Theory question 106
Business OrganisationsOutline any five reasons why small scale firms are common in West Africa.
Show the model answer
Model answer
Any five: shortage of capital; small size of the market (low incomes); ease of setting up and few legal formalities; lack of managerial and technical skills; desire for independence and personal control; personal services demanded by customers; nature of products (perishable or fashion goods); difficulty of getting bank loans; government encouragement of small businesses; limited infrastructure.
Explanation
Most reasons relate to limited capital, small markets and low skills.