Developing Country Studies www.iiste.org ISSN 2224-607X (Paper) ISSN 2225-0565 (Online) Vol.4, No.24, 2014 75 Economic Analysis of the Factors Influencing the Performance of Small Scale Entrepreneurship in Kwara State, Nigeria Aworemi, J.R., (Ph.D) * Transport Management Department, Ladoke Akintola University of Technology, P.M.B. 4000, Ogbomoso, Nigeria E-Mail: aworemi_remi@yahoo.com Akanbi, T.A. & Ayeni, W.O. Faculty of Management Sciences, Ladoke Akintola University of Technology, P.M.B. 4000, Ogbomoso, Nigeria Abstract This study economically analysed factors influencing the performance of small scale entrepreneurship in Ilorin, Kwara State, Nigeria.The study was carried out in Ilorin, Kwara State, which is one of the prominent entrepreneurial states in the middle belt of Nigeria. This study covered three Local Government Areas that are within Ilorin metropolis. A total of 245 respondents were randomly selected in the in the study area whereby copies of well-structured questionnaire were randomly administered on the Proprietors or Managing Directors and /or Management Staff members of the selected small-scale enterprises within the capital city of Kwara state. The study revealed that power supply (POS), labour (LAB), the patent laws (PAL); State and Local Government Policies (SLG) and the financial constraints (FIN) are highly correlated with the dependent variable. This implies that, these variables are the salient factors that influence the performance of entrepreneurs most in the study area and this is significant at 0.00 levels. Keywords: Economic, Factors, Performance, Small Scale, Entrepreneurs, Entrepreneurship. INTRODUCTION Entrepreneurship has been seen over the years as the act of assuming responsibility and the risk for a business operation with the expectation of making profit. Entrepreneurship is not just about establishing a business or doing business; it is not just about buying and selling; it is not just about short-changing others to make money, it is not just about being a business man seeking for contracts. It is about having the ability and willingness to take risks and to combine factors of production in order to produce goods and services that can satisfy human wants and create wealth (Mike, 2011). Arumah (2009) reported that an economist views entrepreneurship in the context of the combination of resources, labour, materials, and other assets such that their value is greater than individually. This implies that an entrepreneur combines efforts of factors of production to achieve their aims. To corroborate this view, online business dictionary holds the position that in economics, entrepreneurship is regarded as a factor of production together with land, labour, natural resources and capital. Furthermore, it states that entrepreneurial spirit is characterized by innovation and risk-taking, and an essential component of a nation’s ability to succeed in a dynamic and competitive global market. The whole idea about entrepreneurship is about self-employment which will generate employment opportunities to others that must work with him (entrepreneur) as he cannot work alone (Mike, 2011). There is no generally accepted definition of small business because the classification of business into large scale or small scale is subjective and based on qualitative judgement (Ekpeyong and Nyang, 1992). However, entrepreneurship comes in these classifications depending on certain characteristics of the business. Countries do not use the same definition for classifying their small and medium scale enterprises (SMEs) sector nor does a universal definition appear to be necessary. The definitions in use depend on the purpose, those definitions are required to serve and the policies which govern the SMEs sector (Aremu and Adeyemi, 2011). This paper focuses mainly on the small scale entrepreneurship and it shall be given more focus. In Nigeria, there is no clear-cut definition that distinguishes a purely small-scale enterprise from a medium scale enterprise (Ekpeyong and Nyang, 1992). They further revealed in their finding that the central bank of Nigeria, in its monetary policy circular No 22 of 1998, defined small-scale enterprises as having an annual turnover not exceeding 500,000 naira. However, they cleared a misconception about their claim by saying that the definition does not reflect the characteristics of a typical Nigeria small scale enterprise in terms of their capital base and number of employees. Muritala et al (2012) reported that the Third National Development Plan (1957-1980) defines small businesses as a manufacturing or service organization whose employee is not more than 10, they also revealed that the individual research unit of O.A.U (1987) define small enterprises of Nigeria as one whose total assets or capital is less than N50, 000 and employee fewer than 50 full time workers. Adebisi (1994) classified small-scale enterprises in Ilorin the Kwara State capital as four (4) for the purpose of administering questionnaire/field