The Role of Business Environment on the Establishment of Small and Medium Scale Enterprises in Taraba State

The research study examines the role of business environment on the establishment of small and medium scale enterprises in Taraba State. To achieve that the following research objectives were formulated; (i) to determine the impact of external business environmental on the developing SMEs in Taraba state, (ii) to evaluate the existing SMEs in Taraba State, (iii) to analyze problems of developing of SMEs in Taraba state, (iv) Examine the link between business environment and SMEs In Taraba State. The research method adopted was quantitative technique were Data collected were and analyzed using Statistical Package for Social Scientists (SPSS) Version 26. A total of three hundred and twenty-four (324) copies of the questionnaire were administered, out of which three hundred and sixteen (316) copies representing (97.5%) of the questionnaire were properly completed and retrieved while eight (8) copies representing (2.5%) were not retrieved. The data were presented in tables as frequency distribution in the data analysis; the techniques of percentage frequencies, mean and standard deviation were used. The hypotheses were tested with chi-square and multiple regression method at 5% significance level. The result shows that gender, age, education level, risk-taking and employee's skills have no significant relationship with business growth while years of experience with (P-value =0.032) have a significant relationship with business growth. The test also revealed that there was a statistically significant association existing between size of sales (P-value=0.001&lt; 0.05), gained profit (P-value=0.0026 &lt; 0.05), credit control (P-value=0.015&lt; 0.05), location (P-value=0.009&lt; 0.05) and access to fund (P-value=0.014&lt; 0.05) with business establishment in the business environment. Regression analysis was used to check relative contribution of business environment (Internal Factors) on Business Growth Using Regression Analysis. The result indicated that size of sales, credit control, financial management practices have significant effect on the business growth of SMEs with P-value&lt; 0.05. Furthermore, from the regression output for effect of external factors on business growth, it also revealed that location, access to fund has significant effect on the business growth of SMEs with P-value&lt; 0.05. regression analysis also indicated that government regulation, government agency, sundry bill, access to fund and bureaucratic process have significant effect on business growth in Taraba State. Consequently, both internal and external business environmental factors have significant effect on the establishment of SMEs in Taraba state.


Introduction
Business environment plays a very significant role in the establishment, establishment and growth of any business enterprise. Business environment, therefore, constitutes both the internal and external forces that promote or impede on the growth of any business within a given environment. The success of any business enterprises solely depends on the environmental factors that influence business activities which include small and medium scale enterprises (SMEs). This research, therefore, attempts to study the role of business environment on the establishment of small and medium scale enterprises (SMEs) in Taraba State.
Small and medium scale enterprises (SMEs) have been recognized as indispensable components of economic establishment in both developed and developing economies. This subsector of the economy is globally acknowledged to contribute substantially in enhancing employment creation or generation, poverty alleviation, equitable distribution of resources, income redistribution, technical and technological innovation, entrepreneurial skills establishment, more uniform industrial and economic region. Moreover, SMEs have been touted strategic in ensuring and encouraging rapid industrialization and reversal of rural-urban migration (Ezema, 2014).
SMEs are businesses that have turnover of less than 100 million per annum and/or less than 300 employees. The term SMEs have been described by different authors in different ways, the Nigeria Bank for commerce and industry-defined a small scale enterprise as one whose capital does not exceed N750,000 (Imeokparia and Ediagbonya, 2014). Their increasing number in the business society is due to less capital requirement, less labour, low technological knowledge and a little managerial ability needed to establish such SMEs (Essien, 2014).
SMEs represent about 90% of the manufacturing sector in terms of the number of enterprises; they are distributed in Nigeria by clusters within regions and thus contribute approximately 50% of the GDP in Nigeria.

Statement of Research Problem
SMEs is key to the contribution of National GDP of every Nation and it is a determining factor in the classification of Nation as developed or under developed. SMEs in Nigeria have been classified to suffered low and slow growth over the years this is seen as a result of several challenges like economic and political instability, corruption, insecurity, high rate of poverty, poor infrastructures, etc. the challenges can be sum up to be business environment. Hence this study to examine the relationship between business environment and the establishment of SMEs in Taraba State. Therefore, there is the need to seek further solution to these problems as its grossly hamper SMEs establishment in Nigeria. As such, given this state of nature in the business environment, the focus of this study is to examine the role business environment plays in the establishment of SMEs as relate to Taraba state.

RESEARCH OBJECTIVES
The objectives of this study are; (i) to determine the impact of external business environmental on the developing SMEs in Taraba state. (ii) to evaluate the existing SMEs in Taraba State (iii) to analyze problems of developing of SMEs in Taraba state. (iv) Examine the link between business environment and SMEs in Taraba State

Research Questions and Hypotheses
In order to achieve the objectives of the study the following research questions were developed: (i) What is the impact of external business environmental on the developing SMEs in Taraba

i. Contribution to practice
The study would serve as a useful guide to policy formulators, management practitioners, executive, corporate managers most especially in SMEs to understand how business environment could impact positively in their business policies, leadership styles, recruitment and selection, innovation and pricing aid or enable, the relationship and the extent of its effect on the attainment of establishment by the SMEs. The study would also enable the SMEs to proactively respond to changes within the environment more effectively as well as enable them implement better business strategy for their operation and establishment.
ii. Contribution to Research Pervious research works have examined different perspective to the role of business environment in an SMEs establishment in an economy but no close attention was given to Taraba State, hence this study attempts to study would sparked up research on the role of business environment in the establishment of SMEs in Taraba, its challenges and prospect in advancing the Taraba State economy.

ii. Contribution to Knowledge
The pool of knowledge will be enhanced on the fact that lack of control system that moderate business environment has negatively affect the establishment of SMEs in Nigeria. Hence the need to create business environment friendly is imperative.

Theoretical Framework
Independent Variable Dependent Variable The theoretical framework in Figure 2.1 synthesizes the key words of the study, through an analysis of the relevant theory Business environment is a construct that impacts establishment on the small and medium enterprises. The framework is derived from complexity theory (independent variable) may be linked to establishment of small and medium enterprise (dependent variable) Every new SMEs organization passes through stage of business environment in order to survive o establishment process.

Complexity Theory Approach
Complexity was defined as the measure of heterogeneity or variety in environmental, sub-factors such as customers, suppliers, socio-politics and technology (Chakravarthy, 1997). As soon as complexity increases, the Establishment of SMEs i.
Identification of business opportunities ii.
Acquiring of Business skills iii.
Identification of customer needs iv.
Establishment of business enterprise Business Environment i.
Political environment ii.
Social environment iii.
Technological environment iv.
Financial environment v.
Economic environment capacity with which to understand and make use of information to plan and predict becomes more difficult (Black and Farias, 1997).
The business environment is comprised of a set of relationships between agents or stakeholders in the environment. Hence, these interactions continuously "co-create" the business environment the business exists. The business environment is changing faster than ever before, with such change occurring in two major dimensions, complexity and turbulence (Conner, 1998).
As all systems is due to increase in complexity over time, the increasing complexity often leads to more change (Conner, 1998). As the system becomes more complex, making sense of it becomes more difficult (Black and Farias, 1997).
A stable environment changes little, but when it does, the change is predictable. In unstable environments, there are many unanticipated changes. Turbulence is the natural state of the business environment (Mason, 2007). It is caused by changes in, and interaction between, the various environmental factors especially because of advances in technology and the confluence of computer, telecommunications and media industries. The result of this growth in business environmental turbulence has been the reduction of orderly competition, an increasing need for information, innovation and quicker cycles of establishment, and more difficulty in predicting customer, product and service requirements. Complex and turbulent business environments are not desirable, but since many businesses are uncertain about how to cope with such situations, it only will make sense to identify ways in order to handle such environments.

The Role of Business Environment and Establishment of SMEs in Nigeria
The literature on the establishment and growth of firm has been identified severally to be influenced by certain factors. These factors have been classified by Brüderl et al. (1992) as follows: (i) Individual specific factors; (ii) firm-specific factors and (iii) environmental factors. The individual characteristics of the founder are identified by the human capital theory as pre-requisites for the establishmental growth of SMEs. These characteristics are described in the literature by researchers from different fields. For example, sociologists tend to identify sociodemographic attributes of the founder; psychologists tend to list the personality traits.
As for the enterprise itself, most studies on the growth and survival of firms primarily find that the age and size of a firm seemed to affect its survival (Henderson, 1999) positively. For firm age, it is argued that new entrant's firms face a phenomenon known as the 'liability of newness' effect. This perspective was of the opinion that new firms face a greater risk of failure as compared to older ones. This is because older and more established firms are likely to have more developed routines and established processes and greater access to resources in comparison to younger and less established firms (Sorensen & Stuart, 2000). On the other hand, other studies have found that survival may decrease with firm age. The 'liability of adolescence' effect proposed by Fichman and Levinthal (1991) and the 'liability of senescence' effect proposed by Hannan (1998) explain this relationship. The 'liability of adolescence' proposed an inverted U shaped, rather than linear, risk pattern. This suggests that firms are shielded from failure at first due to the initial resource endowments. However, firms may no longer be protected when these resource endowments become less adequate as they are confronted with a new market environment, leading to increased firm exit-risk during adolescence (Pérez et al., 2004). The mortality risk is however, not expected to start decreasing after the period of adolescence until firms adapt to the environment and consolidate their position in the market (Pérez et al., 2004). For the 'liability of senescence,' Hannan (1998) posited that the probability of survival decreases over time and therefore older firms face a relatively high chance of market exit.
Besides the traditional factors of firm age and size, organizational strategies are found to have an impact on the establishment and growth of SMEs. Geroski et al. (2010) showed that there are two divergent views, based on economic and ecological arguments, regarding the impact of firm strategies on establishment and growth. While economists base their argument on the adaptive role of change by stressing that survival of firms is dependent on the success in adapting to new ways of doing business; ecologists on the other hand, emphasize inertia or resistance to change by arguing that firms that do not change are more likely to survive. This latter argument stresses that the greater the magnitude of change, the higher the likelihood of firm exit. It is in part linked to the scale of adaptive response by the firm to environmental stimuli.

Research Design
The study adopted quantitative paradigm using the survey design. This research design was permissible for employing a coherent research instrument for gathering information and generating data that were drawn in this study. The population for the study consists of the small and mediums enterprises (SMEs) that operate their businesses in Jalingo, the capital of Taraba State and also registered with Small and Medium Enterprises Establishment Agency of Nigerian population for the study stand 1698.
The sample size for this study was established with the use of the Taro Yamane (1967) statistical formula. This formula relates the population size to the level of significance as illustrated below: Where: n= Sample Size N=Overall Population e= Tolerated/assumed error limit 0.05 on the basis of 95% confidence Interval The data collected were analyzed using Statistical Package for Social Scientists (SPSS), version 25.0. Regression analysis was conducted to ascertain the role of internal and external business environment in the establishment of SMEs in Taraba State. All statistical tests were performed using two-sided tests at the 0.05 level of significance. P-values of less than 0.05 were considered statistically significant.  Table 1 showed the experience in running the business and the actual condition of the business. The item statement considered include I have access to information on technologies to support my business with a mean score (2.68), the government support is not sufficient with mean score (3.23), capital is not sufficient to maintain and expand the business with mean score (3.04), I have access to customers with mean score (3.04), I have access to information on government regulations that are relevant to my business with mean score (2.74), new technology is attainable with mean score (2.82), I have access to information on market with mean score (2.83), I have access to supplier with a mean score (3.25), I got business permit and other permits easily and quickly with a mean score (2.81), existing technology is easily maintainable with a mean score (2.59), I have access to information on finance sources with a mean score (2.80), I have reliable business network to run the business with a mean score (3.20), the government does not provide any solid assistance to the SMEs with a mean score (3.28), SMEs are not carried along on the disbursement of financial support by government agencies with a mean score (3.21), the existing government programs on SMEs are not helpful with mean score (3.23), the company struggles to get credit from banks with a mean score (3.34), theft and burglary are on the rise with mean score (3.17), payment of multiple taxes is disturbing with a mean score (3.23), status of road in the location is good with a mean score (3.21) and Electricity supply is epileptic with a mean score ( Table 2 showed evidence based on experience in running the business. The item statement includes Firm registration with a mean score (3.31), Licenses for start of business with a mean score (3.08), Customs regulations with mean score (2.77), Regulations on employment with mean score (3.07), Health and safety regulations with a mean score (3.26), Tax regulations with a mean score (2.75) and Environmental regulations with a mean score (2.69). It was evident from the table that 85.8% are of the opinion that firm registration is easy while 14.2% opined that firm registration is difficult, 75% are of the view that Licenses for start of business are easy while 25% says is difficult, 60.2% opined that Customs regulations is easy while 39.9% are of the view that is difficult, 74.7% are of the view that Regulations on employment is difficult while 25.4% says is difficult, 83.8% of the respondent says that Health and safety regulations are easy while 16.2% are of the view that is difficult, 58.5% opined that tax regulations are easy while 41.5% says is difficult and 56.1% of the respondents are of the opinion that Environmental regulations are easy while 44% says Environmental regulations is difficult.

Conclusion
The business environment has impact on the establishment of SMEs in Taraba state as showcase by the negative impact of government agency on security measure that has not been up to expectation as business owner's complained of both business environment, likewise the effect of inadequate infrastructures, lack of access to funding and financial inadequacy affects the performance and establishment of SMEs.
The external environmental factors are the major factors influencing the establishment and performance of SMEs in Taraba states.

Recommendation
Business environmental factors influencing the establishment and performance of SMEs are many and varied; therefore, this study could not exhaust issues regarding SMEs development and environmental factors. Since this study considered and is limited to only Taraba state. The study recommended further researches on the following. a) A Comparative study on the impact of business environment on SMEs performance in the North-eastern states of Nigeria should be carried out. b) Study on the impact of government agencies assigned to supervise SMEs and disburse funds for SMEs support should be carried out in Taraba and the north-east state of Nigeria.