ABSTRACT

This research work is on causes of business failure and possible

solutions with a case study of Faith printing press, Uyo.
business failure is when a firm is suffering from either technical
insolvency or bankruptcy or when it happens that a firms total
revenue do not cover its total cost , this can be avoided by
finding

solutions to business failure by way of managing

recourses in a proper way. It is in view of this that a research

work as this was undertaken.
The research work contains five chapters, the introduction
examines the historical background of the case study and so on
and also limitations of the projects were outlined. chapter two
was centered on the literature reviews with a view of bringing
out what business entails, its operations and impact on the
society ,its mode of operations and why and how failure occurs
in business enter prices. Population sample and sources of data
collocation were the various methods of data collection adopted
.such

as

desk

research

,personal

interview

as

well

as

questionnaires
In chapter four presentation and analysis of data was shown in
the write up. The data collected were analyzed and presented
based on the research questions, which form the views and
opinions of the respondents drawn.
In the final chapter, summaries and recommendations were
made on the subject matter.

TABLE OF CONTENTS
Title - -

Declaration-

--

Approval- -

Dedication--

AcknowledgementAbstract-

--

--

ii

--

iii

--

iv

--

--

vi

Table of contents-

vii

1.1 Historical Background Of Faith Printing Press- -

CHAPTER ONE - Introduction

1.0 Background Of The Study1
9
1.2

Statement of The Problem-

11
1.3 Statements of Hypothesis-

1.4 Objectives of The Study- -

12

1.5 Significance of The Study-

1.6 Scope and Limitations of The Study-

12

13
13
1.7 Definitions of Terms--

15

18

CHAPTER TWO - Literature Review

2.0 Introduction-

2.1 Definition of Business20

2.2 Types of Businesses-

21
2.3 Basic
operations

Management

Functions

needed

for

business

25

2.4 Importance of Business to the Society-

29
2.5 Modes of Operation In Faith Printing Press32
2.6 Sources of Funds for Faith Printing Press
34
2.7. Reasons for Business Failure - References -

35

44

CHAPTER THREE - Research Methodology

3.0 Introduction-

3.2 Population Sample Size of the Study-

48

45
3.1 Research Design46
47
3.3 Sampling Techniques Used-

3.4 Instrument Used in Data Collection- -

47
-

3.5 Procedures for the Administration of the Instrument-

48
3.6 Statistical Techniques Used-

50

49
CHAPTER FOUR Presentation and Analysis of Data
4.0 Introduction-

4.1 Test of Hypothesis- -

62

4.2 Test of hypothesis observed and expected frequency table

based on table sixteen - 4.3 Conclusion -

63

65

CHAPTER FIVE-SUMMARY OF FINDINGS, CONCLUSIONS &

RECOMMENDATIONS

5.0 Introduction-- -

66

67

--

5.1 Summary Of Major Findings

66
5.2 Conclusions-

5.3 Recommendations

67
Bibliography-

69

Appendix -

70

CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND OF THE STUDY
Business is absolutely a complex activity. This is because it
involves a lot of technicalities ranging from the task of
planning to control of such plans in order to achieve the
desire objectives of profit maximization. It is in view of this,
that this study is mainly centered on the floating of a
business to a stage where it finds it difficult to keep its head
above water.
In the late 70s business was in its period of boom, the
economy was doing well at that point in time and the
exchange

rate

was

appreciable

within

this

period.

International trade was easy as a result of lesser trade

restrictions and foreign exchange control.
During this period, Faith printing press was a beneficiary of
the prevailing policies such as the importation of papers and
other printing materials. These goods were usually tax free

by the agencies concerned, as a result of the significance the

government attaches to the publishing sector and the
clearance procedures at the port were effective and efficient
then.
In the late 80s as a result of the military take-over, various
decrees and policies came into place. The economy became
unbearable for the citizens and their purchasing power
became very low, thereby forcing business not to live up to
their required billing. What followed was that industries
started operating on short run, and later businesses started
folding up.
The various trade restrictions, VAT policies on goods
imported did not help matters. The result effect of all these,
was folding up of businesses. Against the business affected
was then within our locality the -Faith printing press. The
concerns shown people in the locality spearheaded an
agenda to resuscitate the company and prevent it from total
collapse.

The process of doing this proved difficult due to the extent of

funds require to source for foreign exchange needed for the
importation of raw materials there were other problems that
seem intractable. But the people and company unite make
persistence efforts to resuscitate the company but the more
difficult problems that resulted, Motivated an interest to
study the problems of business failure and the possible
solutions.
1.1 HISTORICAL BACKGROUND OF FAITH PRINTING PRESS
Faith printing press is a sole proprietorship business. It is
own by Chief Gabriel O. Faith. It was established on 20 th
August 1969 and was situated at V.V.I Lagos/Keffi Street,
Uyo.
Faith printing press was set-up with the objective of
providing the best quality printing jobs to customers at
affordable prices and at the due appointed time. At the early
life of the press, it started with letterpress and binding
machine. Namely:
Cutting Machines.

Adana, Letterpress Heidelberg and

In the course of expansion, the press relocated to N.C-.3

Oshogbo Road, Uyo in 1979. The press increased its
machineries by purchasing Rota prints, plate maker, camera,
and kond. During this period the press has increased its area
of specialization from letter press to offset printing.
In 1985, the press moved to J.11 main street Badarawa Uyo
and finally relocated to its permanent site V.V. 15 Nassarawa
Road, Uyo in June 1993. in its present site, it has acquired
additional machines such as multilith 1850,

Stitching

machine, computers and Ruling machines.

This organization is engaged in the publishing of companies
Annual reports, text-books, invoices, Receipts calendars,
invitation cards, Business cards e.t.c. Faith printing press is
an organization worthy to be emulated, Judging by its
achievement

within

the

period

of

its

existence.

The

organization has render a lot of its services to prominent

companies & government parastatals within this country,
among them are: Nitel Headquarters- Lagos, National
electric power authority Uyo, Uyo state water board, Ahmadu

Bello University Teaching Hospital, Uyo, Bayero University

Kano, Nice Top papers industries Uyo etc.
Below is a sample of what Faith printing press Organizational
chart should look like.

Managing
Director
Press

maintenance

Manager

manager/ engineer
Production

Cashier
Cashier

Lithographer
With
Apprentices

printing section
And
Apprentices

Drivers
1.2

Receptionist

Finishing section
And
Apprentices

Gate men

STATEMENT OF THE PROBLEM

Business entrepreneurs today are making a lot of efforts in
order to make their investment a perpetual going concern.
Every means available at their disposal are being made
available terms of capital base sophisticated equipments etc
so as to meet-business demands and sustain the completive
market environment.

How ever inspite of these tremendous effort businesses are

still failing and these are owing to various factors that pose
myriads of problems.
1.3 STATEMENTS OF HYPOTHESIS
The following hypothesis has been formulated to serve as a
guide for this study:1. That efficient management of resources could not lead
to business failure of _Faith printing press
2. That inefficient management of resource could lead to
business failure in Faith printing press.
1.4 OBJECTIVES OF THE STUDY
This study intends to achieve the following objective
i.

To find out how Faith printing press should operate to

avoid failure.

ii.

To examine the implications of government economic

policies on the survival or failure of Faith printing press.

iii.

To find out and how to avoid business collapse with

reference to Faith printing press

iv.

To examine the use and control of resources in Faith

printing press.

1.5 SIGNIFICANCE OF THE STUDY

This study is significant in that its will also identify possible
mistakes if any, which could lead to business failure.
It will also point out possible solutions to business failure
with reference to Faith printing press, Uyo. It will be also
investigate some important factors to be considered before
setting up a business and those that will be implemented in
the course of business.
Finally, the study will be useful to the management of Faith
printing press, Uyo as it will help in tackling the problems
militating against the operations of the company.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
This study is untaken to find out the fundamental obstacles
of business failure and possible solutions for a sustainable
economic development with a case study of Faith printing
press Uyo. The study is concerned in the first place with the

source of funds available for printing press firms and then

their management system i.e its efficiency; it will appraise
these two factors and provide possible solutions.
The selected firm is a small printing press, it however
engages in different types of activities ranging from supplies,
printing contacts and binding.
The limitations of this study are many, though not unfamiliar,
as every project work deals with such limits, it includes the
following:i.

The time limit for the submission of this project will not
be sufficient. this is due to the compressed academic
calendar that makes up a semester during which the
research work is being made.

ii.

In adequate finance.

iii.

Lack of full co-operation from officials/workers of Faith

printing press whose views are important to this topic.
Despite these difficulties it is the hope of the researcher

that this study will be of value to future researchers and

also printing (private) operators.
1.7 DEFINITIONS OF TERMS
This is an attempt which is aimed at explaining and defining
of terms and abbreviations used according to the meaning of
the contexts. Such terms includes the following:a. LIQUIDATION:-

This is a process where a company

can no longer Maximize profit and
is being forced to wind up.

b. OVERHEAD COST:-

These are the cost incurred as a

result of involvement in production
of goods and services.

c. WORKING CAPITAL:-

This is the amount set aside for

the
running of the business.

d.

MANAGEMENT:-

The

authorities

that

are

concerned with
decision making
e.

CASH BOOK:-

used for

This is a principal book account

reading business transaction.

f.

CAPACITY:-

Ability to hold, contain, get hold of,

learn Things, qualities ideal

etc.
g.

EFFECTIVE:-

Is the ability to produce good

result, the
power to achieve desire goal or
objectives
h.

EFFICIENT:-

All the means or ways use in

producing

desire

to

satisfactory result.
i.

ENTERPRISE:-

on
j.

A business unit that needs courage

that offers difficulties.

PROBLEMS:-

Difficult

situation,

question,

question
proposed for solution or discussion.
k.

OBJECTIVE:-

Are the goals, aims, and missions,

desire targets that an

organization must
to stay in business.

accomplish in other

l.

PLAN:-

Forecast, an action, method or

programme

before hand. To
a

worth

out

draw or desire

plan for Generally

plan

are

goals and objectives which in

organization seeks to seeks not to
achieve which an organization seeks to
achieve in executions of its
responsibilities.
m.

RULE OF THUMB-

practice
n.

MOTIVATION:-

one to

Something

that

is

the

usual

habit.
Incentives that propel or arouse
put in more effort.

CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
This chapter attempts to deal with the review of related
literatures by examining the conceptual views of some
writers on business failure.
The problem of business failure is so prevalent in all parts of
the country. Businesses are set up in order to expand and
provide essential services to every member of the society
but this contrary to its objectives more and more businesses
are winding up. When financial institutions which are
supposed to be reviewing business are victims of the same
problem. In a report by J.C Anyanwu in the Business times
title Averting Bank failure in the 1990s the author
diagnosed the cause of failures as the general economic
climate in which banks operates. For instance rapid inflation,
high interest rate and high variability in the rate of growth of
the money supply are very difficult conditions in which to run
a bank- Unfortunately, the conditions are glaringly prevalent
in the present Nigeria situation.

Freeser J. (1990: pg 49-53), a study conducted by Dum and

Bradstreet in 1973 and the conclusion was that 95% of the
cause of failure stated from managerial inexperience and
incompetence.

The

evidence

for

inexperience

and

incompetence was:i.

Inadequate sales

44 percent

ii.

Competitive weakness

24 percent

iii.

Inadequate inventory control

4 percent

iv.

Poor geographical location

2 percent

v.

Heavy Operation Expenditure

9 percent

Lying behind these is failure to plan for planning and failure,

to control the consequence of the plans environmental
factors may be significant but only to the extent that they
are beyond the ability of the competent manager to predict
and control.
Allsopp M.J (1977: pg 73-81) also reported that in Eight
instances that companies losses were attributed to their
directors. Estimate made in average debt of 60 compared to

an average of 30 in the previous year as at that time. It is

significant that bad debt is suffered to a great extent by
small company both in U.S.A and U.K.
Ogun Toyinbo. N.O (2003 pg 19) An article published in the
daily times, examined and diagnosed other causes of
business failures as interest discount income and credit
related free income, from substantial part of a banks
income.
2.1 DEFINITION OF BUSINESS
The word business means different things to different
people. Many authors have defined business based on their
purpose at a given time. The writer will therefore, examine
the various definitions as given by different authors.
According to oxford advance learners dictionary of current
English A.S. Horn by, business is defined as buying and
selling, commerce, trade shop, commercial enterprises etc.
while trade has been further analyzed by the same
dictionary to mean buying and selling which involves
exchange of goods for money or other goods.

Also company and Allied matters Decree of 1990 defines it

as any trade, industry and profession and any other
occupation carried on for profit.
Having examine the above definition, one can see that all
the definition are centered in carrying on trade with a view of
making some profit.
Business can therefore, be define as any activity carried on
which produces and distribute goods and render services for
the

purpose

of

making

profits.

All

business

involves

financing, purchasing, production selling and distribution of

goods for a reward of profit.
2.2 TYPES OF BUSINESSES
Businesses are of various types and can further be classified
two namely:i.

Un-incorporated

ii.

In- corporated

In the case of unincorporated it can further be classified into

viz sole proprietorship & partnership

1a.

THE SOLE PROPRIETORSHIP

This is the simplest form of business enterprise otherwise
known as one man business. They are very small business
organizations and are under the ownership and control of
one person. Here one person takes the responsibility of
providing the finance, making the operating decisions, taking
the risks and benefiting from the profits and losses
1b. THE PARTNERSHIP
S. Olokoyo (2000 pg 13) in his books managing your small
scale enterprises successfully-defines partnership as a form
of

business

that

is

development

over

the

sole

proprietorship. Partnership can be defined as an association

of 2 or more people formed for the purpose of running a
business with a view to profit.
Often individuals do not wish to operate in business in their
own but prefer to do so in conjunction with an agreement to
share

responsibilities,

the

profits

and

losses.

This

is

commonly found in professions like medical doctors and law

practice. The ownership & control is in the hand of more than

one-person. The formation of this type of organization needs

between 2-20 members.
The partnership is also subject to few legal requirements
other than the contract between the partners. Other legal
requirements include the following:a.

All partners except in special cases are subject to

unlimited liability for all debts and obligations of the
business

b.

The normal maximum number of partners is 20 and the

least is 2.

c.

No restrictions on a partner: showing his/her intention

to withdraw its membership any time.

ii.

Ellen.R

(2004)

financial

times

noted

that

the

incorporated form of business organization was a direct

result of 19th century limited liability Acts, remodified to
suit the 20th profit driven century, which was designed
to mobilize the savings of the community into company
finance. There are two types of this form, namely:(a) The private company (b) The public company.

1.A. Private COMPANY

The private company must have not less than two and not
more than fifty members. This form of organization is very
popular in the retail, whole sale trade and in those sections
of manufacturing industry in which only moderately amount
of capital are required.

b.

PUBLIC COMPANY

Lipsey R.G et al (1992:pg 24-27) Economic defines public

company as a business enterprise set up with no limit in the
number of members and a minimum number of seven. The
public company is the major instruments responsible for the
high rate of economic growth in most industrial countries.
The formation of joint stock company involves more legal
constraints than the other two forms of business in
organizations. Its formation involves the production of three
documents:a.

MEMORANDUM OF ASSOCIATION:-

This

includes

the name of Company, its objectives, details of authorized

Share capital. It must be signed by at least two persons in

the case of a private and at least seven people in the case of
a public company.
b.

ARTICLE OF ASSOCIATION:- This document contains

Information on

its

issues

and

alteration of capital, dividend policy,

transfer

of

shares,

a private company

has constraints on the right to transfer shares and

prohibition of public subscription.
c.

STATUTORY DECLARATION:-Is a declaration by a

director or the acting solicitor for the company that the

conditions laid down in the company act for the formation of
companies have been complied with.
Except in the event of bankruptcy or a decision to wind up
the joint-stock company has no weakness of impermanence
as in the other two forms of business. The principle of limited
liability is of great importance. It means that the shareholder
is liable only up to the amount stated on the face value of
the shares.

2.3 BASIC

MANAGEMENT

FUNCTIONS

NEEDED

FOR

BUSINESS
OPERATIONS
1.

Ellen. R. (2004) Financial times sees management

functions as a combination of elements and task of

management processes combined for the effective running
of

an

enterprise

or

organization.

They

are

therefore

considered very relevant in the discussion of management

roles and action.
Henri Fayol considered to be the father of management
stipulated the following functions of management.
a.

PLANNING:-

This is the role of using available data to

forecast future requirements of various human skills needed

at the various units of the organization.
b.

ORGANIZING- This involves arranging organizational

activities into units and allocating specific schedules to

individual. It includes establishing a structural relationship of
Responsibilities and authority between and within the
component units.

c.

STAFFING: - This is a process of recruitment, selection

placement, retention and welfare during and after services of

people whose services are dispensed with.
d.

CO-ORDINATING: -

Co-ordination

involves

ensuring that the personnel activities of the component units

are uni-directional, in line with approved schedules and
aimed at achieving goals of the organization.
e.

REPORTING- This

is

the

documentation

of

staff

performances, promotions, disciplinary actions, leaves etc.

All personnel officers keep data relating to staff and their
performances at work.
f.

CONTROL: -

It means exercise of authority to directs

workers on what to do and ensuring that deviations when

noticed are timely corrected.
g.

BUDGETING- It means translating the quantity &

quality of materials needed for each department into

monetary terms. It is a means of stating possible salaries to
be paid workers within a given period and therefore earning
at a total cost of staff remunerations to ease decision on how
many new staff could be taken on board in relation to output.

This functions are performed by the top level management

of the organization.
OPERATIVE FUNCTIONS
2.

Operative functions are the specific duties of the

personnel office in an organization, which are performed on

day-to-day basis. Generally operative duties of the personnel
office are performed by junior and middle level office of the
personnel office working under the supervision of more
serious personnel officers. These duties are:a.

RECRUITMENT:-

Determining the type and sources

of human Skills to be brought into the organization.

b.

STAFF SELECTION:-

The responsibility of choosing

who should be taken amongst the various applicants for the

job.
c.

LABOUR RELATIONS:- Every worker comes into an

organization with needs and expectations which tend to

influence his behaviour at his place of work. It is the
responsibility of the personnel office to give good counseling

to employer and ensure speedy resolutions of conflicts

between workers or workers & management.
d.

WAGES ADMINISTRATION:- This

human

skills

qualifications,

responsibilities

with

involve

experience

monetary

and

matching

and

official

non-monetary

compensation packages for workers. Generally this is done in

line with existing labour legislations, policies on government
salaries and wages, the companys productivity level and
other such related factors.
e.

STAFF TRAINING & DEVELOPMENT:- Each

staff

needs to improve on already acquired skills particularly if the

schedule

of

duties

involved

using

newly

introduced

machinery. To develop new skills or improve on skills is for all

categories of workers so as to keep a breast of development
in their areas of work.
f.

STAFF PERFORMANCE EVALUATION:- It

responsibility

of

the

personnel

office

to

is

the

assess

the

performance of workers. But because of Complexities in

assessing workers of different skills, this activity is often
delegated to heads who observe the worker more regularly

and are more conversant with the workers schedule of

duties.
g.

PROMOTION AND DISCIPLINE:- It

is

the

responsibility of the office to promote or discipline staff. Even

when procedures for promotion begin from the relevant
heads of departments they normally end with the personnel
office who eventually conveys such information. Similarly all
disciplinary measures ending with warning letter, demotions
in ranks, loss of jobs etc. are finalized in the

personnel

office.
2.4 IMPORTANCE OF BUSINESS TO THE SOCIETY
The 3rd National Development plan (2001, p.353), define
small

businesses

as

manufacturing

establishments

employing less than ten people or whose investment in

machinery and equipment do not exceed N600, 000.
Business is a very important instrument to the society it
produces great benefits to the economy. The following are
some of the benefits of business to the society:-

a.

CREATION OF EMPLOYMENT OPPORTUNITIES:-It

is

felt that the multiplicity of business will go away in lessening

the high level of unemployment. A close look at the nature of
unemployment

will

indicate

that

the

number

of

the

unemployed falls into the group of skilled and semi-skilled.

J.

E.

Ndagi

(1994,pg:104)

Essentials

of

research

methodology for Nigeria postulate that if these group

(above) of people are encouraged and given financial
assistance, they could start their own businesses in specific
areas where effective demand have been identified. And as
more people establish and operate their own business, they
would be in position to employ more of the excess labour
which will definitely reduce the rate of unemployment.
b.

REDUCTION IN RURAL URBAN MIGRATION

Sabir

(2000,

PG

79)

entrepreneurship

in

Nigeria

emphasis that establishing business in rural areas has been

an

advantage

in

solving

the

problem

of

rural-urban

movement, by so doing rural labour is absorbed and the

establishment would also depend on the agricultural produce

of the rural dwellers.
This in turn will have a positive impact on agricultural output
and lead to a rise in its income and would encourage rural
dwellers to remain in the locality rather than move to urban
areas in search of wage employment.
c.

EVEN DISTRIBUTION OF INDUSTRIES

Ndagi

J.E.

(1994,

pg

47-49)

essentials

of

research

methodology observed that the rapid growth in the small

scale businesses may also lead to a more even distribution
of industries nationwide. Taking into consideration that the
capital requirement in starting the business may be low and
with the backing of government policies. More business
operations would take of all over the country.
d.

MOBILIZATION OF LOCAL RESOURCES

Chester B .et al (1999.pg:222) Applied management brings

to the fore that business has brought into view, the need to
switch emphasis from important dependent large scale

industries to small enterprises which can structure their

production emphasis to depend mostly on local sources with
local available resources include raw materials and supplies.
2.5 MODES OF OPERATION IN FAITH PRINTING PRESS
Faith printing press is a sole proprietorship organization, but
in the course of its operation these are level of authority that
official duties must proceed through. In order to access the
level of authority in the organization.
A managing Director who happens to be the proprietor, who
is in-charge of the affairs of the company, heads Faith
printing press. He also takes any/every responsibility for all
profits or losses made out of the business.
The managing Director delegate parts of its authority to the
press manager. The press manager over sees the affairs of
the press in the absence of the Director. He also supervises
and make sure that all activities in the press room are well
co-coordinated customers are satisfied for future patronage
and that staff welfare are met by company.

The production manager comes into focus next, he makes

sure the operators produce the right job to meet customers
satisfaction. Where there are deviations, he corrects the
staff.
Next in the hierarchy is the maintenance engineers who
make sure the machines are in order, he enquires from the
operators the state of the machines and effect the
necessary repairs.
Moreso, the press has own cashiers who make daily records
of sales and make deliveries to the book. Also there is a staff
within the reception, he specifies the cost of jobs to the
customers.
The press has the lithographic section, printing section and
finishing sections, in addition to its asset it has a pick-up van
used for deliveries.
The press has a total of twelve staff and 6 apprentices they
resume at 8:00 am and close 6:00 pm daily; they also work
on overtime and are paid weekly for their services.
2.6 SOURCES OF FUNDS FOR FAITH PRINTING PRESS

The sources of finance available to business organizations

are numerous. Faith printing press as a sole proprietorship
has limited sources as a result of its composition. The
sources available to the press are outline below.
a.

PERSONNEL SAVINGS

A business can be financed through personnel savings. The

proprietor finances the operations of the press through his
savings in the bank. They are always used as last resort,
where he has used up all the available funds on him.
b.

LOANS

The proprietor also applies for loans from reputable banks

where he owns account, also using his second house as
collateral. In the bid to finance jobs, capital is a problem, but
where the reputation of the press is respected they easily
obtain these loans with the right collaterals. Over years the
presss relationship with the banks have being cordial and
this action has really helped to remain in business.
C.

RETAINED PROFIT

Faith printing press is a company worthy to be emulated. It is

an organization that has continued to remain in business

based on its steady profits realized from its contractual

deals. The proprietor deemed it necessary to plough back his
profit into the industry so as to provide employment
opportunities for Nigerians and also make it possible for its
operations to survive though not without its own hard times,
which almost lead to its closure.
D.

CREDITS

This source of finance has also being of great benefits to the

organization where there is no fund available material credits
are given to the organization e.g papers, inks, films, plates
etc. the organization settle the suppliers at agreed dates
without interests.
2.7. REASONS FOR BUSINESS FAILURE
S. Olokoyo (2000, pg 5) in his book in his book Managing
your

small

scale

enterprise

successfully

guide

to

entrepreneurs, managers and students emphasis that a large

number of new businesses fold up even before they operate
for three years for the following reasons:-

1.

Plunging in without first testing the troubled water on a

small scale.

2.

Under pricing of goods or services.

3.

Under estimating how much time it will take to build a

market.
4.

Starting with too little capital.

5.

Starting with much capital and being careless in its use.

6.

Going into business with little or no experience.

7.

Borrowing money without planning how and when to

pay it back etc.

One of the major advantages and characteristics of a

company is that it has perpetual success from which implies
that it can live for a very long time.
When the entity can no longer function effectively with
regard to profit maximization, if its accumulating liability
then to profit the entity is said to have failed in its primary
objectives.
This chapter deals with the reason /causes/types of business
failure which will be discussed in the following paragraphs:-

a.

Types and symptoms of business failures

Sabir .B. (2000, pg: 47) entrepreneur in Nigeria explained

that there are basically two types of

business failure,

financial failure and economic failure. A firm is said to have

financial failure if it is suffering from either technical or
bankruptcy insolvency. If a business is unable to meet its
current obligations as they fall due, even though its total
assets exceed its total liabilities, it is technically insolvent.
Bankruptcy insolvency occurs, however, only where a firms
total asset could not meet the total liabilities. Economic
failure relates to a situation where firms total revenue do not
cover its total cost. Some symptoms of imminent business
failure includes the following:
a.

Deterioting working capital;

b.

Declining sales;

c.

Declining profit;

d.

Higher debt ratio.

B.

STATISTICS ON BUSINESS FAILURE

It is relatively easier to obtain statistics on the mortality rate

of businesses in the Western European countries than in
Nigeria say Sabir most of the research in Nigeria deals with
the type, classification and registration of businesses, with
very little information on their performance rates or failure.

Table 1.1
Distribution of factors claimed to be responsible for business
failure of a selected sample.
Factors

Number who give the

Percentage

factor as their main

Luck
Insufficient money
Insufficient
preparation
Lack of business

cause of failure
10
12
6
15

connection
Low level of business
education
Lack of experience
Poor health
Lack of management
ability
Other factors
Total respondents

15.87
19.05
9.52
23.81

7.94

6
4
3

9.52
6.35
4.76

2
63

3.18
100.00

Table 1.1
Sabir.B (2000:pg:44) put forward the following explanation
for the table.
It

is

noteworthy

that

almost

24%

of

our

sampled

entrepreneurs indicated lack of business connection as their

number one cause of business failure. It is not dear from the
conclusion whether lack of business connection signifies
inability on the part of the particular entrepreneur to foster

fruitful

relationships

considerations

or

whether

predominate

in

some
the

non-

business

selection

and

maintenance of would be customers. When it is noted that

almost 16% of the respondents also ascribe the cause of
their business failure to luck, while some people interviewed
in Nigeria especially in the retailing, wholesaling, distribution
and contracting sector is more of who you know, to what
party you belong and from what state you come from, rather
than whether that you perform effectively.
The result also reveal that over 19% of our sample agreed
that lack of money was the primary cause of their failure
though experience has shown that understanding how to use
money your own and that which you can borrow is key
function for success.
The level of ignorance of some entrepreneurs in record
keeping and financial management is appealing. Many of
them cannot or do not want to employ the services of
qualified accounts.

The result is that many businesses operate in confusion,

unable to differentiate between periodic gains and loses.
Profit tend to be overstated most of the time, and personal
expenses

often

are

not

distinguishable from

business

expenses.
In the investigation about 10% confessed their lack of prior
business experience constitute their main worry. To know the
trick and the short cuts in business practices, there is no
alternative to experience.
Surprisingly, even some cases even fatal to their businesses.
Being

in

business

is

plain

handiwork

demanding

full

commitment and diligence.

It is revealing and interesting to note that under factors
responsible for success, management ability was rated
first(by 22% of respondents) followed by experience (10%).
Government support and hand work comes closely after
experience(over 14%) to bracket the third rating. The fifth
factor in the list of priority was luck. It is significant that

almost 13% of sampled respondents mentioned luck as the

cause of their success. However only 6.35% mentioned their
connection with influential people.
When a business fails, the owner simply stops functioning.
This is true especially since there is no legal requirement
enforcing the registration of failure. Only publicly quoted
companies have to give notice of the intention to wind up.
Chioma. O.C a professional in (2005 on our guest program)
observes the rate of business discontinuance in Nigeria
believes that a greater number of people who enter the
business that a greater number of people who enter the
business world in Nigeria every year fail than succeed. Table
1.1, despite their limited sample provides an inside to the
pattern of this trend.
(c) FINANCE CONSTRAINTS
Finance is the backbone of any entity and where this is
lacking or inadequate the entity will lack enough finance to
run its activities properly, also it will not be able to increase

its working capital and this could force it into pre-mature

liquidation.
d. LACK OF GOOD MANAGEMENT
Cole G.A. (2003,pg 67) management theory and practice
put forward the fact that lack of good management is
another

prominent

factors

which

affects

business

organizations in the sphere of appointing managers of the

firm. The appointment of these to run the affair of the entity
should be base on the number of shares held and proves
ability to manage the entity and not on the bases of
familiarity. Influence, recognition e.t.c. A director should be
able to plan and control the entity effectively and where this
is lacking then, the entity is due for main collapse.
e. INABILITY TO KEEP BOOKS OF ACCOUNT
Kootz.H.Whehrich .H. (2003) management 12th edition
postulates inability to keep books of account this will
definitely have an effect on the business especially where
the volume of transaction is very large. If the firm does not
keep proper book of account it will not be able to ascertain
whether the business has made a profit or loss in a particular

year. All transaction should be recorded on a daily basis and

on double principle.
f. EMBEZZLEMENT OF FUNDS
Chester.B.et

al(1994,pg

:153)

Applied

Management

explains that it is a situation where funds of the company will

be greatly reduced and this affects other areas where
finance is urgently needed and this could lead to liquidation
of the firm.
g. LACK/ SHORTAGE OF RAW MATERIALS
Ndagi

J.E.

(1994,

pg:

33)

essentials

of

research

methodology observed that raw materials sourcing can

make or mar any company, in that without it the company
can not continue to operate, the absence of which paralyses
the company, because it is a basic requirement

REFERENCES
1. Allsopp Micheal.J (1999)
books ltd
2. Anyanwu J C (1990)

Survival in Business London

pg 11-15
Averting bank failures in the
business times pg 13

3. Chester. B. et al (1999)
222
4. Cole G.A (2000)

Applied management pg :153

management theory and practice
Elst publishing pg 67

5. Chioma. O.C(2005)
6. Frezer.J (1990)
finance
publishing ltd, p.49-53

Our guest program. October.

The management of business
London pitman

7. Hornby A.S (2002)

dictionary of
Oxford university press

Oxford Advance learners

current English
pg 114

8. Ibadan press (2001)

vol.1, pg

National Development plan

353

9. Kootz.H.Whehrich.H (2003)
Mcgraw Hill
York

Management 12th edition

publishers, New

10. Kotler & Armstong. G (2002)

co
11. Ndagi J.C (2003)
Methodology for
education university press,
Ibadan Nigeria.
12. Olokoyo.S. (2000)
Enterprises
13
13. Sabir. B. (2000)

Principles of marketing Eastern

Edition Publishers Russie, pg 3
Essentials of research
Nigeria

Managing your small scale

successfully. pg 5Entrepreneurship in Nigeria Jinjiri
publishers, pg 44

CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION
This chapter explains the various method used by the
researcher in collecting information necessary for

the

validation of the findings in this research study.

Data collection is an important aspect of a research project
work. The research type employ in determining this research
work is descriptive. This is concern with the collection of data
for the purpose of describing and interpreting existing
conditions, prevailing practices on going process e.t.c.
The study is mainly based on data and information sourced
through preliminary survey, investigation, interviews and
questionnaires, the research observes the case study and
attempts to learn about the operations of the printing press.
Preliminary survey compared with observation fields a
broader range of information are effective for a greater
number of the research problem.

3.1 RESEARCH DESIGN

The method of data collection for this project write-up is both
primary and secondary
i. PRIMARY DATA
The primary data used in this work is through survey and
empirical method. The survey method was used specifically
because it is convenient and efficient investigative tool in a
realistic settings while employing relevant variables and use
of multi- variant statistics to analyze the data. Especially it
sought for information from Faith printing press and other
printing

ventures

around.

The

research

conducted

personal interview with some executive and staff of Faith

printing press.
ii. SECONDARY DATA
The secondary data collected for this project work was the
information

obtained

from

some

relevant

textbooks

pamphlets of commerce ministries newspapers. Relevant

textbooks where intensively used by the researcher in the
course of this project, besides, the information gathered

from

the

organization

and

some

relevant

small-scale

ventures around Uyo, aided the researches substantially in

his conclusion and recommendations.
3.2 POPULATION SAMPLE SIZE OF THE STUDY
The population of this study consist of two branches of Faith
printing press at Uyo and Abuja. More attention is paid to the
branch in Uyo with a population sample of twelve (12)
workers out of a total of forty-three (43) therefore sampling
is based on Uyo branch as a chosen sample and study.
3.3 SAMPLING TECHNIQUES USED
The research decided to use simply random sampling, which
is a method of drawing a proportion (sampling) of a
population so that each member of the population has equal
chance of being selected. The researcher also employ the
use of convenience sampling as the technique used for the
data collection because it is unbiased and convenience to
the researchers and no member of the population has more
chance of being selected than the other.

3.4 INSTRUMENT USED IN DATA COLLECTION

Questionnaire was the instrument used in the data collection
by the researcher, which contains 16 questions written in
simple English for the easy understanding of respondents.
Alternative answers were provided for each question and few
cases, spaces were also provided for respondents.
3.5 PROCEDURES FOR THE ADMINISTRATION OF THE
INSTRUMENT
The two procedures which the researchers use was primary
and secondary sources of data collection for the study:
The primary sources of data is questionnaire and journals,
newspapers, and discussions with colleagues.
The secondary sources of data used include textbooks,
journals, dictionary etc.

Details of the administration of the questionnaire are shown

below.
Respondents

Top

Number

of Number

of Percentage

questionnaire

questionnaire

administered
1

returned
1

management
Senior staff
Junior staff
Total

3
8
12

3
8
12

of

response %
25
8.2
66.8
100

3.6 STATISTICAL TECHNIQUES USED

The data collected were tabulated and analyzed using
enumeration statistics, it involves the use of percentage
ratios and averages. The procedures enumerated were used
to ensure the validity and reliability of the data collected and
the researchers also make use chi-square method to show
the hypothesis.

CHAPTER FOUR
PRESENTATION AND ANALYSIS OF DATA
4.0 INTRODUCTION
The sample size of this research is twelve (12) and 12
questionnaires were administered, out of which all were
returned. The respondents were made up of 7 males
representing 58.3% and 5 females representing 41.7%.
Majority of the respondents fall within the age group of 1825 years representing 75% of the total sample and the
remaining

25%

fall

within

the

age

of

26-45

years

respectively.
Data on their respective positions in the company shows
10% of the respondents are the top management, 20% as
line managers and another 20% as supervisors while the
bulk of 50% are lower level/junior workers.
TABLE 1
Responses
Managing director
Manager
Supervisor
Junior staff
Total

Frequency
1
3
3
7
12

Source: questionnaire administered

Percentage
10
20
20
50
100

It is clear from the above table that 50% of the respondents

are

junior

workers,

while

10%

represent

the

top

management level, 40% representing six of the respondents

account for the manager and supervisors. This also shows
that about 70% of the workers fall under workers category,
since even the supervisors will be supervising and rendering
touches here and there.
For how long have they been working in the company, shows
their responses in the following data
TABLE 2
Responses
Frequency
1-5yrs
3
6-10yrs
4
11 and above
5
Total
12
Source: questionnaire administered

Percentage
25
33.3
41.7
100

It is clear from the above table that 75 respondents have

being with the company for about 6-11 years while three of
the respondents representing 25% total sample have been
with the press for just 1-5 years. This shows that the majority
of staffs have stayed with the press for a long period and this

will naturally make them see it as part of their lives and they
may not be in support of either new comers and fresh brains.
TABLE 3
RESPONDEN

1-5

0%

6-10

11-15

16-20

TS
Top

------

-----

-----

-----

8%

-----

-----

management
Senior staff
Junior staff
Total

------------------

------------

--------1

8%
-----

2
3
11

17% ----67% ----92% -----

---------

When the question on the companys staff strength asked,

the respondents claim that it is 5 or so while 1 of the
respondent felt that its about 6-10 staffs while eleven (11)
of the respondents representing about 92% indicated that
the staff strength is about (11) eleven to fifteen and finally
non of the respondents indicated the range of 16-20 staff
strength.
TABLE 4
On how many of the staff are either skilled or unskilled.
RESPONSES
Frequency
Percentage
Skilled
4
33.3
Un skilled
8
66.7
Total
12
100
Source questionnaire administered.
From the table above, it shows that 8 of the 12 respondents
representing 66.7% are unskilled staff, while 4 of the 12
respondents representing 33.3% indicate the number of the

skilled staffs. What the company needs is to the skilled

workers.
TABLE 5
How many of your staff are educationally qualified in?
Responses
Frequency
Percentage
Printing technology
4
33.3
Business management
6
50
Other fields of study
2
16.7
Total
12
100
Source- questionnaire administered
From the above table, it shows that the only 4 of the
respondent representing 33.3% of the sample, claim that the
company has staff qualified in printing technology, while
50% of respondent claimed such staffs are qualified in
business management while 16.7% a test to the fact that the
company also has staffs qualified in other areas. This shows
that the company should recruit more staffs that are well
qualified in printing technology, this is for the fact that such
steps will help in fast turning the companies activities the
printing quality will increase in line with modern work, there
will also be on time finishing of jobs. The 16.7% of other
should be increase to accommodate accountants and
mechanical engineers.

TABLE 6
How would you rate the companys annual turnover?
RESPONSES
Frequency
Percentage
High
----------Moderate/ median
9
67.0%
Low
3
33.0%
Total
12
100
Sources Questionnaire administered
From the above table it shows that 67% of respondent claimed
that the companys annual turnover has been moderate while
33.3% claim that there has being low turnover from the
responses it suggest that the companys turn out has never
being high, because there was not a single respondent claiming
such. Therefore the company will have to find ways to increase
turnover to avoid bankruptcy or failure.
TABLE 7
On the question which says that in your own opinion/
views what is your companys production capacity.
Responses
Frequency
Percentage
Large scale
3
25
capacity
Small scale
3
25
production
capacity
Moderate Capacity
6
50
Total
12
100%
Source: - Questionnaire administered

From the above table, it can be seen that 50% of the

respondents claimed that the company has the production
capacity of moderacy. While 25% representing 3 agreed that
the companys production capacity is large-scale production. 25
% also agreed that the company production capacity is small
scale. This means that the company will have to increase
production to at least 75% large-scale production to be able to
stay top in the market.
TABLE 8
Profit maximization is every organizations goal in what
ways do Faith printing press achieve this goal?
Responses
Frequency
Quality production
4
On time
1
delivery/deadline
Quality
6
consideration
Others
1
Total
12
Source Questionnaire administered

Percentage
33.4%
38.5
50
8.3
100

From table 8 the conclusion is that quantity production is a

top priority in Faith, which must be affecting it because
quality production is lacking behind, i e the company prefer
to mass produce than to consider quality in such production,

while quality is what they need to make a name. 8.3% of the

respondents feels that the company delivers on time which
is very small a time they ever meet such an objective, which
is suppose to be taken seriously.
TABLE 9
Has business patronage been good so far?
Responses
Frequency
Percentage
Certainly
3
25
Mildly
5
41.5
Not good
4
33.3
Total
12
100
Source:-Questionnaire administered
It is clear from the above table that 41.7 of the respondents
feels that business has not been that good but manageable.
25 % of respondents feels that the patronage has certainly
been ok, while 33.3% of respondents representing 4 staffs
claims that patronage needs a revival before it will finally
slumped.
TABLE 10
On the question of what major steps has been taken
to

increase

patronage?.

The

following

data

was

obtained and tabulated.

Responses

Frequency

Advert placement
Increase /easy communication

3
1

Percentag
e
16.7
8.3

Accessible road net work

8
Total
12
Source:-Questionnaire administered

75
100

From the table above the result of the respondents shows

that 75% representing 8 all agree that road net work is to be
addressed if the company seek to increase patronage i.e the
company lack motorable road to attack customers or even
the lack of it is scaring away customers, while 16.7% of
respondents representing 3 feels that advert placement will
definitely increase patronage. The remaining 8.3% claims
that

to

increase

patronage

the

company

needs

to

communicate more with the outside world.

TABLE 11
Are the machineries and equipments used for
production purposes up-to-date.
Responses
Frequency
Percentage
Yes
4
33.3
No
5
50
Not all of it
3
16.7
Total
12
100
Source: questionnaire administered
The table above shows that 33.3% of the respondents all
agree that the machineries and equipment used by the
company are obsolete while 50% of the respondents feel
that the equipments are up to date. 16.7% representing 3

respondents claim that not all of it are up - to date or in

good shape. This shows that the company will have to
update or even replace its machineries to be able to increase
production.

TABLE 12
How does the company source for its capital?
Responses
Frequency
Bank loans
4
Family sources
Personal saving
8
Total
12
Source: questionnaire

Percentage
33.3
66.7
100

From the table above it can be seen that respondents

representing 66.7% claim that the companys source of
capital is from personal savings, while 33.3% respondents
representing 4 claim that the companys source of capital is
from bank loans obtained by the company, maybe what the
company needs is that it should seek for more of the bank
loans so as to replace its obsolete machines, repair the road
which will in turn bring about more patronage and help in
the company to stay in business.
TABLE 13
The relationship between the staff and management
can best be described as?
Responses
Frequency
Percentage
Cordial
9
67
Stable
2
20
Unstable
1
1.3
Total
100
Source: questionnaire administered

The table shows that 67% of the respondents claims that the
staff and management relationship has been cordial, while
20% feels that its only been stable and respondents 1.3%
claims that its unstable. What the company needs is that
those 1.3 that felt their working relationship has being
unstable should brought on board so as to discourage any
disaffection among the company workers.
TABLE 14
In what ways has the company tried to motivate its
staff.
Responses
Frequency
Percentag
e
Over-time payments
5
41.6
Free health care provision
4
33.4
Affordable education for
dependents
Gifts to staff during
3
25
`ceremonies
Total
12
100
Source: questionnaire administered
From the above table 41.6% of respondents representing 5
claims that the companys motivational tool as been the
payment of over-times. While 33.4% of the respondents
claims that the company has been giving/providing them
with free health care to motivate them and 25% claims that
the company has made free gifts available for everyone

during celebrations/ceremonies it also shows that the

company has never made any arrangement for affordable
education of their dependents. The company needs to
increase the medical care been given as at now, because the
health of the workers definitely means fast and efficient job,
while bad health condition means less production and less
turnover. The company may also look in the possibility of
providing

affordable

education

or

other

alternative

arrangement.
TABLE 15
It was asked that what are the strategies employed to
provide stable power supply? The responses thus:
Responses
Frequency
Diesel generator
3
Petrol generator
1
Electricity
8
Total
12
Source: questionnaire administered

Percentage %
25
8.2
66.8
100

From the above table it can be seen that 25% of the

respondents represent 3 claims that diesel generator is the
strategy the company has put in-place to for tale power
failure. 82% of the respondents disagree and said petrol
generator is what the company use sustain power, while

66.8% claims that all they had is electricity power supply,

which they so much relay on, to which we all know will not
favour any form of business. The company will have to weigh
between the use of diesel and petrol type of generator,
compare price, affordability and availability.
TABLE 16
Did you think that Faith printing has the following
business qualities?
Responses
Good management
Efficient supervisors

Respondents

Frequenc

Percenta

Junior staffs
Top

y
8
1

ge
66.8
8.2

3
12

25
100

management
Capital strength
Senior staff
Total
All
Source: questionnaire administered

From the above table it can be seen that 66.8% of the

respondents who are junior staff claim that the management
team of Faith is nothing to write home about, while 25% of
respondents representing the senior staff claim that Faith
lacks capital and top management with 8.2% claims that the
problem

is

that

Faith

printing

press

lack

sufficient

supervisors. What need to be done is co-operation instead of

pointing accusing fingers at each other.

4.1 TEST OF HYPOTHESIS

Testing of hypothesis refers to the testing or trying to draw a
conclusion about the hypothesis stated earlier on or put
forward in chapter one. It is however important to note that
any conclusion reached at this stage is strictly based on data
collection and analysis in the research work with the staff of
the case study. In chapter one tentative statement were
drawn to serve as a guide to the conduct of this research
work. These hypotheses therefore are to be tested as against
the data collected and see whether they can be validated or
otherwise.
a. First

hypothesis,

which

states

that

efficient

management of resources could have prevented failure

of printing press.
HYPOTHESIS 1
H1: In efficient management of resources could not lead to
failure of Faith press.
H0: Inefficient management of resources could lead to
failure of Faith printing press.

In testing the validity of the statement can be analysed from

the following perspective of respondents in table 16 where
75% of the respondents agree that inefficiency and lack of
good management and inefficient supervising leads to failure
of Faith printing press. The hypothesis will be tested using
chi-square (2) testing 95% confidence level i.e. assume it to
be 95% accurate with 5% risk of error.
4.2 TEST OF HYPOTHESIS OBSERVED AND EXPECTED
FREQUENCY TABLE BASED ON TABLE SIXTEEN
Responses
Good management
Efficient supervisor
Inefficient resource
Capital strength
Column total
Source: survey data

Manageme Staff

Total

nt
19
7
0
5
31

row
41
12
3
26
83

23
5
3
21
52

The expected frequency are observed using the formula

Row total x Column total
Total observed
The level of confidence x=0.05
Degree of frequency df =(r-1) (c-1)(4-1)(2-1)=2
Testing statistics= 2 =

(0-e)2

E
Where 0= observed frequency
E=expected frequency
2= chi-square
Decision rule = you can accept H0 if your calculated value2 is
less than 2 value in the table i.e. accept H0 if 2<7.81
Computation
0

0-E

(0-E)

(0-E)2
E

19
7
0
5
23
5
3
21

15.3
4.5
1.1
7.8
14.4
3.1
0
13.2

3.7
2.5
-1.1
-2.8
8.6
1.9
3
7.8

13.69
6.25
-1.21
-7.84
73.96
3.61
9
60.84

0.89
1.39
-1.1
1.01
5.14
1.16
9
4.61
Y2=20.08

4.3 CONCLUSION:
Since the calculated value of 2 is greater than the table
value (7.81), we therefore reject H0 and accept H1 and
conclude that efficient management of resources could have
prevented failure of Faith printing press.

Therefore efficient management of resources contributed in a

meaningful way of managing of Faith printing press.

CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS &
RECOMMENDATIONS

5.0 INTRODUCTION
From chapter four, the result are presented in this chapter
with variable conclusions drawn from the research findings
and appropriate recommendations for the improvement of
business and also providing possible solutions that will avert
business failures.
5.1 SUMMARY OF MAJOR FINDINGS
From chapter four, the following are the findings that are
related to the hypothesis of the research work.
From table iv it was found out that the company is largely
made up of unskilled staff (66.7%) as a result there is a poor
management. Also table 5 reaffirmed that only 50% of the
staffs are educationally sound in business management
rather printing technology.

The respondent in table 12 indicate the need for further

capital to implement its operations.
In table 16, the respondents accounting for about 66.8 felt
that the company in need of good management finally in
table 15 the respondent appear to all agreed that the
company relay much on electricity which we all know is
epileptic. The company also used generator to combat
electricity failure, which is 25% and inadequate and substandard to implement the companies line of operations.
5.2 CONCLUSIONS
This project work was carried out to know the problems of
business failure and possible solutions with part reference to
Faith printing press Uyo.
The method used in collecting questionnaires were analysed
in the forth chapter and hypothesis testing was also made in
the same chapter and conclusion made also.
5.3 RECOMMENDATIONS

This aspect of project deals with the problematic areas

highlighted and brought to focus during this study. It is
anticipated that areas of weakness will be improved upon if
the recommendations listed below are fully implemented:1. It is recommended that efforts should be made to
employ

educationally

sound

staffs

in

printing

technology to ensure efficiency and effectiveness in her

operations.
2. Since the analysis also shows that poor infrastructure is
contributing to the companys failure, the company
should find ways of repairing the road or notifying the
appropriate authorities concern to come and see to the
matter.
3. Retained profits and other sources of funds should be
devised by the company to fund its operations.
4. Highly modernized diesel generator should be put in
place to prevent further power failure.

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