Financial Management and Performance of Small Scale Business in Nigeria

ABSTRACTThis study explores the relationship between financial management practices and the performance of small-scale businesses in Nigeria. The role of financial management is critical in ensuring business sustainability and growth, particularly for small-scale enterprises (SMEs) that are integral to Nigeria’s economic development. The research employs a survey design method, collecting data from small business owners and managers through structured questionnaires. The study analyzes key aspects of financial management, including budgeting, financial planning, risk management, and access to funding, and their impact on business performance indicators such as profitability, growth, and efficiency. Data analysis is conducted using the Statistical Package for Social Sciences (SPSS), which enables an in-depth examination of the relationships between financial management variables and business performance. The findings reveal that effective financial management practices are strongly correlated with improved performance in small-scale businesses, particularly in areas of profitability and operational efficiency. However, challenges such as inadequate access to finance and poor financial literacy among business owners hinder optimal financial management. The study concludes by recommending enhanced financial literacy programs and better access to financial resources for small business owners, alongside strategic financial management practices, to improve the overall performance of SMEs in Nigeria. These insights can contribute to policymaking and development initiatives aimed at supporting small-scale enterprises for sustainable economic growth.