Effect of Profit Plough Back on the Growth and Survival of Medium Scale Businesses in Anambra State

Abstract

This study investigated the effect of profit plough back on growth and survival of medium scale businesses in Anambra State. The study identified that high interest charges on borrowed funds, inability of medium scale businesses to retrain their workers and acquire the modern machines needed in their day-to-day business operations have hampered medium scale business growth and survival and productivity of their businesses gets clouded and disappears into the thin air.    Three research questions and three hypotheses guided the study. Descriptive research survey design was adopted for this study.  Population of medium scale businesses in Anambra state is 420, which comprised of 200 medium scale business owners and 220 female medium scale business owners in Anambra state.   Sample size of this study is 200 to ensure better selection of the sample size, 60 males were selected from medium scale businesses at Ontcha, and 40 females were selected from medium scale businesses at Nnewi,  On the other hand, 55 males were selected from medium scale businesses at Ihiala LGAs, and 45 females were also selected from medium scale businesses at Ekwulobia LGAs, which gave a considerable sample size of 200 using stratified sampling techniques. Instrument for data collection was a researcher's developed questionnaire titled “Effect of plough back profit on medium scale businesses growth and survival in Anambra State, was used, with four Likert scale of strongly agree, agree, disagree and strongly disagree.  The instrument was validated by two specialists from the Department of Business Administration, Facuty of Administration and management Sciences and Department of Business Education, Faculty of Education and arts, Madonna University, Nigeria, Okija Campus Anambr state.  Cronbach alpha statistics was used to ascertain the reliability coefficients of the study at 0.78 and 0.98, which showed that the instrument was reliable for use in this study. A total of 200 questionnaires were administered to the respondents with the help of two research assistants, and a total of 200 questionnaires were returned non- got missed. Pearson Product Moment Correlation Coefficient was used to analyze the data generated while simple linear Regression analysis were used to test the hyopthesis at 0.05 alpha levels with the help of SPSSS v 26.  Findings from this study revealed that medium scale businesses in Anambra state have relied on ploughed back profit to achieve considerable   business growth and survival. The findings from the study also, revealed that medium scale businesses in Anambra tate have used their earned ploughed back profit to ensure that medium scale business grows, survive with continuous productivity and effective service delivery in Anambra state.  It was recommended in this study that medium scale businesses should rely on annual ploughed back profit of 50 to 60 % to fend for the growth of their medium scale businesses in Anambra state. It was also recommended that some ploughed back profit should be re- invested for effective staff re training, and procurement of automated technologies. These would enable medium scale businesses in Anambra state to continue even in the future.