6/6/2016

EED MANUAL
A Simplified Edition

EED Manual - Compiled By Oilmone

Copyright Oilmone 2016

THE HISTORY OF ENTREPRENEURSHIP IN NIGERIA

The Early Stage
Entrepreneurship started when people produced more products than they needed, as such, they had to
exchange these surpluses. For instance, if a blacksmith produced more hoes than he needed,
he exchanges the surplus he had with what he had not but needed; maybe he needed some yams or goat
etc. he would look for someone who needed his products to exchange with. By this way, producers came
to realize that they can concentrate in their areas of production to produce more and then exchange with
what they needed.
So through this exchange of products, entrepreneurship started. A typical Nigerian entrepreneur is a selfmade man who might be said to have strong will to succeed, he might engage the services of others like;
friends, mates, in-laws etc. to help him in his work or production. Through this way, Nigerians in the olden
days were engaged in entrepreneurship. Early entrepreneurship is characterized with production or
manufacturing in which case the producer most often started with a small capital, most of it from his own
savings. Early entrepreneurship stared with trade by barter even before the advent of any form of money.

The Modern Stage

Modern entrepreneurship in Nigeria started with the coming of the colonial masters, who brought in
their wears and made Nigerians their middle men. In this way, modern entrepreneurship was conceived.
Most of the modern entrepreneurs were engaged in retail trade or sole proprietorship.
One of the major factors that have in many ways discouraged this flow of entrepreneurship development
in Nigeria is the value system brought about by formal education. For many decades, formal education
has been the preserve of the privilege. With formal education people had the opportunity of
being employed in the civil service, because in those days the economy was large enough to absorb into
the prestigious occupation all Nigerians their goods. As such, the system made Nigerians to be dependent
on the colonial masters.
Again the contrast between Nigerian and foreign entrepreneurs during the colonial era was very
detrimental and the competitive business strategy of the foreign entrepreneurs was ruinous and against
moral standards established by society. They did not adhere to the theory of live and lets live. For
instance, the United African Company (UAC) that was responsible for a substantial percentage of the
import and export trade of Nigeria, had the policy of dealing directly with producers and refused to make
use of the services of Nigerian entrepreneurs. The refusal of the expatriates to utilize the services of local
businessmen inhibited their expansion and acquisition of necessary skills and attitude. Because of this,
many eventually folded up. Those that folded up built up resentment against business which became very
demoralizing to other prospective entrepreneurs. As a result, the flow of entrepreneurship in the country
was slowed down. But, with more people being educated and the fact that government could no longer
employ most school leavers, economic programs to encourage individuals to go into private business and
be self-reliant were initiated.
Such economic policy programs that are geared towards self-reliance for individuals are programs as
Open Apprenticeship Scheme, Graduate Employment Programs etc. and other policies that encourage or
make it easy for entrepreneurs to acquire the needed funds e.g.; Peoples Bank of Nigeria, Funds for SmallScale Industries(FUSSI), co-operative societies etc. were established to assist entrepreneurs in Nigeria.

EED Manual - Compiled By Oilmone

WHAT ARE THE ROLE OF PERSONAL SAVINGS AND PORTFOLIO INVESTMENT IN

NATIONAL ECONOMIC DEVELOPMENT?
The contribution of entrepreneurship in the promotion of economic development cannot be
underestimated. The entrepreneurs are the change agents and the prime movers of the economy.
Entrepreneurs use human and economic resources to help them to implement their ideas. Economic
resources include money and equipment.
When you have estimated how much start-up capital you need for your new business, the next questions
is; where do you get that capital from? You will need the full amount at the start because the money is for
initial investments and working capital for the first months of operation. It is therefore important that
you do not start setting up your business until you have all the start-up capital you need.
In terms of personal finance, saving refer to preserving money for future use-typically by putting it on
deposit this is distinct from investment where there is an element of risk.
Savings can be described as substantial part of income kept for future use by an individual, households
a firm and government. In other words savings is the portion of the income that is set aside for further
investment or for future use.

Reasons for Savings

Savings is not a new phenomenon in economic circle. There are a number of reasons for savings
depending on the circumstantial problems/issues surrounding it. Such reasons include:

Investment purposes
For family up-keeping
To acquire assets
For special needs
For old age

Methods of Savings
1. Banks
a. Current
b. Savings
c. Deposit
2. Thrift and Cooperatives
3. Financial institutions
4. Buying of shares
Saving differs from savings in that the first refers to the act of putting aside money for future use,
whereas the second refers to the money itself one saved.

EED Manual - Compiled By Oilmone

BASIC LIFE SKILLS NEEDED BY AN ENTREPRENEUR

Enterprising men and women have the ability or know-how that enables them to undertake and
complete activities. Most men and women have a certain amount of knowledge, attitudes and practical
skills that can be useful when realizing an enterprise.
Skills are developed when a person learns how to do a task competently. Anyone can develop skills
by being willing to put in the necessary effort. There are several types of skills: practical everyday skills
such as writing legibly or doing household chores; vocational skills that enable a person to do a particular
job; and recreational skills like dancing, painting, or sports. You can enhance your life by adequately
developing your skills.
You should therefore evaluate the talents and level of skills you have and how they can be harnessed to
realize an enterprise. Talents and acquired skills have to be constantly utilized and applied; otherwise
they can also be forgotten and wasted.
Skills may be of a technical or managerial nature and they relate to the ability to perform tasks or
functions tactfully in specific areas of entrepreneurial endeavors.

Technical Skills
Technical skills are the practical abilities one needs in order to produce the needed products or provide
the required services. For example, to start a tailoring business, you need to be able to cut and sew, to
start a mechanic garage you should to be able to repair cars. If you do not have the needed skills, you rate
this as weakness.
Some other common examples of technical skills include:

Engineering
Computing
Carpentry
Catering

Most technical skills are acquired through study, and after years of experience and practice.

Managerial Skills
Business management skills are the abilities you need to run your business efficiently.
Marketing skill is one vital aspect of managerial skills. Other areas of business management skills which
are equally important to the success of your entrepreneurship business include:

Financial management
Selling
Planning
Leadership
Organization
Costing
Record Keeping
EED Manual - Compiled By Oilmone

Developing Managerial Skills

When managing employees, entrepreneurs:
SHOULD:
be consistent
be fair and honest
build enthusiasm
encourage questions
encourage employees to make their own decisions
instil confidence in them
keep an open door
listen actively
recognize individual differences
set a personal example
show consideration for the feelings of others
SHOULD NOT:
be argumentative
be autocratic
be overly demanding
be unreasonable
conceal the truth
discourage initiative
discourage ideas
do the thinking for employees
fail to clarify instructions
Play favorites
reprimand an employee in front of others
think small

EED Manual - Compiled By Oilmone

VARIOUS SOURCES OF INFORMATION FOR ENTREPRENEURSHIP DEVELOPMENT

Entrepreneurs need to be reminded from time to time about the basic functional areas, regarding their
enterprises so that they can be up to date and for them to be efficient and effective managers. In the light
of this, we have to recognize information as a veritable resource of entrepreneurship development.

Nature and Types of Information Required By Entrepreneurs

(a) Marketing Information
Whoever engages in a business, whoever embarks on entrepreneurial tasks will-knowingly or
unknowingly engage in marketing. We can state that whenever people engaged in business, they
also engage in marketing. Some aspects of marketing have over the years changed
dramatically. Selling alone was considered to be the actual marketing activity.
Quality products and services in the historical sense were no longer all that customers were looking
for. More manufacturers, more distributors and increasing buying power changed the marketplace. Globalization of markets set in, and new and more sophisticated management instruments
were needed to help manufacturers, distributors and entrepreneurs 10 stay in business and grow
with growing markets and all of this despite over-increasing competition and fighting over market
shares.
Any market primary consists of people and entrepreneurs need to concentrate his/her efforts on
one of the segment of the market in which the products have the greatest potential appeal. Good
market segmentation is a must for any successful marketing approach.

(b) Technical Information

In developing a business idea there is a need for potential entrepreneur to adopt a carefully
moderated and intelligent technical approach.
Planning is a process that never ends for business. It is extremely important in the early stages of
any venture when the entrepreneur will need technical information to prepare a preliminary
business plan. There are different types of technical information that may be part of any business
operation. This may include-designing of premises, products others may include nature of
products/services you will like to engage in. it may also includes tools and equipment you require
or materials needed for your production process. It may also be technology choice or advice on
location and premises.

(c) Information and Communication Technology (ICT)

Information and communication technology is very important source of information for
Entrepreneurship development as we know that the whole world is now a global village where
information about a product/service can be easily sourced. One can source through the internet and
find out the kind of hardware, software for the kind of business one want to venture into. It may be
packages on accounting and production or databases appropriate for the business.
EED Manual - Compiled By Oilmone

(d) Technology Is Constantly Changing the Demands of Consumers

Businesses use new technologies to produce new products and services. Entrepreneurs should
realize that new technological developments such as the internet and cell phones increase the
exchange of information and may have an effect on the operations of their business, Entrepreneurs
may not be aware of the nature and effects of all new technologies, yet, they must try to determine
technical developments which are likely to have the greatest impact on their business operations.

(e) Financial Information

Whether a business is small or large, owners and executives-must have financial information
relating to the type of business they want to establish. One of the most often overlooked areas of
information for entrepreneurship development is the financial information. Often regarded as a
back-office aspect of the business, the financial information plays a critical role for decision
making. Because decisions are only as good as the information on which they are based, establishing
a reliable data from business: environment must be a priority for all businesses regardless of size
and industry. It is only when you have proper financial information than an entrepreneur will know
the amount of capital require for the kind of business he is going into and ways of sourcing fat it.
Money plays a major role in an enterprise. At the beginning of any business, money is needed to
purchase the necessary tools/equipment, materials/supplies and other needs. To be competitive,
small business owners must prepare for all future events and market changes. One of the most
important
aspects
of
such
preparation
is
the
cash
flow
planning.
Failure to properly plan cash flow is one of the leading causes for small business failure.
Knowing some basic accounting will help you better manager of your cash flow.

(f) Legal Information

Business is the totality of the economic and commercial life of any nation. Business could be carried
on as a small, medium or large scale enterprise. It could also be carried on as domestic or
international business but you have to know the legal implication on each one of them. This is where
the legal information is very important. That is why small businesses and corporations alike employ
the likes of Sun Document Filings to take care of some of their legal paperwork. For example, if one
wants to establish a private company in Nigeria, it has to be a minimum of two (2) persons and
maximum of fifty (50) members and there are other documents required by the Corporate Affairs
Commission (CAC) Registrars of Companies before incorporation of any company. One also needs
to know about the copyright and Trade Mark Laws and also compliance with legal requirement with
regard to Environmental Impact Analysis (EIA).

EED Manual - Compiled By Oilmone

ROLES OF COMMERCIAL AND DEVELOPMENT BANKS IN THE PROMOTION OF

SMALL AND MEDIUM ENTERPRISES
The Commercial and Development Banks are contributing a lot towards the promotion of small and
medium enterprises especially in the various functions they carry out in their day to day operations. The
potential entrepreneurs are therefore to benefit from the functions and assistance rendered by these
financial institutions.

Financial Institutions Involved In Entrepreneurship Development

The Nigerian Industrial Development Bank (NIDB), the National Economic Reconstruction Fund
(NERFUND) and the Nigerian Bank for Commerce and Industry (NBIC) have been brought together to
form the Bank of Industry (BOI). On the other hand, the Family Economic Advancement Programme
(FEAP), Peoples Bank of Nigeria (PBN) and the Nigerian Agricultural and Cooperative Bank (NACB) have
become a single Bank, the Nigerian Agricultural, Cooperative and Rural Development Bank (NACRDB).

Bank of Industry (BOI)

The Bank of Industry (BOI) is owned by the Federal Government of Nigeria. This bank emerged from the
governments rationalization of some development Finance Institutions (DFIs) namely the Nigerian Bank
for Commerce (NBCI), Nigerian Industrial Development Bank (NIDB) and the Nigerian Economic
Reconstruction Fund (NERFUND).

The Bank of Industry has four subsidiaries from its merger:

Leasing Company of Nigeria (LECON)

NIDB Trustees Limited (NTL)
NIDB Consultancy and Finance Limited (NIDB Consult)
Industrial and Development Insurance Brokers (IDIB)

Types of Projects Financed by BOI

Projects in the areas where Nigeria has comparative advantage

Projects that engage in the efficient conversion of local raw materials into finished products
Ventures that can be least cost producers of good quality products that could be successfully
marketed locally and/or internationally.

Products and Services Deliverable by BOI

Medium and Long-term loans.

Working Capital Finance
Equity Financing
Management of dedicated funds
Loan guarantees
Co-financing
Investments in Corporate Boards

Business Development Services

Lease financing
Trusteeship
Stock Brokerage
Foreign Exchange Dealership
Insurance Brokerage

The huge SMIEIS funds currently accumulated by the Banks will help BOI fulfill its mandate. It is expected
that the banks contribution to the economy will grow stronger as the implementation of the economic
reforms progresses to widen the scope of needs for economic/business development financing.

EED Manual - Compiled By Oilmone

FUNCTIONS OF SUPPORT AGENCIES IN SMALL AND MEDIUM SCALE INDUSTRIAL

DEVELOPMENT
Some supportive agencies are established by the government at all levels to facilitate the promotion of
entrepreneurship in Nigeria. These agencies are established to cope with the dynamics of the economy
at a particular time. Their basic functions can be discussed under these roles.
1. Participatory
2. Regulatory
3. Facilitating

Participatory Agencies
The agencies in this category aid in providing goods and services which are best produced by the
government. They provide goods and services that are highly subsidized or goods produced below the
average cost. The services provided by these agencies are essentially to encourage entrepreneurship.
Examples are FERMA, Federal Road Maintenance Agency, public corporations such as PHCN, NEMA,
FAAN etc.

Regulatory Agencies
These are agencies established for regulating business. They are involved in inspection of facilities,
laboratory test of products, approval of facilities and product etc. They include the following:

Standards Organization of Nigeria (SON)

National Agency for Food and Drugs Administration and Control (NAFDAC).
National Drug Law Enforcement Agency (NDLEA).
Federal Environmental Protection Agency (FEPA)
State Environmental Protection Agency (SEPA).

Facilitative Agencies
These are agencies set up to facilitate the establishment and successful existence of small scale industries.
They are saddled with the responsibility of ensuring conducive environment for SMEs. Their function
may include specialized fund for SMEs or otherwise. In this category we have such institutions as:

The Industrial Training Fund (ITF)

Federal Institute of Industrial Research Oshodi (FIIRO)
Bank of Industry (BOI)
The Industrial Development Centre (IDC)
Universities and Polytechnics
Nigerian Export Promotion Council (NEPC)
The National Directorate of Employment (NDE)
National Poverty Eradication Programme. (NAPEP)
Small and Medium Enterprise Development Agency of Nigeria (SMEDAN)
EED Manual - Compiled By Oilmone

Industrial Association
Government has also established some industrial association to foster industrial harmony. These
associations were created by law or decree at different times.
They include:
1. The Manufacturers Association of Nigeria (MAN)
2. The National Association of Small Scale industrialists (NASSI)
3. The Nigerian Employers Consultative Association (NECA).
4. The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture
(NACCIMA).
Others
Federal Government especially is in collaboration with some international bodies to promote small and
medium scale industries, just as they do in other sectors, their functions cover funding, research and
development etc. these bodies include:

The World Bank

United Nations Childrens Fund (UNICEF)
United Nations Industrial Organization (UNIDO)
African Development Bank (ADB).

EED Manual - Compiled By Oilmone