Small and medium enterprises are companies whose number of employee’s or output falls beneath specific digits. According to research findings, small companies are classified to have less than 50 employees, while medium sized companies are those that have employees of less than 250. SME’s play a dynamic role as engines through which developing countries thrive. Small and medium enterprises are found in every sector of any economy be it finance, power, petroleum, real-estate, Info-tech etc. They form the major components of any economy worldwide, and Nigeria can achieve more rapid economic growth through such medium. It is not the size of the business in a society that matters, but its impact. In Nigeria today 65-70% of its work force is under small and medium enterprise. Below are benefits of SME’s to the Nigerian economy.
SME’s are quick to start up – One strong benefit small and medium sized businesses contribute to the present economy is a quick response to their target market and customers. Due to their structure and sizes, business plans can be flexible and implanted which is vital for economic growth. Their flexibility to change helps businesses to adapt to market trends and reduces future crisis. Speed is an advantage and one that small businesses add to the present Nigerian economy. SME’s require small start-up capital making them cost effective. Additionally, the management size and structure is small, which makes the decision making process faster. Communication, innovation flow and organizational goals are easily integrated into such systems as well as a response to new innovation, customer’s complaints and propositions being attended to without long protocols. If the economic system of Nigeria is compared to that’s of a cell unit, SME’s are the mitochondria (power House).
SME’s increase employment-Small and medium enterprises play a major role in Nigeria’s economy in terms of job creation and income distribution. SME’s are the bedrock that micro-enterprises thrive on. The future of Nigeria lies more on the leverage of SME’s because they contribute more in terms of investments. The unemployment crisis and inefficient income distribution among most states and communities within Nigeria can be tackled by expanding and investing in SME’s. They also contribute immensely to the output of the economy. Research findings shows that a greater percentage of Nigerian’s work for SME’s i.e. businesses less than 150 employees.
SME’s create a strong relationship with consumers – Aside from products and services sold or rendered by SME’s, they also create strong relationships with consumers, which is a boost for business and economic growth. People are attached to products or services they can have a first hand experience with. SME’s bring such experiences to the threshold of consumers; they pass a message behind every product sold or service rendered. Customers are attached to specific brands because of trust and communication, which is a huge advantage SME’s have in this present economy. Being close to your customers is significant to business and economic growth. In this Nigerian economy filled with challenges, competition and undulating customer tendencies, SME’s create a niche for individuals to grow and flourish.