
graduate work or had obtained a graduate degree, 21 percent completed
college, 17 percent attended or completed high school and 6 percent
indicated that they had finished or nearly completed grade school. In
contrast to many developing countries, Nigerian entrepreneurs are highly
educated, and their educational level attained is comparable to those of
business owners in Romania (Benzing, Chu & Szabo, 2005). With regard
to gender and marital status, 69 percent of respondents are male and 31
percent female. This result indicates an improvement in the rate of
women's participation in business. An earlier survey reported the
proportion of men to women entrepreneurs was 89 percent versus 11
percent (Akande,1994). Findings reflect the effect of Nigerian culture
which treats women as unequal. A gender divide still exists in Nigeria
as well as in all of Africa (Woldie & Adersua, 2004). Table 1 also
reports that 76 percent of respondents are married, and 24 percent,
Asked to indicate the types of business establishments, 70 percent
of respondents reported that they built the businesses themselves, 8
percent bought their businesses from others, and only 2 percent
indicated they inherited their enterprises. The results imply that a
majority of Nigerian enterprises are established by the first generation
of business owners, only a few of these businesses are passed down from
The average age of business is reported to be at 8.40 years. The
results suggest the existence of a less favorable environment for small
business development in Nigeria. According to Ariyo (2004), not until
recently, there seemed to be a lack of government interest in and
support for entrepreneurship.
The survey's results also show that Nigerian entrepreneurs
work an average of 37.8 hours per week. The time devoted to business by
Nigerian business owners is comparable to those in Ghana (Chu, Benzing
& McGee, 2007) but much less when compared with entrepreneurs in
Vietnam (Chu & Benzing, 2004) and Romania (Benzing, Chu & Szabo,
4.2. Motivation Factors
Entrepreneurs were asked to rate 10 reasons for business ownership.
On a five point Likert scale with five (5) being "extremely
important" and one (1) being "the least important", table
2 shows that the two most important reasons are "to be my own
boss", closely followed by "for my own satisfaction and
growth". "To increase my income" and "to be able to
use my past experience and training" are equally rated as number
three reasons. Given the very high rate of unemployment among educated
Nigerians (Anomo, 2007), many of them select business ownership as an
alternative career, and consider it the means to control their destiny
and to derive satisfaction. On the other hand, the Nigerian urban
unemployment rate reported at 12.3 percent in 2003 was not a rosy
picture (Wikipedia-Free Encyclopedia,2005). This statistic explains why
respondents to the survey ranked "to increase my income" and
"job security" as the critical motives for starting a
business. Results of this survey supported Akande's postulation
that Nigerian entrepreneurs' most important motive for business
ownership is "monetary rewards and profit" (Akande, 1994).
Findings from this study also confirm the survey results by Woldie and
Adersua (2004) on the reasons for becoming business owners by Nigerian
women. These women indicated that they started their businesses to
"reduce poverty" and "reverse the deteriorating economic
4.3. Business Success Factors
Data presented in table 3 show that Nigerian entrepreneurs rate
hard work as the most important factor contributing to the success of
their business. Possessing good management skills and good customer
service were ranked second and third. Friendliness/charisma was on the
top 4th of the list. The ability to manage personnel and a reputation
for honesty were also critical to business success.
Findings from this study corroborate those of Neshamba (2000) who
suggested that entrepreneurs' hard working habit is a "sine
qua non" condition for a thriving enterprise. Hard work is measured
by long hours devoted to business by entrepreneurs. Yusuf (1995), on the
other hand, pointed out that managerial skills were important
ingredients to business success. According to Clark, Callister &
Wallace (2003) managerial skills consist of "theories, techniques,
and behavioral guidelines which if applied properly, will enhance a
manager's practice". Respondents to this survey confirm
Yusuf's suggestion of the need for managerial skills to the success
of entrepreneurs. Moreover, Nigerian entrepreneurs feel that
friendliness to customers and providing customers with good service
could entice them to repeat their purchases which contribute to a higher
level of profit. This finding seems to be in congruence with the results
from a study of Vietnamese entrepreneurs who believe in the same
critical factors defining the success of a business (Benzing, Chu &
Although the survey did not ask entrepreneurs to indicate their
religious affiliation, one can safely assume that many respondents are
Muslims because a majority of the Nigerian population practices Islam.
According to a CIA report (2007), 50 percent of Nigeria's citizens
are Muslims, 40 percent Christians, and 10 percent belong to other
faiths. As a result, findings of this study show that small business
owners rank 'reputation for honesty" very high on the list of
successful factors. This finding is consistent with that found among
entrepreneurs in Turkey, a country dominated by Muslims (Chu, Kara,
& Benzing, 2007). The similarity of results may allow one to
speculate that like Turkish entrepreneurs, Nigerian business owners
might be introducing Islamic values into their business life. Honesty in
business therefore becomes not only the customers' expectation but
is also regarded as an ethical standard for business owners to adopt.
4.4. Problems Encountered by Nigerian Entrepreneurs
Nigerian entrepreneurs were also asked to identify the problems
that they face. As shown in table 4, unreliable/undependable employees
was ranked first among the obstacles encountered. Closely followed
behind were a weak economy and electricity problems.
The problem of not being able to recruit and retain good employees
seems to be a universal challenge facing business owners in many
countries. Romanian entrepreneurs ranked unreliable employees the second
most important problem (Benzing, Chu & Szabo, 2005). This problem
proved to be more serious for Turkish entrepreneurs because of the
expense and burden related to hiring and firing employees (World Bank,
2006). As a result, Turkish entrepreneurs must hire only the most
competent workers, but the pool of these workers seems to be limited
everywhere (Chu, Kara, & Benzing, 2007). Vietnamese small business
owners indicated that their business ventures could be more successful
if they were able to hire enough good employees and have them remain
with the business (Benzing, Chu & Callanan, 2005).
Faced with a high unemployment rate created by the weak economy,
Nigerians should be glad to obtain a job and work hard at it, so why are
entrepreneurs facing the problem of not having enough good/reliable
workers? Part of this answer may be attributed to the fact that small
and medium-sized enterprises do not have adequate resources to allow
good compensation. In addition, the opportunities for advancement in
MSEs are limited. Good employees therefore are reluctant to join small
businesses and will be more than happy to leave when a better job is
Data presented in table 4 also show that Nigerian entrepreneurs
consider electricity problems very serious. Results of the survey
reflect the current status of electricity supply in Nigeria. According
to the World Bank report (1991), Nigeria is facing "an electricity
crisis in which industrial growth and socioeconomic development pace are
kept below what is attainable by the economy". Findings from a
study of Nigerian entrepreneurs by Mambula (2002) suggest that besides
the problem of harassment by government officials, small business owners
face many more constraints. Typical among these was the poor
infrastructure including bad roads, poor electric supply and water
shortage. In an article recently appeared in the New York Times, Wine
(2007) reported that of total 79 power plants existing in Nigeria, only
19 are working. As a result, virtually all households and businesses
have to purchase their own generators in order to meet their electricity
needs. Respondents to this survey confirm the severity of the power
shortages. If this crisis cannot be quickly resolved, it will become a
threat to the country's economic well-being and hinder the
development of small enterprises.
Finally, "unsafe location" and "lack of management
training" were also included among the critical problems facing
Nigerian entrepreneurs. Respondents to this survey seem to suggest an
inadequacy of land and dwelling currently exists in the crowding city of
Lagos. The exorbitant price of real estate is preventing small business
owners from being located in more secure and convenient locations.
Discussing the challenges facing entrepreneurs, experts on Nigerian
economic development suggest that not all of the responsibilities for
difficulties encountered by MSEs can be blamed on government or on micro
and small enterprises. In fact, Nigeria's short history of
experience in industrial, commercial as well as formal education in
business theories and practices may account for most of the lack of
managerial skills experienced by small business owners. This situation
may be attributed to the policies imposed on African colonies by Western
countries (Falola, 1996; Juma, 1991; Schatz, 1996).
4.5. Business Success, Social Support and Stress
As shown in table 5, Nigerian entrepreneurs believe they are
successful and express great satisfaction with their success. They also
indicate that their success level is higher than expected. When asked if
the support of family and friends contributed to their business success,
the answer was very positive. These findings seem to be in congruence
with the theoretical view that job performance leads to job satisfaction
(McShane & Von Glinow, 2005). Higher performers receive more
rewards, therefore they are more satisfied. Entrepreneurs who have their
success meet expectations are more satisfied than those who attain a
success less than expected. Empirical studies show that the support of
family and friends is significantly related to success and satisfaction
(Chu, Kara, & Benzing, 2007). This study's results support
those of previous studies.
When correlations between success, satisfaction, family support and
stress were analyzed, some interesting results were found and are
presented in table 6. It is evident that a strong correlation exists
between business success and satisfaction. Similar conclusions on the
correlation between entrepreneurs' satisfaction and their perceived
success can also be inferred. The more they feel their success is met,
the more satisfied they become. The relationship between business
success and stress is not significant. In addition, there is no
significant relationship between family support and stress found in this
study. Results of Rahim's study (1996) suggest that social support
is negatively associated with stress. Findings from a study by Chay
(1993) also indicated that social support moderates the effect of work
Stress is a subset of entrepreneurship. It takes place not only
when adverse conditions exist, but arises even when business is
thriving. Entrepreneurs need to have appropriate strategies ready for
unpredictable outcomes. Stress therefore is an unavoidable reality for
small business owners (Akande,1994).
5. CONCLUSION AND DISCUSSION
In order to improve its economy, Nigeria needs to further the
development of its private sector. It can be done by creating an
environment favorable to the growth of MSEs, strengthening the factors
that lead to business success, and addressing the problems threatening
the existence and advancement of micro and small enterprises (MSEs).
Results of this study suggest that Nigerians consider
entrepreneurship an avenue leading to job security and improving their
livelihood. They also regard business ownership as a means of
controlling their destiny and deriving self-satisfaction. With respect
to the problems faced, Nigerian entrepreneurs cite unreliable employees
as the most critical. Weak economy, unsafe location, undependable
electricity supply and a lack of management training are closely ranked
behind. The factors that contribute to the success of small business
owners include the willingness to work hard, possession of management
skills, good customer services, and being friendly to customers. Results
of the survey also indicate that family/friends support, and business
success have no effect on business-related stress.
On the basis of these findings, it is imperative that Nigerian
policy decision makers take appropriate measures to promote
entrepreneurship. Among positive steps to be taken, the following may be
considered. First, the government must improve the infrastructure and
select qualified people to implement and monitor the projects. Second,
the government should further the development of entrepreneurship by
becoming a customer for small businesses' goods and services
through procurements, contracts and orders. Third, a system of business
networking must be created to allow entrepreneurs to share information
in the areas of financial, personnel, market information, equipment and
raw material supplies (Yusuf, 1995). Fourth, because of the influence of
the institution of extended family on apprentice training of potential
entrepreneurs, the Nigerian government should provide sufficient
incentive and support to encourage more establishment of family
business. Finally, academic institutions, financial organizations and
government can work together to provide training needs to prospective
entrepreneurs. Both theoretical and practical aspects of business
operation should be included in the program. Promising candidates may be
recommended for a loan to establish their business, after the completion
of such training (Mambula, 2002).
Economic prosperity in Nigeria, as in the rest of the world,
depends on an energetic private sector. A class of well trained, highly
motivated entrepreneurs should be established to lead MSEs to a higher
level of growth which would significantly contribute to the
country's economic well-being.
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Dr. Hung M. Chu is a professor of strategic management and
international business at West Chester University and earned his Ph.D.
from Louisiana State University. He has published articles related to
entrepreneurship and international management in the Journal of
Developmental Entrepreneurship, The Transnational Journal, Journal of
Global Business, Journal of the Academy of Business Administration, and
the Psychological Reports and has conducted surveys in China and
Dr. Orhan Kara (Corresponding author) is an assistant professor of
economics and finance at West Chester University and earned his Ph.D.
degrees at the University of Wisconsin-Milwaukee and at the University
of Wisconsin-Madison. He has published articles in economics, finance,
and entrepreneurship in various journals.
Dr. Cynhia Benzing is a professor of economics and finance at West
Chester University and earned her Ph.D. from Drexel University. She has
published articles related to entrepreneurship in the Journal of
Developmental Entrepreneurship and Journal of Global Business. She has
also published in the Atlantic Economic Journal, Journal of Economic
Education, Journal of Psychology, International Advances in Economics
Research, and the Journal of Financial Education. Her research interest
includes small business conditions in developing countries, the
determinants of price in internet auctions, and economics/finance
TABLE 1: SAMPLE CHARACTERISTICS
Gender Frequency Percent
Male 164 69%
Female 73 31%
Married 166 76%
Single 51 24%
Mean age of entrepreneur 36.7 years
Average working hours per week 37.8 hours
Educational level achieved
Completed grade school or less 13 6%
Attended high school or
completed high school 37 17%
Attended college or
completed college 46 21%
Had some graduate work or
completed graduate degree 123 56%
Types of business ownership
Established by you 168 70%
Bought from another 20 8%
Inherited 5 2%
Average age of business 8.4 years
Average number of employees 4.33 FT
Types of business
Retailing 51 22%
Wholesaling 40 16%
Service 119 51%
Manufacturing 25 11%
Agricultural tools & equipments 20 9%
Others 15 6%
TABLE 2: MEAN SCORE FOR MOTIVATION OF NIGERIAN ENTREPRENEURS
(5=extremely important, 4=very important, 3=mildly important,
2=not very important, 1 =unimportant)
Motivational Factors Mean Std. Dev.
1. To be my own boss 4.01 1.02
2. To be able to use my 3.98 0.98
past experience & training
3. To prove I can do it 3.72 1.04
4. To increase my income 3.98 1.06
5. To gain public recognition 3.11 1.28
6. To provide jobs for my family 2.73 1.25
7. For my own satisfaction and growth 4.00 0.98
8. So I will have job security 3.96 1.02
9. To build a business to pass on 3.40 1.05
10. To be closer to my family 3.33 1.34
TABLE 3 : MEAN SCORE FOR FACTORS CONTRIBUTING TO BUSINESS SUCCESS
(5=extremely important, 4=very important, 3=mildly important,
2=not very important, 1 =unimportant)
Success Factors Mean Std. Dev.
1. Good general management skills 4.28 0.99
2. Charisma; friendliness to customers 4.07 1.05
3. Satisfactory government support 2.92 1.30
4. Appropriate training 3.94 1.03
5. Access to capital 4.04 1.07
6. Previous business experience 3.82 1.02
7. Support of families and friends 3.24 1.12
8. Marketing factors (sales and promotions) 3.56 1.08
9. Good product at a competitive price 3.72 1.15
10. Good customer service 4.18 0.99
11. Hard work 4.29 0.98
12. Location 4.01 1.03
13. Maintenance of accurate record of 3.91 0.99
sales & Expenses
14. Ability to manage personnel 4.06 0.96
15. Community involvement 2.86 1.19
16. Political involvement 2.36 1.20
17. Reputation for honesty 4.05 1.18
TABLE 4 : MEAN SCORE FOR EACH PROBLEM FACED BY ENTREPRENEURS
(5=very serious problem, 4=serious problem, 3=problem,
2=minor problem, 1 =not a problem)
Problems Mean Std. Dev.
1. Unreliable and undependable employees 3.87 1.27
2. Too much competition 3.26 1.15
3. Obtaining short-term financial capital 3.20 1.24
4. Obtaining long-term financial capital 3.14 1.37
5. Too much government 3.26 1.32
6. Limited parking 2.79 1.20
7. Unsafe location 3.39 1.30
8. Weak economy 3.71 1.24
9. Lack of management training 3.30 1.29
10. Lack of marketing training 3.16 1.23
11. Inability to maintain accurate, info. 3.27 1.32
12. Complex and confusing tax structure 3.13 1.24
13. Business registration process 2.70 1.35
14. Foreign exchange limitations 2.72 1.37
15. Poor roads/transportation 3.11 1.48
16. Electricity problems 3.39 1.63
TABLE 5: MEAN SCORE FOR SUCCESS, FAMILY SUPPORT AND STRESS
Mean Std. Dev.
Q1. How would you describe your business success? 3.20 0.74
(4=very successful, 3=successful, 2=average,
Q2. To what extent are you satisfied with your 4.21 0.78
(5=very satisfied, 4=satisfied, 3=somewhat
satisfied, 2=dissatisfied, 1=very
Q3. How well have your success met your 3.21 0.80
(4=more than I expected, 3=met my
expectations; 2=somewhat met my expectations,
1=did not meet my expectations)
Q4. As a business owner, how would you rate the 3.99 0.76
level of business-related stress?
(5=very high, 4=high, 3=low, 2=very low,
Q5. How would you rate the support from family 3.36 1.21
(5=very substantial, 4=substantial, 3=medium,
2=low, 1=very low)
TABLE 6: CORRELATIONS OF SUCCESS, STRESS, AND FAMILY SUPPORT
(Pearson correlation coefficients with p-values in parentheses)
Q1 Q2 Q3 Q4
Q3 0.628 0.648
Q4 -0.027 -0.003 0.039
(0.687) (0.966) (0.548)
Q5 0.204 0.193 0.247 0.126
(0.002) (0.003) (0.000) (0.051)