Sourcing Raw Materials For Small-Scale Business
In establishing a small-scale business, the process of sourcing raw materials plays a critical role in shaping the venture’s success. The procurement of high-quality raw materials is fundamental to ensuring the production of competitive and top-notch products. Small-scale entrepreneurs often face the challenge of finding reliable suppliers who can provide consistent and cost-effective resources. Developing robust relationships with suppliers is imperative, as it not only fosters trust but also facilitates a steady supply chain. Moreover, diversifying sources can mitigate the risks associated with dependency on a single supplier. Efficiency in sourcing is paramount for small-scale businesses to maintain competitiveness in the market, as it enables them to optimize costs, enhance product quality, and meet the dynamic demands of their customer base.
There have been a lot of difficulties in determining the definition of small scale business. To determine what a small scale business is we have to put into consideration so many employees, asset values, sales volume, financial strength number of locations, relative size and so on.
Some definitions of small scale business have been put up as in the case of the industrial research unit if Obafemi Awolowo university Ife, which states that is one whose capital assets equipment plant and working capital are less than N250.000.00 and employing power of not less than 50 full time workers
This study work toward how this small scale business can source raw materials for their production and how some of their problem can be solved. Small scale business are being posed by a lot of problem like finance, social amenities, not belonging to union of small scale business lack of planning .
This work studies how this problems will be solved and suggest how people involved in small scale business can solve this problem and more away of sourcing raw materials.
This study also made use a random sampling method in its research where questionnaires were supplied and distributed to various concerned firms.
Title page
Certification
Dedication
Acknowledgment.
Abstract
Table of content
CHAPTER ONE
0.1 INTRODUCTION
1.1 Background
1.2 Statement of problem
1.3 Objective of study
1.4 Research question
1.5 Hypothesis formulation
1.6 Significance of the study
1.7 Scope of the study
1.8 Limitation
1.9 Definition of term
Chapter of reference
CHAPTER TWO
2.0 Literature review
2.1 Introduction
2.2 Purpose of small- business
2.3 Types of raw- material
2.4 Basic requirement for effective business
2.5 Advantages of small business
2.6 Source of raw material and how to avoid failure in business
Reference
CHAPTER THREE
RESEARCH DESIGN & METHODOLOGY
3.0 Introduction of the study
3.1 research design
3.2 Area of study.
3.3 Population of the study
3.4 Sample size determination
3.5 Instrument for data collection
3.6 Variability of the instrument
3.7 Reliability of the instrument
3.8 Methods data collection
3.9 Method of data analysis
Chapter reference
CHAPTER FOUR
DATE PRESENTATION & ANALYSIS
4.1 Presentation & analysis of data
4.2 Testing of hypothesis
4.3 Summary of result
CHAPTER FIVE
DISCUSSION RECOMMENDATION AND CONCLUSION
5.1 Discussion of result finding
5.2 Conclusion
5.3 Recommendation
5.4 Suggestion for further study
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Industry has become the most dynamic sector in most developing countries like Nigeria.
It would be an over statement to say that small scale industries or business constitute the bulk of business establishment in most of these developing countries. It is very difficult to make a specific statement regarding the small scale business but walking along the streets of major towns in any state of this country would show that small scale business constitute at least 60% of the Nigeria industrial activities. This follows that the small scale business constitute a substantial portion of the gross domestic product (G&P) as well as generate the foreign exchange earnings of Nigeria.
Nigeria in the past times has placed much emphasis on capital intensive industries and tends to neglect the small scale businesses which are more essential to the country taking into consideration the countries human and natural resources as well as capital availability.
Large-scale businesses have been so much over estimated compared to the small scale business, because of the size. This indicates that so much attention is being give to the large-scale business by the government than the attention given to the small scale business which are indispensable to the functioning of our economy.
It is scale business les on their potentials for creating employment opportunities. The encouragement of small scale business will help to eliminate the imbalance in the rate of economic growth difference between the rural and urban areas and this enhance integrated rural development.
The problem with most entrepreneurs especially in Nigeria and in general is their inability to recognize the need to give priority attention to the issue of planning and control which are the essential ingredients in the management of very business. Venture be it large or small scale business.
In small scale manufacturing industries there are also the problem of sourcing raw material, which are essential for the manufactures of the products.
It is for this reason that we intend to look at the subject matter under consideration with a view to identifying problems and thereby suggest meaningful solutions to those problems.
1.2 STATEMENT OF THE PROBLEM
Any business whether small or large operating in any socio- economic setting is bound to have problems. Small scale business however, have problem peculiar to its size.
Studies have identified some of these problems as follows, incompetent management, competition, country, state of economy, lack of encouragement from the government finance high level of exchange rate, ban on importation of raw material etc.
Any of these problem could lead directly to the failure of small scale businesses which has been put as comprising the bulk of new business every year.
1.3 OBJECTIVE OF THE STUDY
This study has objectives as follows.
i) To identify how raw material are been sourced
ii) To identify the general problems of small scale business and how the problem be solved.
iii) To identify the effect of government legislation on important and the effects of exchange rate has on the small scale business.
iv) To identify the problems of planning and control as it effects the management of small scale business and then to proffer solutions that can help to bring about the availability of raw materials.
1.4 RESEARCH QUESTION
1) Does small scale enterprise have due attention over the year in terms of finance government policies and ban on importation of raw materials from overseas countries?
2) What factors hinder the growth of small scale enterprises?
3) Does finance constitute to the greatest problems of small scale enterprises?
4) How does your organization source for raw materials?
1.5 RESEARCH HYPOTHESIS
In order to sourcing raw material for small scale business the following three hypotheses has been devised.
1) H0: The small scale enterprises has not been given due attention over
The years in terms of finance
H1: The small scale enterprises has been given due attention over the Year
2) H0: Finance, marketing, manpower etc enterprises
3) H0: Finance does not been constitute the grates problems of small
Scale enterprises
H1: Finance of small-scale enterprises
1.6 SIGNIFIANCE OF THE STUDY
The significant of this study is to take a critical view of the issues of sourcing raw materials, which is primary need of the small scale business.
It is believed that this study will go a long way to out lining and lighting the problems encountered by managers and prospective entrepreneurs in order to minimize rate of business failure in Nigeria.
Furthermore, it is hoped that any manager who digs into the finding of this study will not doubt be an effective manager.
1.7 SCOPE OF STUDY
The scope of this study is to identify how raw materials are being sourced, the problem facing the sourcing of materials for small scale business. To find out the general problem of small scale business and how the problems should be solved.
The problem of planning and control as it effects the management of small it effects the management of small scale business and then to proffer solutions hat can help to bring about the availability of he raw materials.
This study will no doubt come up with finding regarding the problems of sourcing raw materials facing the entrepreneurs and prospective.
1.8 LIMITATION OF THE STUDY
Conducting an empirical research is not an easy task, even for a compete research. This research the sourcing raw material for small scale business was not an exception to the usual constraints and others problems associated with similar researchers in our society.
Environmental to problem vary from one place to another depending on such factors as the temperament of the respondents, the nature of the research, level of education of the respondent.
Despite the above fat is external to the researcher personal. Such as limited time, limited resources, finance, inadequate data and secrecy of certain records were encountered.
1.9 DEFINITION OF TERMS
i) CAPITAL INTENSIVE:
Using more of capital than any other factors of production
ii) “PHYSICAL BARRIES IMPOSSIBLE TO COROSS”
This is taken to means business constraints
Sourcing Raw Materials For Small-Scale Business
Sourcing raw materials is a crucial aspect of running a successful small-scale business. The availability, quality, and cost of your raw materials can significantly impact your product’s quality and profitability. Here are some steps to help you source raw materials effectively for your small-scale business:
Identify Your Raw Material Needs:
Determine the exact types and quantities of raw materials you need for your business. Be specific about the quality and specifications required for your products.
Research Suppliers:
Look for potential suppliers through various channels:
Local suppliers: Check local directories, trade associations, and business networks for nearby suppliers.
Online directories: Utilize online platforms like Alibaba, Thomasnet, or industry-specific directories to find suppliers.
Trade shows: Attend trade shows and exhibitions related to your industry to meet potential suppliers.
Get Quotes and Compare Prices:
Contact multiple suppliers and request quotes for your required raw materials. Compare prices, quality, lead times, and payment terms to find the best option for your business.
Assess Supplier Reliability:
Research the reputation and reliability of potential suppliers. Check for reviews, ask for references, and inquire about their track record with other businesses.
Consider Local Sourcing:
Whenever possible, source raw materials locally. This can reduce shipping costs, support the local economy, and provide more control over the quality and availability of materials.
Negotiate Terms and Conditions:
Negotiate pricing, payment terms, delivery schedules, and any other relevant terms with your chosen supplier. Building a good relationship with your supplier can lead to better deals over time.
Quality Assurance:
Ensure that the raw materials meet your quality standards. You may want to visit the supplier’s facility or request samples for testing before making a commitment.
Supplier Diversity:
Consider having multiple suppliers for critical raw materials to reduce the risk of disruptions. This strategy can help your business remain resilient in the face of supply chain challenges.
Establish a Backup Plan:
Develop contingency plans in case your primary supplier faces issues such as delays or quality problems. Identify alternative suppliers to mitigate risks.
Compliance and Documentation:
Ensure that your suppliers comply with any regulatory requirements related to your industry. Keep all necessary documentation, such as contracts and quality certifications, in order.
Inventory Management:
Maintain a well-organized inventory system to keep track of your raw material levels. Avoid overstocking or understocking, as both can affect your cash flow and production.
Continuous Improvement:
Regularly review your sourcing strategy and supplier relationships. Look for opportunities to improve efficiency, reduce costs, and enhance product quality.
Environmental and Ethical Considerations:
If relevant to your industry and target market, consider the environmental and ethical aspects of your raw material sourcing. Sustainable and ethical sourcing can be a selling point for your products.
Network with Peers:
Join industry associations and networks to connect with other small-scale business owners who can provide insights and recommendations for raw material sourcing.
Remember that effective raw material sourcing is an ongoing process that requires vigilance and adaptability. It’s essential to build strong relationships with your suppliers and continually monitor your supply chain to ensure the success of your small-scale business.