WOLLO UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

CHALLENGES AND PROSPECT OF ENTREPRENEURIAL

ACTIVITY IN SMALL SCALE ENTERPRISE (IN CASE OF KOBO
TOWN KEBELE 02).

A SENIOR ESSAY SUBMITTED TO THE DEPARTMENT OF

MANAGEMENT OF BACHELOR OF ART (BA) DEGREE IN
MANAGEMENT.

PREPARED BY:-ALEMU CHANIE

ID NO CBER/268/05

ADVISOR: MEKURIA.B (MBA)

JUNE, 2015
 DESSIE, ETHIOPIA

Acknowledgment

First and for most I would like to tanks my almighty God for this indescribable
gift in every part of my life.

Secondary, May special thanks extend to my advisor Mekuria Belayneh, who

helps me by providing his constructive advice comments during preparation of
the research.

Thirdly I would like to thank my father and mother who help me both
financially and morally in all my school life till now.

Lastly, but least I would like to thanks my sister Fre Amare who helps me by
supported financially and morally until the end of the research preparation.

THANK YOU GOD

 Abstract

The research would conduct under the title of challenges and prospects of
entrepreneurial activity in small scale business enterprise. The researcher
focuses on identifying and evaluates the main problems associated with small
scale enterprise business. The objective of the study is to examine and evaluate
the main challenges and prospect of small scale business enterprise. The data
collection methods are both primary and secondary sources. The data
collection is primary data through questionnaire and interview and the data
collection is secondary by obtaining form different documents of the
organization and annual report of the government The importance of this paper
after the completion of the study would enables to information concerning in
the entrepreneurial activity by Appling necessary to investigate and small
enterprise economic growth it the source of peace and stability of this place.
The study would limit in kobo town kebele 02. The research would conduct by
using stratified and simple random sampling techniques method, from the total
population of 283 to take 74 or 26% of each sample. the analysis part of the
study was mostly through descriptive and present on the base of the
percentage, by table and the finding in the small scale business enterprise
challenges and prospects/or problems. Finally this research includes,
summary of the paper conclusion and recommendation.

Table of content
Title
page

 Acknowledgment-----------------------------------------------
 Abstract----------------------------------------------------------
 Table of content------------------------------------------------
 List of table-----------------------------------------------------

CHAPTER ONE

1. Introduction -----------------------------------------------------
1.1 Background of the study----------------------------------
1.2 Statement of the problem ----------------------------------
1.3 Objective of the study --------------------------------------
1.3.1 General objective -----------------------------------------
1.3.2 Specific objective --------------------------------------------
1.4 Significance of the study --------------------------------------
1.5 Scope of the study -----------------------------------------------
1.6 Limitation of the study ------------------------------------------
1.7 Research methodology -----------------------------------------
1.7.1 Description of the study area--------------------------------
1.7.2 Research design ----------------------------------------------
1.7.3 Target population --------------------------------------------
1.7.4 Data type and source----------------------------------------
1.7.5 Method of data collection ------------------------------------
1.7.6 Sample size and sampling technique------------------------
1.7.7 Data analysis method------------------------------------------
 1.8 Ethical consideration---------------------------------------------
1.9 Organization of the paper ---------------------------------------
CHAPTER TWO
2. Review of related literature --------------------------------------------
2.1 The concept of entrepreneurship-----------------------------
2.2 Brief history of entrepreneurship-----------------------------
2.3 The entrepreneurial process------------------------------------
2.3.1 Identify and evaluated the opportunity -------------------
2.3.2 Develop business plan -------------------------------------------
2.3.3 Determine the resource require ----------------------------------
2.3.4 Manage the enterprise---------------------------------------------
2.4 Form of business organization --------------------------------------
2.5 Types of entrepreneurial business ----------------------------------
2.6 Characteristics of entrepreneurs------------------------------------
2.7 Importance of entrepreneurs ship-----------------------------------
2.8 Functions of entrepreneurs -------------------------------------------
2.9 Role of entrepreneurs -------------------------------------------------
2.10 Advantage of entrepreneurs -------------------------------------------
2.11 Disadvantage of entrepreneurs ----------------------------------------
2.12 Entrepreneurial challenges ---------------------------------------------
2.12.1 Challenges faced by minority and women entrepreneurs---
2.12.2 Challenges faced by family business --------------------------
2.12.3 Challenges faced by environment -----------------------------
CHAPTER THREE
3. Data presentation and analysis ---------------------------------------------------
3.1 Characteristics of respondent ----------------------------------------------
3.2 Researches for starting the business -------------------------------------
3.3 Typed of business ------------------------------------------------------------
3.4 Management of the business ----------------------------------------------
3.5 Reason for choosing particular activity ---------------------------------
3.6 Willingness to introduce new idea---------------------------------------
 3.7 Source of idea used to establish new business -------------------------
3.8 Source of capital for small scale enterprise------------------------------
3.9 Advantage of government bodies -----------------------------------------
3.10 The interval period of training -------------------------------------------
3.11 The agreement of salary ---------------------------------------------------
CHAPTER FOUR
4. Summary, conclusion and recommendation -----------------
4.1 Summary ---------------------------------------------------------
4.2 Conclusion --------------------------------------------------------
4.3 Recommendation -----------------------------------------------
Reference
Appendix
 List of table

Table 3.1 gender ---------------------------------------------------------

3.2 Marital status ------------------------------------------------------

3.3 Age distribution -------------------------------------------------------

3.4 Level of education ----------------------------------------------------

3.5 Reasons for starting this business ----------------------------------

3.6 Types of business -------------------------------------------------------

3.7 Problems they face to start the business -----------------------------

3.8 Management of the business ------------------------------------------

3.9 Reason for choosing this particular activity --------------------------

3.10 Willingness to introduce new idea------------------------------------

3.11 Source of idea used to establish new business ----------------------

3.12 major source of capital for small -------------------------------------

3.13 advantage of government bodies ------------------------------------

3.14 government support ---------------------------------------------------

3.15 The importance of enough salary-------------------------------------

3.16 To express monthly income------------------------------------------

3.17 government support towards the business -----------------------

3.18 access too training for small scale enterprise ------------------

3.19 The interval period of training ------------------------------------

3.20 The agreement of study ------------------------------------- -----

 CHAPTER ONE

Introduction

1.1 Background of the study

Entrepreneurship development and promotion of self employment
continue to drive the growth developing economical as both the option
have potential to resolve the issue un employment and under
employment significantly, entrepreneurs of variation house across the
length and breadth of the country, receive facilitation from the state in
the form of friendly regulation and from the rest by way of supporting
environment. it is the birth of the idea and the ability of individual to
who has that idea take attendant risks that give rise the enterprise
)pujari, 2009).
Entrepreneurship is the most often relate to the creation of new
business. However entrepreneurship and entrepreneurial dynamic is as
the relevant to the creation of not for profit initiative .It is about
generating ideas organizing and hands on action that can have different
effects. Entrepreneurship can mobile people resource and innovative
practices and are fundamental to they we organize societies. In this
courses entrepreneurship. Both economical aspect of business based
entrepreneurship and aspect of combing economically social aims in
sustainable development are elaborated on this course. The context of
developing countries brings a focus on issues related to economic
development and poverty alleviation economics interaction and emerging
market as well as development of both social and political infrastructure
beyond what commonly is elaborated western dominated (Mohanty,
2007).
 Entrepreneurs play pre dominate role in accelerating the socio economic
development of account. They are regarded as the nation builders and
wealth creators. They are the change agents. Who incites economic
activity to create wealth? They under take the business inciate employee
themselves in the business and open up employment for others. There
for the role of entrepreneur is fundamentals importance to country like
India (Mohanty, 2007).
When the town problems of poverty and unemployment coexist. But in
today most of the small and micro enterprise business affected by
different problems, then the problem and challenges are like lack country
like India, (Mohanty, 2007).
When the twin problems of poverty and unemployment coexist. nut in
today most of the small and micro enterprise business affected by
different problems, then the problem and challenges are like lack of
working capital, because of the increasing of interest, shortage of row
materials, un fair load tax from the government, lack of promotion
medias, another problems are most of small and micro enterprise
business dominated by men enterprise then women entrepreneurs.
(Mohanty, 2007).
1.2 Statement of problem

Many researchers indicate that every business affected by external and internal
factors in the world. In economic and business fluctuating interest rate,
interrupted suppliers, labor market trends, inflation, government regulation
and unstable finical market. A similar rise in producer price, will inflate costs.
However the smaller enterprise is far more susceptible to these forces then
large firm. A major to manufacturing may be able to find alternative financing.
When interest rates soar, but the local toy source may watch in profit
evaporate in precipitous debt obligations from financial stand point. Most small
business really on commercial loans tied to premium interest rates. small
change in economic conditions results in huge change in profit smaller
business that are relatively debit free operate still operate in more in tenses
price sensitive environments most cannot afforded firm price nor can they
substically reduce cost(Holl;, 2006,). Ethiopia backwardness is an indicator of
its low level of entrepreneurship developments. the economic structure also
shows as that entrepreneurship is in its infant stage that requires prior and
immediate actions of all stakeholders to make it more dynamic for the
realization of Ethiopia renaissance development has been so slow that there is
a lot of human resource wastage in Ethiopia both ruler and urban area show
before (Weriotaw, 2010).

In kobo town kebele 02, the major challenge of micro and small scale
enterprise are in ability to be competitive develop their business plan and leads
to them direct their business by following a re- specified business plan, lack of
skill full performance and successiveness of the enterprise by adopting
contingency approach of the working environment. Then the studies try to
asses and answer for the following research question.

- What are the major challenges that are associated with entrepreneurial
activities of the enterprise?
- What is the future prospect entrepreneur activity up on its expansion?
- What are the entrepreneurs processes that an entrepreneurial must have
adopt/follow/to run the business?
- What are the opportunities for entrepreneur in each type of business
activities?
1.3 Objective of the study
1.3.1 General objective
The general objective of the study was to examine the challenge and
prospect of the entrepreneurial activities in relation to small business
enterprise in to kobo town kebele 02.
 1.3.2 Specific objective
- To identify the opportunities for entrepreneur in each type of business
activities.
- To identity the major challenges associated with entrepreneur activities
of the small business.
- To state the future prospect of entrepreneurial activity in providing un
employment reduction.
- To identify the entrepreneurial process that an entrepreneur must have
adopt follow to run the business.
1.4 Significance of the study
The study would be enable to full information concerning in the
entrepreneurial activities by applying the necessary to investigation and
small scale enterprise economic growth was the source of peace and
stability. The economic interest of the public have pulling or pushing the
impacts for new policy and majors to be taken by governments and
creative local inputs for domestic production needs more attention in the
coming decades to make Ethiopia more competitive in global economy.
The necessary investigation and have some contribution in identify the
challenges and seeking entrepreneur sedition and also it has the
following benefits.
- It will be help the owners of the business how run the business.
- It can serve as a data source for others research who conducts research
in the same topic.
- .It helps the research to gain experience to make other research.
1.5 The scope of the study

The study would be limit in kobo town kebele 02, the study would assess the
challenges and prospects of small scale business enterprise enhancing the
employee would fare and challenge that small scale business enterprise may
face.

1.6 Limitation of the study

During the preparation of this paper the researcher was faced the following
problems.

- Lack of knowledge and past experience about the research.

- Respondents were not responded an open ended questions efficiently.
- generally un willingness of respondents

1.7 Research methodology

1.7.1 Description of the study area

Kobo one of the wereda in the Amhara region of Ethiopia located in the north
east corner of the semine wollo zone, kobo is bordered on the south by Logia
River, with separates it from habru woreda and Gubalafto woreda, on the west
be Gidan, on the north by Tigray region and on the east Afar region. Kobo town
have four kebeles. it far from our capital city of Addis Ababa 570km and
170km from Dessie Kobo town population is estimated 33,142 censes on 2007
nations from this total population 7,450 live in kebele 02.

1.7.2 Research Design

The study would use descriptive type of research design, it describe the
challenge and prospect of small business enterprise activity and aim to
minimize the challenge of small scale business. Because of this type of
techniques is easy to transfer the data and understand.

1.7.3 Target population

The target population of the study would be the owner of small business
enterprise and employees in kobo town kebele 02. The total population of the
owner of small scale enterprise and employees are 283 in 2007 annual report
of kebele 02 Administrative office.

1.7.4 Data type and source

The study would use different source of data form. Both primary and secondary
data source primary data source would include those data which collect from
questionnaire, interview and observation from the owner of small business and
employee. Secondary data source would use include organization manual,
reference book, Annual report of government, internet and different published
and unpublished document.

1.7.5 Method of data collection

The research would employ different methods of data collection. Thus type of
methods structured and semi structured questionnaire and interview. The
researcher would make questionnaire distributing to the owner of the business
and employee of the small scale business. The researcher would prepare both
open and close ended questionnaire.

1.7.6 Sample size and sampling technique

The study would be both stratified and random sampling techniques. The
researcher obtains stratified samples by dividing the population in to
subgroups called strata. Because the small scale business enterprise
employees were sufficiently large in numbers. According to various
heterogeneous characteristics and selecting member from each stratum for the
sample. and random sampling technique are select by using chance method or
random numbers it is said to unbiased sample, then from the total population
of 283 taken to 74 or 26% each of the business group.
Formula n= N =283 =74
1+N (error)2 1+283(0.1) 2

No Type of business n=(Nn) Sample

N
1 Manufacturing 40 10
2 Construction 74 19
3 Trade 91 24
4 Service 80 21
5 Total 283 74
Source Bluman, (2004), elementary statistics.

1.7.7 Data analysis method

After collection of the necessary data from different sources, the researcher
would use different technique to analysis; the researcher use table, arrange
and organize the relevant information from both primary data source and
secondary data sources and the table with the application of percentage to
analysis the collect of data finally after data analysis and effectively process the
data should be presenting and interpreting by using percentage and table with
in their description of the research.
1.8 Ethical consideration
In conducting the study researcher would like to gather information from
the respond and by keeping security. The researcher would not reveal the
business owners and the government. The researcher would secure
moral and ethical value of the business owners, population and the
information is require for academic purpose only.
1.9 Organization of the paper
The paper where organizing under for deferent chapter by which first
chapter deals with the introduction part reflecting what is the research is
about through describing background of the study, statement of the
problem, objective of the study, significance of the study, methodology of
the study scope and limitation of the study.
The second chapter presents the review of related literature on the
characteristics and challenges small business.
 The third chapter would describe analysis and interpretation of data that
would be connected personal interview and other survey mechanisms.
The forth chapter has summary, conclusion and recommendation of the
research.

CHAPTER TWO
2. Literature review
2.1 The concept of entrepreneurship
Entrepreneurship is the concept it is defined differently by different authors at
different period. According to werotaw Bezabih entrepreneurship is one of the
four main economic streams. The four sources of employment opportunity and
prosperity include land, human power, capital and entrepreneurship.
Entrepreneurship is the prosperity of mind of that risk taker who are able to
combine these resources in usual ways to create jobs and wealth while
entrepreneurship is the propensity of mind of professional employee managers
or leaders to create more achievement in the already existing business firm and
or organizations as well as institutions. Entrepreneurship is the process by
which individuals pursue opportunities without regard to resources they
currently control the essence of entrepreneurial behavior is identifying
opportunities and behavior can be accomplishes by either and individual or
group and typically requires creativity, drive, and willingness to take risks
(barringer, 2006).
Entrepreneurship is the process creating something new with by value by
devoting the necessary time and effort assuming the accompanying financial,
psychic and social risk, and receiving the resulting rewards of monetary and
personal satisfaction and independence (p.peters, 2009).
Entrepreneurship is defined as a strong and positive orientation to wards
growth in sales, income asset and emplacement. But the concept of
entrepreneur is different from entrepreneurship according to L.Greene
entrepreneur is a people who own operate and take the risk of a business
venture. They are engages in entrepreneurship, the of running a business of
one’s own entrepreneurs come from al types of background and create all kinds
of business. Entrepreneurs try to identify the needs of the market place and
to meet that need, by supplying a service or product.
The development of the theory of entrepreneurship parallel to a great extent the
development of the term itself. The world entrepreneurs are French a literally
translated, means “between take” or go between”.
2.2 Brief History of Entrepreneurship
Earlier period
As ago between he had to ship a contract with a money person to sell his good.
in the contract merchant adventure took a loan at 25% rate including
insurance capitalist was the passive risk bearer and merchant adventure to the
active role in trading bearing all physical and emotional risks when the
merchant adventure successfully sold the goods and completed the trip the
profits were divided with the capitalist taking most of them (up to 75%) while
the merchant adventure settled for the reaming 25% macro polo ago-between
was in Italy.
Middle age
Entrepreneur used to describe as an actor and person who managed large
production project. Individual did not any risk because all the resources used
to provided by the government of the country all an entrepreneur should do is
to manage it a typical entrepreneur in the middle age was the priest. the
person in charge of great architectural work, used to build castles and
fortifications public building abbeys and cathedrals.
17th century
The connection of the risk with entrepreneurship developed in the 17th C. an
Entrepreneur was a person who entered in the contract with the government to
perform a service or to supply stipulated product.
Johan low that a French man was one of the entrepreneurs in the period. The
founder of Royal bank of France and the missipp. Company which had an
exclusive franchise to trade between French and other new world. Monopoly on
French trade eventually led to collage of the company. Richard cantilena, A well
known English economist at the beginning of the 17th C understood lows
mistake he viewed the entrepreneur as the risk taker objective that merchant
farmers,(craftsmen, and other sole properties buy at a certain price and sell at
an uncertain price, therefore operating a risk.
18th Century
In the 18th c person with capital was differenced from the one who needed
capital. The entrepreneur was distinguished from the capital provider one
reasons for this differentiation with the industrialization occurring throughout
the world.
Eliwhitency: was an American inventor best known for inventing the cotton in
this was one of the key inventions of the industrial revolution.
Thomas Edison: - the inventory of many inventions he was developing us
technologies and was unable to finance his invention himself he was capital
was an entrepreneur) not provides (venture capitalist).
19th century
In the late 19th c and early 20th c entrepreneurs were frequently not
distinguished from manager and were viewed mostly from an economic
prospective. The entrepreneur organizes and manages an enterprise for
personal gain. The material consumed in the business for the use of land for
the service he employees and for the capital he requires.
Middle 20th century
The function of entrepreneurs is to recreate or revolutionize the pattern of
production by introducing, invention. Innovation the act of introducing some
new ideas in one of the most difficult task for the entrepreneur
(www.Google.com)

2.3 The Entrepreneurial process

The process of pursuing and a new venture is embodied in the entrepreneurial
process, which involves more than just problem solving in a typical
management position. An entrepreneur must find evaluate and developed an
opportunity by overcoming the forces that resist the creation of something new,
the process has four distinct phases.
2.3.1 Identify and evaluate the opportunity

Opportunity identification and evaluation is a very difficult task most good

business opportunities do not suddenly appear, but rather result from an
entrepreneur’s a leeriness to possibilities or in some cases, the establishment
of mechanisms that identity potential opportunities.)
2.3.2 Develop business plan
A good business plan must be developed in order to exploit the defined this is a
very time consuming phase of the entrepreneurial process. An entrepreneurial
usually has not prepared a business plan before and does not have the
resource available to do a good job. A good business plan is essential to
developing the opportunity and determining the resources required, obtaining
the resources, and successfully managing the resulting venture.
2.3.3 Determine the resource requires
The entrepreneur must determine the resources needed for addressing the
opportunity. This process starts with an appraisal of the entrepreneur’s
present resources. Any resource that are critical need to be difference from
those that are just help full care must be taken not to under estimated the
amount and variety of resources needed. The entrepreneur should also asses
the down she risks associated with insufficient or appropriate resources.
2.3.4 Manage the Enterprise
After resources are acquired, the entrepreneur must use than to implement the
business plan. The operational problems of growing enterprise must also be
examined.
This involves implementing a management style and structure, al well as
determining the key variable for success a control system must be established,
so that any problem areas can be quickly identities and resolved. Some
entrepreneurs have difficulty managing and growing the venture they created
(Mohanty, 2007).

2.4 Forms of business organization

It is necessary for the entrepreneur to know the implication of setting up an
enterprise as a legal acceptable form of business, organization and what is
would mean in terms of regulatory compliance. Many small entries take to sole
proprietor ship or partnership in the beginning and gradually migrate to other
forms with the increase in investment and the interest of other investors in
higher enterprise. This form of business organization includes many forms
such as sole propertorship, partnership, corporation and other forms of
business like private company a public company. G.Govin, (2008).
2.5 Types of entrepreneurial business
There are many opportunities for entrepreneurs in each type of business.
1. Manufacturing business actually produce the products they sell using
resources and supplies, they create everything from automobiles to
paper.
2. Whole sailing business: sell product to people other than the final
customer for example a whole seller supplies your logical granting card
store with items such as cards and wrapping paper
3. Retailing business: sell products directly to the people who we or
consume them
4. Service business: sell service rather than products they include hotels
hairdressers and repair shops.
5. Agricultural business: generate fresh produce and other farm product
such as wheal
6. Mining and extracting business:- take resource like goal out of the
ground so they can be consumed.
2.6.1 Characteristics of Entrepreneurs
Researcher has identities several characteristics that disguised
successfully entrepreneurs from those that fail
1. successful entrepreneurs are independent: they want to make their
own decisions and so something they enjoy
2. Successful entrepreneurs have determination and perseverance
entrepreneur persist through hard time until goal are met
3. Successful entrepreneurs are self confident entrepreneurs make all
the decisions they must have the confidence to make choices a lone
and bounce back from a poorly made decision
4. Successful entrepreneurs are goal oriented: they know what they want
and they are able to focus on achieving it
5. Successful entrepreneurs have a need to achieve and to set high
standards for themselves: they are constantly setting challenging new
goals.
6. Successful entrepreneurs are relative: they think of new ways to
market their business and are always looking for new solutions to
problems.
7. Successful entrepreneurs are able to act quickly: they are not afraid
to make quick decisions when necessary, which helps them, beat
their competitors.
2.7.2 Importance of entrepreneurship
Economic development essentially means a process of upward
changes where by the real per capital income and job opportunities of
a country increases over a period of time entrepreneur’s incites and
sustain the process of economic development and growth and in the
following areas.
1. Innovation: it is a process of creating new things, changing, the
existing ways, by new ones, transforming and revolutionizing
production, distribution of products and service.
2. Capital formation: entrepreneur can mobilize the idle saving of the
public through investment and this process increase the rate of
capital return, profit is created for investment and reinvestment.
3. Improvement in per capital income: entrepreneurial ventures size
and exploit opportunities. They convert the latent and idle
resources like, land, labor and capital in the national income and
wealth in the form of goods and services.
4. Creation of balanced regional development: the role of
entrepreneur is Para mount important in bringing about
balanced regional development. Entrepreneurial activities
help to remove regional disparities in economic development.
They set up new industries business in background areas.
5. Improvement in living standards: entrepreneurs set up industries
and business firms which remove scarcity of essential commodity
and introduce new production of good on mass scale. in small
scale, in small scale sector, entrepreneurship helps to improve the
standard of life of the people by of firing goods and services at
lower cost and increase in consumption..
6. Socio-political stability: it is a result of many factors, of which the
main one is the national stage of entrepreneurship development.
Entrepreneurs play an important role in bringing about social and
political stability coulter, (2008).
 2.8 Functions of Entrepreneurs
 They create something new, something different. they search for
change, respond to it old export it
 They engage in assessing the potential for the entrepreneurial
venture, and then dealing with startup issue.
 They gather information, identify potential opportunities and
access competitive advantages.
 They manage three things processes, people discoid and growth
In managing people, entrepreneurs are concerned with things such as
selecting and hiring apprising and training, motivating, managing
conflict, delegating tasks and being an effective leader.
In managing growth entrepreneur thing like developing appropriate
growth strategies dealing with crises exploring ways to finance growth
determining the ventures values p.peter, (2009).
2.9 Role of entrepreneurs
Entrepreneurs play a significant role socio-economic development of a
country. Economic advancement, diversification, growth and
structural changes greatly depend up on entrepreneurial
development. Industrially developed countries, entrepreneurs have
contributed a great deal to this economic progress.
The role entrepreneurs thus can be grouped in to seven
1. Role of entrepreneur as an innovator in economic growth
 They boring about new combination
 They use potential technique cal Knowles for continues
technological progress
 Entrepreneurs emphasize on purpose full life goals and innovation
 Entrepreneur implements mechanical skills.
2. Role of entrepreneurs implements mechanical skills
An entrepreneurship is purposeful activity indulged in initiating;
stimulating promoting and mandating economic activity for
 production and distribution of goods and services, the person behind
these movements is a critical factor as well as integral component of
socio-economic transformation
The role of entrepreneurs in this area can be shown
 Establishing ting micro and small scale enterprise
 Giving emphasis up on village and cottage industries
 Self employment opportunities can be provided at the gross root
levels
3. The role of entrepreneurs in utilizing surplus labor force industrial
activities
4. Employment argument
5. Role of entrepreneurs: in complementing and supplementing
economic growth entrepreneurs initiate increase and sustain
economic growth in the following main ways.
- In generating employment opportunities, both direct and indirect
through establishment of small scale enterprises
- In capital formation and up grading skill of human capital interims
productivity.
- In accelerating economic growth through their efficiency driven action.
6. Role of entrepreneurs in bringing about social stability and
balanced regional development of industries. Entrepreneur as a
catalyst of change tries to bring about social stability in the
following ways.
 Absorption of work force in industries
 avoiding background and poverty
 Glorification of self help
 checking expansion of monopolies
 equitable distribution of income in both rural and urban area
 Creation of social infrastructures.
 7. Role of entrepreneurs in exports promotion and important
substitution for the development (Mohanty, 2007).
2.10 Advantages of entrepreneurs
- Excitement: compared to being regular employees entrepreneurs enjoy mach
excitement beginning form the planning stage of the business up to
development and realization. Their seekers obviously love being entrepreneurs
as they are exposed too much risk you shall never forget, that all business
risks that you agree on taking should be calculated.
- Salary potential: most people who are employed generally feel that they are
not being compensated for the work they do. In addition they must follow the
salary structure. Set by their employees entrepreneurs on the other hand earn
month that is common surety to their effort.
- Flexibility: having control of work schedules and commitments makes the life
of these entrepreneurs enviable. They are able to take vacation any time and
spend much quality time with their families.
Independence: for people who love the idea of not being answerable to anyone
else but those selves becoming entrepreneurs would surely be wonderful. They
would be able to make decisions without the pressure of getting tired. (Clark,
2005).
2.11 Disadvantages of entrepreneurs
- No regular salary: when you start a business you should be prepared to leave
behind the security of having a paycheck each month even success a full
entrepreneurs experience lean months when all financial resource, are being
taken up by the new business
- Work Schedule: although they have the luxury of a flexible schedule,
entrepreneurs also make sacristies especially during situations that require
them to work longer hours. Unlike regular employees who are not worried to
mush about the status of the business entrepreneurs must make sure that
everything is going well
Administration: because they own the business, all major decisions are made
by entrepreneurs. This is quite a burden and handing such responsibility is
quite difficult. Every deisms directly affects the future of their business and
avoiding costly mistakes is imperative (Clark, 2005).
2.12 Entrepreneurial challenges

The process of existing the entrepreneurial venture should be approached as

carefully as the process of launching it. It you are selling the venture on
appositive note, you want to realize the value you have built in the business. it
you are selling the venture because of decline performance you want to
maximize the potential return. The next topic we want to look at involves some
of the challenges facing minority, women owned business and entrepreneurial
environment.
2.12.1 Challenges faced by minority and women entrepreneur
The main challenges minority women entrepreneurs face is getting the undoing
they need to start and growth their business. Access to capital is a serious
issue for minority and women entrepreneurs. A study by the federal reserve
system of small business financing patterns found that minority small
business owners have an externally hard time getting credit.
Another challenge that women entrepreneurs particularly, face is the conflict
between work and family although this issue can and does, a rise for male
entrepreneurs also, it’s especially acute for women because many child reading
and family responsibilities full on them.
Finally, minority and women entrepreneurs face the challenges of managing
business growth successfully, finding and keeping qualified employees, and
keeping up with technology and other market place changes; these are changes
that all entrepreneurs face.
2.12.2 Challenges faced by family Business
Although family business are an integral part of our economy they face two
major challenges, the complex inter relationships that arise, and management
succession.
From the management prospective you might be considered about the effect of
the hiring on other non family employees, each of these prospective is valid,
but which takes precedence. The second major challenges facing family
business is management succession. Studies of family firms have shown that,
on average only 30% of the family business service to the second generation
and only 10% makes it to the third generation.
Even though complex inters relationship and management secession pose
challenges the family business entrepreneur there are ways to make it look
(coulter, 2003).
2.12.3 Challenges faced by environment
According to versant Desa entrepreneurship environment refers the various
sides with in which enterprise (micro, smaller, medium and big) and others
have to operate. Entrepreneurship in the enterprising process. it therefore,
inflicted by the environment. By large entrepreneurship with all its important
discussed above, it inflicted by the environment. That entrepreneurial
environment includes political, economic social, technological, legal
environment and cultural environment entrepreneurship is not influenced by a
single factor but is the outcome of the interaction combination of varicose
environmental factory like the ones listed above. (Coulter, 2003)
 CHAPTER THREE
Data presentation and analysis
Introduction
This chapter to present and analyzed the primary data that obtained from
small scale enterprise owners and employees of in kobo town kebele 02. the
primary data collected from questioner of 74 owners and employees and
distribute to the selected sample to assess the problem and prospect of
entrepreneurial activity small scale enterprise among this questioner of the
total 74 questioner 67(91%) of there were return and the remain 7(9%) are void
personal information in this point of view the researcher wonted to know the
background of respondent in terms of age gender marital status level of
education and work experience.
Table 3.1 Characteristics of respondents

No Gender Respondent Percentage

Male 38 57
1 Female 29 43
Total 67 100
Source from questionnaire, 2015
As shows that the above table 3.1, 57% of respondent replied that are males,
43% of are females. This indicates that almost of the owners are males’ means
the participation of female in this activity are lower than males.
Table 3.2 Marital status

No Marital status Respondent Percentage

Married 25 37
2 Un married 42 63
Total 67 100
Source from questionnaire, 2015
According to the above table 3.2, 63% of respondent is replied that single
/unmarried/ 37% of the respondents to response is married.
There for the majority of the respondents is Unmarried or single.
Table 3.3 age distribution
No Age Respondent Percentage
<21 18 27
3 21-34 24 36
34-48 20 30
>48 5 7
Total 67 100
Source from questionnaire, 2015
According to the above table 3.3 expression 27% of respondent are found below
21, 36% of respondent are found between 21-34, 30% of respondent are found
between 34-48, and 7% of respondent are found greater than 48. This shows
that is greatest share constituted by adult age next to them the young owner
and small share is constituted the middle age level. And the small number of
about 48 year to participate this activity. So it indicates that the most of the
owners of the enterprise is adult individual that have alternative future
prospect of the sector.
Table 3.4 level of education
No Level of education Respondent Percentage
High school completed 13 19
Diploma 15 22
4 Elementary completed 7 11
Degree 16 24
Certificate 12 18
Illiteracy 4 6
Total 67 100
Source from questionnaire 2015

The above table 3.4 shows that 19% of respondent said that high school
completed, 22% of responded diploma, 11% of respondent are elementary
completed, 24% of respondent are degree, 18% of respondent are certificate
and 6% of respondent are illiteracy. This indicates the most of the owner are
degree and diploma, but high school completed and certificate holders are
small number, but greater than elementary completed and illiteracy. The
number of elementary completed and illiteracy are few in numbers. So that the
government should have to encourage the participation of illiteracy and
elementary completed in small scale business enterprise.

Table 3.5 reasons for starting this business

No When you start running the Respondents Percentage

business?

5 I have no alternative income 20 30

 source?
To be independent 25 37
Self help and family support 16 24
To keep busy 6 9
Total 67 100

Source from questionnaire, 2015

The above table 3.5 replied that 30% of the respondent is I have no alternative
income, 37% of respondent are to be independent, 24% of the respondent are
self help and family support and 9% of respondents are to keep busy. This
shows that the respondent are response most of the business owners and
initiate to started these business they to be independent.

Table 3.6 Types of business.

No What type of business Respondent Percentage
running?
6 Case and restaurant 25 37
Cobblestone work 15 22
Furniture and metal work 10 15
Shop 17 26
Total 67 100
Source from questionnaire, 2015
According to the above table 3.6 expression 37% of and 26% respondent most
the business owners and employees are responded cafe and restaurant and
shop respectively, 22% of respondents are cobblestone work and 15% of
respondent are furniture and metal work. From this a few number of furniture
and metal work participation the business.
Table 3.7 problems they face to start the business.
No What was the problems you face Respondent Percentage
to start the business?
Financial problem 28 42
Lack of skills 18 27
7 Lack of partners that can do the 15 22
business
Lack of Coordination lack of 6 9
work place
Total 67 100
Source from questionnaire, 2015
As shows that the above table 3.7 can see that the main problems of small
scale enterprise. is financial problems to conduct the business are respondent
42% of respondent are responses to goes to lack of skill 27% of respondent are
response, lack of pastern that can do the business and the remaining 9% of
respondents response lack of coordination and lack of work place and so on
there for the majority respondent are faced financial problem and lack of skills.
Then the government should be provided financial and other necessary
materials.

Table 3.8 management of the business

No How the business managing? Respondent Percentage
8 By one individual 35 52%
By two or more individual 32 48
Total 67 100
Source from questionnaire, 2015
The expression of the above table 3.8 52% of the enterprise managed by one
individual and the remaining 48% of the small business are managed by two or
more than two individuals. This shows that the majority of the business is
managed by one individual.
Table 3.9 reason for choosing this particular activity
No What did you choose this particular Respondent Percentage
activity?
9 Due to lack of money 14 21
It was family run business 20 30
Relevant prior to work experience 8 12
Highly competitive with others 25 37
Total 67 100

Source from questionnaire, 2015

According to the above table 3.9 expression 21% of respondent are response
due to lack of money, 30% of respondents it is family run business, 12% of the
respondent to response relevant prior to work experience, 37% of the
respondent to response highly competitive with other. This shows that the
majority owners of the business choose these particular activities are highly
competitive with the other business.

Table 3.10 willingness to introduce new idea

No Are you willing to introduce Respondent Percentage

new idea that is not used by

Others?
Yes 42 63
10 No 25 37
Total 67 100
Source from questionnaire, 2015
According to the above table 3.10 shows that 63% of respondent to
response yes, 34% of the respondent to response no. Therefore the
majority response have willingness to introduce new idea that are not
used by other and the reaming respondents they are willingness to
introduce new idea that is not used by others.

Table 3.11 source of idea used to establish new business.

No It yes no which source of new Respondent Percentage
idea did you use establish this
business?
Customer 22 33
Government rule and 25 37
11 regulation
Existing business 15 22
By come across 5 8
Total 67 100
Source, from questionnaire, 2015
The table 3.11 shows customer used as a source of idea to establish new
business constitute 33% government rule and regulation 37%, existing
business constitute 22% and by come across 8% of respondents. This
shows that the majority of the enterprise owners used as idea to
establish new business government rule and regulation, followed by
customer from this by come across is some importance source for
establishing new business. The majority small scale enterprise idea
sources are government rule and regulation and customer.
Table 3.12 major source of capital for small scale enterprise owner.
No What is the major source of Respondent Percentage
your capital?
Own saving 13 19
Sale of asset 20 30
12 In heritance - -
Loan from bank 34 51
Total 67 100
Source from questionnaire, 2015
The table 3.12 shows that 19% of the respondent are own saving 30% of
the respondent are sale of asset, 51% of the respondent are loan from the
bank, and no respondent to responses are in heritance. this shows that
the largest numbers of respondent have owners of the capital was loan
from bank, however, the respondent there is no responses any in
heritance capital source.
Table 3.13 the advantages of government bodies.
No Do you get any advantage from Respondents Percentage
government bodies?
Yes 15 22
13 No 52 78
Total 67 100
Source from questionnaire, 2015
According to the above table 3.13 shows that 22% of respondent to
response yes, 78% respondent to response no therefore the majority
response no gets any type of advantage from the government bodies.
it question no 1.13 some respondents are yes most of the respondents
says that sometimes the government bodies supported by giving advice
and to prepare business plan create the opportunity to be competitive in
the market.
Table 3.14 government support
No How the governments support your Respondent Percentage
business?
By creating opportunity to promote 7 10
your conduct and service
14 By creating opportunity to be 16 24
competitive in the market
By facilitating you to participation 20 30
innovative activity
No supported from the government 24 36
Total 67 100
Source from questionnaire, 2015
According to the above table 3.14 shows that, 10% of the responding are
by creating job opportunities to promote your conduct and service 24% of
the response by creating opportunities to be competitive in the market,
and 30% of the respondent are by facility you to participate innovating
activity and 36% of the respondent are no support from the government.
Table 3.15 the importance of enough salary
No Do you pay enough salary Respondent %
that change employee life?
15 Yes 42 63
No 25 37
Total 67 100
Source form questionnaire, 2015
The above table 3.15 shows that, 63% of the respondent responses yes,
37% of the respondent responses no this indicates the majority
respondent to responses yes and to get enough salary that change
employee life.
 it question no 15 most of the respondent responses to indicate yes then
the general expression of the respondents are most of this time our
business are successfully, participate in the market.
Table 3.16 to express monthly income
No How much income do you get Respondent Percentage
monthly from each activity?
<500 4 6
500-1000 10 15
16 1000-2000 23 34
2000-2500 26 39
2500-3000 4 6
>3000 - -
Total 67 100
Source from questionnaire, 2015

According to the above table 3.16 expression, 6% of respondent to response

below 500 15% of the respondent to response between 500-1000, 34% of the
respondent to response between 1000-2000, 39% of the respondent to
responses between 2000-2500, 6% of respondent to response between 2500-
3000, 6% and no respondent above 3000, the fore the largest number or
respondent has to great enough monthly, income.

Table 3.19 government support toward the business

No To what extent you expect the Respondent Percentage
government to support your
business?
Consultants 21 31
19 Work space place 26 39
Material aid 20 30
Total 67 100
Source from questionnaire, 2015

According to the above table 3.17, 31% of respondent to require consultancy,

39% of respondent to response is needs supported by work place/space/ and
30% of respondent are find supported by material aid. This indicates the major
respondent to wants supported by work place and material aid.

Table 3.20 access to training for small scale enterprise

No Have you ever get access to Respondent Percentage

training about small scale
enterprise?
Yes 25 37
20 No 42 63
Total 67 100
Source from questionnaire, 2015

According to the above table 3.18 expression, 37% of respondent are said that
yes and 63% of respondent are no. This shows that the majority respondent
there is no having access to training about small scale enterprise business.

Table 3.19 the interval period of training

No From no 19 your answer yes by Respondent Percentage

which interval period you get
training?
Monthly - -
Annually 4 16
Quarterly 5 20
21 By two year interval 15 60
Semi annually 1 4
Total 25 100
Source from questionnaire, 2015

According to the above table 3.19, response depend on question no 20, 25

respondent answers yes. then, 16% of respondents annually, 20% of
respondent quarterly, 60% of respondent of response by two year interval, 4%
of respondent semi annually and no respondent monthly. There for the
majority are responses by two years interval to get access to training about
small scale enterprise.

Table 3.20 the agreement of salary

No Do you agree that your monthly Respondent Percentage

payments to fulfill the employees?
22 Strongly agree 25 37
Agree 32 48
Dis agree 10 15
Strongly dis agree - -
Total 67 100
Source from questionnaire, 2015

According to the above table 3.20, 37% of the respondent strongly agree, 48%
of respondent to response agree, 15% of respondent are responses disagree, no
respondent strongly disagree. This indicates that the majority of the
respondent are responses the monthly payment to fulfill the employee life.
 CHAPTER FOUR

4. Summary, conclusion and recommendation

4.1 Summary

The result of presentation of the paper shows that the major respondent are
male and the majority respondents are single and above 21 years of age, high
number of respondents degree and diploma levels of education but the
elementary completed and illiteracy are few in number in the small scale
enterprise. The owner of the business for starting the major respondent
reasons is to be independent from family and government and to have no
alternative income sources. The majority respondent is established cafe and
restaurant, cobblestone and shop business types. The owner of the small scale
enterprise faced different problems. The major problems are financial problems
and lack of skills about the business. The majority respondent’s idea used
establishes new business from government rule and regulation and the
majority source of capital are loan from bank and sales of asset. The majority
of the business is managed by one individual. The majority of the owners of the
business choose the particular activities. The highly competitive with other
business. the majority or respondent does not got support from the government
bodies the majority respondent have willingness to introduce new idea that are
not used by others. The majority small scale enterprise idea sources are
government rule and regulation and customer. The majority of the respondent
responses indicates that no supported from the government. The largest
number of respondents have owners of the capital was loan from bank. The
largest number of respondent to has to great enough monthly income. the
majority respondent there is no have access to training about small scale
enterprise business most of response to indicate by two year interval to get
access to trading about small scale enterprise generally the majority
respondent are response the monthly payment to fulfill the employees life.

4.2 Conclusion

The objective of this study was to assess and analyze the challenge and
prospect of entrepreneurial activity in small scale enterprise. In order to
achieve this objective related to respondent of the sector that data obtained
were presented and finding the following conclusions are drawn the study as
assessed the challenge and prospect of entrepreneurial activity in some
selected small scale enterprise.

- The participation of male greater than female on the entrepreneurial

activity. Most of the owner in small scale enterprise was above grade 12
educational level.
- Most of the owners are belongs to the age group between 21-34 and 35-
48. The majority of the owners start to their business in order to be
independent from their family and have no alternative source of income.
- The owners of the enterprise have the following major problems, like lack
of finance, lack of skill, lack of partners, that can do the business no
access of training lack of work place, material aid from government lack
of market opportunity majority of the owner start their business in order
to be independent from their family and have no alternative source of
income.
- The general prospect of small scale enterprise for the future to decrease
the number of unemployment and increasing of economic of the country.

4.3 Recommendation
Based on the problem indentified from the sample respondent of small
scale enterprise owners and employee the following recommendation
suggested improving the efficiency of the research process.
- Most of the owner was above grade 12th it wills constraint to go for far on
the creativity process. So it is better to under this grade and illiteracy
given for awareness creation of the small business operation.
- Even if the newly opened small business increasing from time to time
there were problems on the owners to start to the new business which
are basically, financial lack of work place and market opportunity. so the
owners have to look alternative source of income, workplace and market
opportunity, the government should support them to competitive and
creative their business activity privation should provide loan and training
 service to support of small business enterprise. And the government
should facilitate the working place and to create market opportunity.
- The government should encourage the participation of female in small
scale enterprise because of the female participation in small scale
business have great role on the country economic development.
- The small scale enterprise should be managed by two or more provide in
sufficient manner the capacity of the entrepreneurship for
entrepreneurial activity and reduction unemployment in the kebele. By
that it is possible to increase the overall economic contribution of
entrepreneurial activity on the kebele.
- Most of the problems are lack of work place and lack of training from the
government bodies so the government should be facilitate the necessary
materials and training program.

Reference
 Allan G.bluman, (2004), elementary statics, (3rd edition),McGraw
hill(plc) New York
 Brtuce.R. bar ringer, (2006), fundamental entrepreneurship, (1st
edition), McGraw hill (PLC), London
 G.Govin,(2008), Entrepreneurship and small scale business
management, (2nd edition)MC grew hill, New York.
 Mary coulter, (2008), entrepreneurial challenge, (2nd edition)
McGraw hill, London.
 P.peters,(2009), entrepreneurship and small scale enterprise, (4th
edition), Prentice hill India (plc), new Delhi.
 Ram R.Pujari,(2009), Entrepreneurship practice, (2nd edition), Mc
Grew hill Colombia
  San garam keshar Mohanty. (2007), fundamental
entrepreneurship (3rd edition, prentice hill of India (Plc), New Delhi.
 Werotaw Bezabih, (PhD), (1010), Entrepreneurial activity in
Ethiopia, (1st edition Mega publishing company, Addis Ababa

www.Google.com

Appendix

WOLLLO UNIVERSITY

College of business and economics

Department of management

This questionnaire is designed to collect information regarding challenge and

prospects of small scale enterprise kobo town kebele 02. This study will be
under take for partial fulfillment of the requirement the award of BA degree in
management. it will be used for academic purpose only and as such your
information will be kept confidential your cooperation is very help full to the
fulfillment of the research objective. Therefore cardinally request you to help
me by falling this questionnaire as completely as possible.
I. personal information
1. sex male female
2. age <21 21-34 34-48 >48
3. marital status: single married
4. educational level
Illiteracy high school certificate elementary
completed diploma degree
II. General information
1. When did you start running business?
Have no alternative income source
To be independent
Self help and family support
To keep busy
2. What type of business are you running?
Restaurant cobblestone work
Shop furniture and metal work
3. What was the problem you’re faced to start business?
Financial problem lack of partners can do the business
Lack of skills
If other ------------------------------------------------------------------------
---------------------------------------------------------------------------------
4. Why did you choose this particular activity?
Due to lack money relevant prior to work experience
If was family run business other is high competitive
5. How is/are the business managing?
By one individual by two or more individual
6. Are you willing to introduce new idea that is not used by other?
Yes no
7. If yes No 6 which source of new idea did you uses establish this
business?
Customer existing business
 Government rule and regulation by come across
8. What is the major source of your capitals?
Own saving sale of asset
In heritance loan from bank
if others mention pleas -----------------------------------------------------
--------------------------------------------------------------------------
9. Do you any advantage from government bodies?
Yes No
10. If yes question no 9 by what? mention pleases------------------
----------------------------------------------------------------------------------
----------------------------------------------------------------

11. How to the government support your business?

By creating opportunity to promote you conduct and service

By creating opportunity too be competitive in the market
By facilitating you to participate innovative activity
No supported from government
11. If you pay question No 12 have you some reasons?
Yes No
12. If yes question no 12 have you some reason?--------------------
----------------------------------------------------------------------------------
---------------------------------------------------------------
13. How much income doo you get monthly form each activity?
<500 1500-2000 2500-3000
500-1000 2000-2500 >3000
14. To what extent you the government to support your
business?
Consultancy material aid
Work space if other specify-------------------------------
15. Have you ever get access to training?
Yes No
 16. From question no_ 16 if your answer yes by which intervals
period?
Monthly quarterly semi annually annually by two
years intervals

17. Do you agree that your monthly payments to fulfill the employees
life?

Strongly agree disagree agree strongly disagree