Small-scale
enterprises have many characteristics which distinguish it from large scale
enterprises and which also justifies separate analysis of their roles in the
economic development of countries. The report on financing of small-scale
enterprises in Nigeria had identified the following as the major
characteristics of small-scale enterprises.
1.
LARGE NUMBER: The small-scale
enterprises are large in number when compared to large-scale enterprises. This
is because the money/capital needed to establish the business is relatively
small and may not need legal provision to be fulfilled before they are set up.
2. INADEQUATE
SPECIALIZATION: There
is usually no much specialization/proprietor handles or supervises the
financing, production, marketing and personnel of the enterprises.
3.
INDEPENDENT
MANAGEMENT: The
manager is usually the owner of the business and as such it is independent,
unlike the large scale business where the management is in most cases different
from the owners; hence, usually dependent.
4.
INADEQUATE
CAPITAL: The
working capital is usually small due to the fact that it is financed by the
owners, friends or close relatives, not like in large-scale enterprises where
they collect loans from financial institutions and contributions from partners.
5.
LACK OF
ACCOUNTING RECORDS: The
small-scale enterprises have little or no accounting records. The small-scale
business owner believes that the maintenance of book of accounts and other
business records is costly and necessary.
6. ONE-MAN BUSINESS: Small scale
enterprises in Nigeria are operated like a sole proprietorship i.e. it is been
owned and managed by the owner of the business.