One of the greatest challenges that face Nigeria is how to alleviate poverty and unemployment. Unfortunately, poverty is on the increase because of the growing population and the lack of commensurate economic development and resources to satisfy the needs of the ever-increasing population. The only alternative is to find ways of curbing the spread of poverty and its harmful effects. Entrepreneurship is considered the most viable and feasible alternative because it acts as a vehicle for poverty alleviation; it also constitutes the most viable vehicle for self sustenance. Engaging in entrepreneurial activity is a strong measure that will create sustainable employment opportunities for the poor people and empower them to benefit from newly created job to alleviate poverty.
Entrepreneurship is considered key to economic performance, innovative change and creativity (OECD, 2004). It contributes to the economy by creating jobs and generating employment, increasing productivity, creating wealth and value added to sustain growth and competitiveness, reduce poverty and achieve social goals by helping individuals and groups to help themselves. Entrepreneurship in Micro, Small and Medium Enterprises (MSMEs) is one of the predominant entrepreneurial activities in sub-Saharan Africa (OECD, 2004).
In the words of Thomas, (1999), entrepreneurship is the incubator that hatches and breeds young firms. It contributes to economic growth by shifting resources to new markets through innovation and plays important role in job creation. Entrepreneurship in MSMEs not only contributes to improving the living standard but also brings about substantial local capital, local resources harnessing and local capacity improvement for local economic development (OECD, 2004). The above mentioned benefits cannot be achieved if those who manage these MSMEs are not well trained on entrepreneurship which involves business management.
Osuala (2006) defined small business as any business owned, managed and controlled by a sole proprietor, or partners of about two persons, has total assets of less than 4 million naira and a relatively small share of the market and does not have more than fifty employees. In other words, small businesses comprise of MSMEs. According to Otero (1987) micro and small enterprises is defined as those employing 1-5 paid or unpaid employees including the owner. In small business, the owner has direct lines of communication with the operating managers and has personal contact with a large proportion of the work force including key personnel (ILO, 2007). In another vein, Small Business Research Centre [SBRC (1992)] as cited by Kurato (2005) stated the elements that constitute the meaning of small business to include the following:
• Independent management
• Owner supplied capital
• Mainly local area of operation
• Relatively small size within industry
• Individually owned and operated business.
Small businesses represent a significant position of business activity in developing countries. The only reason why people underestimate the magnitude of micro-enterprise is because most of them are not registered. A survey in Zimbabwe by Liedholm and Mead (1999) indicated that the number of micro and small enterprises in developing countries is far greater than official statistics. Another finding about micro and small enterprises is that women operated the majority of the businesses and they were often overlooked because most of the time they produced from home and were likely to be invisible entrepreneurs (Parker, 1994). Although some authors believe that small businesses are usually hawkers and small traders, but Liedholm and Mead (1999) discovered that manufacturing enterprises constitute a substantially higher share of micro enterprises. Olashore (1995) defined small business operators as those who owns, manages and controls small businesses. According to the study of Otero (1987), a micro entrepreneur is a person who began and owns a business, employing no more than 5 persons. In this study, those who manage MSMEs are referred to as small business operators.