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JOURNAL OF RESEARCH IN NATIONAL DEVELOPMENT VOLUME 8 NO 1, JUNE, 2010


FINANCE FUNCTIONS OF SMALL FIRMS ENTREPRENEURS IN NIGERIA: A CASE STUDY OF ‘ASO-OKE’ COTTAGE TEXTILE INDUSTRY

 

Atanda Fatai Abiodun
Department of Economics and Financial Studies, Fountain University, Osogbo
E-mail: atanda2001uk@yahoo.co.uk

Abstract
This paper examines the finance management activities of entrepreneurs of ‘aso-oke’ cottage textile industry in Nigeria. The study used primary data sourced from structured questionnaire and an in-depth interview. The stratified and systematic random sampling techniques were used in selecting 200 respondents. The descriptive and inferential statistical methods of analysis were employed and frequency distribution tables, percentages, chi-square and Z-score were used. It was found that the entrepreneurs like in any other small firms depend largely on personal savings, trade credits and retained profits to finance their businesses and their educational levels affect their dispositions towards records keeping. Also, the profit margins desired by the entrepreneurs were found to be relatively low when compared to the risk-free rate of return existing in the money market. It was concluded that ’aso-oke’ entrepreneurs do not carry out proper financial management activities in their businesses and recommendations on how to effectively and efficiently manage their businesses were made.

 

Keywords: Finance, management, firm,  entrepreneur


Introduction
Irrespective of its size and nature, finance is the blood that runs in the veins of every organization. For small firms, there is need for finance function in the same manner that a marketing function is required (Petty, 1993) and there is a clear and important need for small firms to properly utilize available finance for effectiveness (i.e. the achievement of some purposes, objectives or tasks). However, there is considerable evidence that the inability of small firms’ entrepreneurs to appreciate the significance of finance function and to competently manage it has led to problems and failures of small-scale enterprises (Peacock, 1985). The success and ultimate survival of any business especially in a competitive economy rest heavily on this and small firms need to ensure that funds are rightly sourced, allocated and invested in profitable ventures since the resource is scarce.

Literature is replete with the constraints faced by small firms and the major problem, being finance. Inang (1993) for example, commented that the finance required for the development of small firms in Nigeria are not forthcoming because of the low priority that banks accord them on the one hand and the lack of adequate information on the overall availability of funds on the other. In a 1991 study of 2,353 small workplaces in Australia, the most frequently mentioned problem was that of financial, mentioned by 28% of the sample (Callus, 1992). In addition, in a 1993 survey of 1,374 small service companies, it was concluded that financial aspects were the number one constraint facing service business (Roberts, 1994).

Production of the traditional hand-woven fabric called aso-oke is another major occupation of the people of Iseyin, an ancient town in Oyo State, South-West of Nigeria. The business is a cottage textile industry operated on a small-scale basis comprising of the entrepreneur or owner, few hired labourers, children or foster children and unpaid family workers and the industry contributes to the economic development of the area providing jobs and regular income to the people. On a broader sense, the industry facilitates the development of indigenous entrepreneurial culture among the people.

Despite this, the entrepreneurs cannot operate their businesses for longer periods (Atanda, 2004) due to problems such as lack of capital, frequent change in tastes of consumers, high cost of transportation, lack of skilled labour and standard and ethical problems. It was found that lack of finance was one of the constraints militating against the development of the business and in fact, almost every entrepreneur pointed to this constraint as a major one. But the finances available to them, how far did they succeed in managing them?

Essentially, a lot can be learnt about the finance functions of aso-oke entrepreneurs:  What are the sources of finances available to the entrepreneurs and how they are fully exploited should be exposed. Records keeping function needs to be examined because finance function cannot be effective without adequate records of financial transactions. Moreover, how the entrepreneurs manage excess funds during market boom needs research attention: do they keep money in the banks or in their houses or tied in projects, investments or inventories? What about the profit margin desired, the costing methods and the pricing policies adopted by the entrepreneurs? These have given rise to the view that it would be necessary to embark on a study on the financial management activities of aso-oke entrepreneurs in order to evolve a more pragmatic way of effectively managing their finances.

Consequently, the broad objective of this paper is to examine the finance management activities carried out by the entrepreneurs in aso-oke cottage textile industry. To achieve this, sources of finance, record keeping and cash management activities were examined. The profit margin desired by the entrepreneurs, their pricing policies and costing methods adopted by them were also examined.
Theoretical Framework
This study is anchored on the Theory of Financial Management. The traditional approach dominated the scope of financial management and limited the role of a financial manager simply to raising of funds with the assumption that a financial manager has no concern with the decision of allocating business funds. This implies that it is only during major events in the life of a business that a financial manager is called upon to raise funds. This approach has been criticized by many writers for its inability to consider the day-to-day managerial problems relating to finance of a business; thus, the approach lacks a conceptual framework for making financial decision by business managers or entrepreneurs.

As rightly observed by Pandey (1993), emphasis on the financial manager’s function had shifted from funds raising to efficient and effective use of funds due to changes in business situations caused by intense competition, technological innovations and inventions, population growth and widened markets experienced since 1950s. Hence, financial management is now considered a vital and an integral part of the overall management of an enterprise. In a modern enterprise, financial manager’s role is concerned with efficient allocation of funds and because financial decisions have a great impact on all other business activities, the decisions must be made in the most rational way. The concern of financial manager, besides the traditional function of raising fund therefore is in shaping the profitability of a firm through profit planning and costs control.

In the view of Olowe (1995), financial management now involves the managerial planning and control of financial resources to achieve the objectives of a firm hence; it is a dynamic process that involves rigorous analysis of investments of firm's funds with the aim of maximizing its wealth. Moreover, financial management is that part of overall management devoted to the effective investment, financing, application and control of an organization's resources and assets such as man, money, materials, machinery, and methods, which an organization uses to carry out its activities for the attainment of specified objectives (Omopariola, 2000).  A firm secures capital it needs and employ it in activities such as production, marketing and personnel, which can generate income to the business. This implies that finance is useful in all functional areas of a business and it becomes clearer that financial management is concerned with virtually what goes on in a firm since every undertaking inevitably revolves around money.

The major areas covered by financial management were made explicit by Omopariola (2000) when he emphasized that it involves firm’s objectives, planning, funding, costing, pricing, forecasting, coordinating and controlling, credits and collections, inventory management, tax management and computer operations. It is necessary to affirm that all these areas are not useful to large companies only; they also have effects on profit planning of small firms. The determination of profit margin or mark-up for example is very important to a small firm’s profitability because all cost items must be adequately recognized and considered in the determination of the exchange value of the firm’s products or services. Also, liquidity and flexibility in decision-making process are essential basis for finance function of small firms.

Besides, the responsibility of the finance function rests heavily on owners or entrepreneurs since in most cases; they are the alpha and omega of the business. They do not employ helping hands; even where they do, they feel reluctant to place the employee in managerial positions. The entrepreneurs therefore need to be exposed to some elements of financial management in addition to technical skills so that they can effectively carry out the finance functions. The determination of the costs of production together with how entrepreneurs determine their products prices will give an insight into how the entrepreneurs financially manage their businesses. 

Methodology
This study was carried out in Nigeria and the unit of analysis is the individual aso-oke entrepreneur. The study basically used primary data sourced through structured questionnaire and interview. Secondary data needed to support the information were sourced from available journals, textbooks, seminar papers as well as unpublished dissertations. Stratified and systematic random sampling techniques were used to select two hundred (200) respondents from 606 registered entrepreneurs with the two market-based associations using the associations and their branches for stratification and one out of every three entrepreneurs was selected. An in-depth interview was conducted with 22 respondents, one selected from each of the 11 branches of the two associations. One hundred and seventy-five (175) returned questionnaires were found useful for analysis representing 87.5 % rate of response. The method of analysis employed was both descriptive and inferential and tools such as frequency tables, percentages, chi-square and Z-score were used. 

Analysis
One of the interesting characteristics of the respondents is their educational distribution. Majority of the entrepreneurs (about 69%) had primary or no education and only 20% had secondary education. Because of their educational background, the entrepreneurs are not exposed to modern techniques that can help them manage their businesses effectively.      The post-secondary and tertiary educational levels were not highly represented, accounted for 9.14% and 1.71% respectively. Hence, the percentage of entrepreneurs with higher education was very low when compared with those with little or no education. From this result, it can be deduced that educational level may be one of the factors affecting the financial management activities carried out by the entrepreneurs.
Record keeping activity of aso-oke entrepreneurs
Table 2 shows the responses of the entrepreneurs to the question: ‘Do you keep records and books of account for your business?’ About 58% stated categorically that they did not keep records. Even, majority of those that answered affirmatively (i.e. 41.71%) could not show tangible evidence of record keeping. From the interviews and observations, the records were not adequate as to enhance prompt and effective decisions making as what they provided were nothing but scanty and irregular records of sales takings. Their inability to keep proper records prevented the entrepreneurs from controlling neither their operating expenses nor volume of production and they could not also make reasonable forecasts.

Test of Hypothesis I
Ho: There is no significant relationship between educational background of entrepreneurs and their dispositions to record keeping.    

To test this hypothesis, responses to the entrepreneurs’ educational level and their dispositions towards record keeping were recorded differently and the test was conducted to ascertain whether the observed frequencies differ significantly from expected frequencies. Chi–square test of independence is used to test whether the two variables are independent or not. Observed frequencies of entrepreneurs’ responses to record keeping activity were compared with the expected frequencies of the two variables in the two markets. Expected frequency values (E) for each cell in Table 3 were calculated by using the formula


 
E = Row Total x Column Total
                Grand Total
 


            The formula X2 = å [(O- E )2] / E was used to compute the X2 value which resulted in 14.56. The X2 -tabulated at 1% level of significance and degree of freedom of 4 [i.e. (5- 1)(2 – 1)] is 13.28. Since the calculated value of X2 exceeds its tabulated value, we reject the null hypothesis that there is no significant relationship between educational level of the entrepreneurs and their dispositions to record keeping. Hence, lack of adequate educational background is one of the reasons why the entrepreneurs did not keep adequate records of their business activities.

Sources of finance to the entrepreneurs
Table 4 shows that personal savings was the most important source of initial and working capital to the respondents with a total response of 144 (i.e. 82.28%) respondents. This result supports various findings about the role of small businesses in mobilization of small savings for productive purposes as discovered by Ojo (1984) and Inang (1993). Furthermore, market contributions (‘ajo’), which accounted for 48% served as the second important source of finance to the respondents. Also, the significance of retained profits and trade credits as important sources of initial and working capital were represented by 33.71% each. Bank loans and cooperatives were of very little importance to the entrepreneurs i.e. 2.28% and 1.14% for bank loans and 3.43% and 0% for cooperatives (for initial and working capital, respectively). Also, inheritance was of very little useful as only 10 entrepreneurs (i.e. 5.71%) raised their initial capital through this source.

Liquid cash management
As to how the entrepreneurs manage liquid cash especially when there is excess fund during boom, Table 5 shows that a higher percentage of the respondents (i.e. 65.14%) tied down their money on stock of materials for future use.  This is to enable them carry on their businesses smoothly throughout the period of low sales without stoppage and this made their investment on working capital to be on the high side. The table also shows that few entrepreneurs knew the usefulness of financial institutions such as bank; as only 38 respondents (i.e. 22%) saved money in the bank. This may be one of the reasons why the entrepreneurs lack access to bank credits. Some of them were even afraid of keeping money in banks because of their past experiences with some financial institutions such as the National Bank, Forum bank and Neighborhood Bank Limited. Only 5% of the respondents saved part of their excess funds in their houses for immediate cash needs.

Small business in a way, is an extension of the owner, hence, it becomes difficult to separate the business from the owner without causing distortions. This is also the case with aso-oke entrepreneurs because fifty-six (56) respondents confirmed that they usually withdraw business funds for personal use. This is one of the reasons why during period of low sales, most entrepreneurs experienced shortages of working capital and abrupt production stoppage or reliance on trade credits as a source of working capital.
Profit margin desired by the entrepreneurs
In Table 6, a greater percentage of the respondents desired to earn a profit of N400 (i.e. 20% margin) on aso-oke that cost N1,600. This amounted to 38.29% of the respondents. Only 9.14% desired a 27.3% profit margin. 32%, 9.71%, 6.86% and 4.0% of the respondents desired N200, N100, N300 and N500 profits respectively. On the average, the profit margin desired by the entrepreneurs was 16.28%. This result calls for further analysis.

In the first instance, the profit margin is very small for the entrepreneurs to sustain themselves especially with the economic situation in the country.  Moreover, the profit margins as desired by the entrepreneurs were gross profit margins. This is because most of them could not adequately identify and account for relevant cost items in manufacturing process. For example, direct expenses such as spreading cost and running costs (overheads) were not accounted for by the entrepreneurs in their estimates of total cost of production. This implies that the result above will further reduce if all these costs are given proper considerations.

In addition, the entrepreneurs do not regard their profit margins as a matter of policy. They often change their desire from time to time depending on market situations. They can even sell their products at zero or negative profit margin especially when they embark on sales clearance or when they were in need of cash either for personal reasons or for business purpose. Whether this applies to all the entrepreneurs in the two (2) markets-based associations is another area of importance.

Test of Hypothesis II

Ho: There is no significant difference between the means of profit margins desired by the entrepreneurs in the two (2) markets.

To test this hypothesis, the sample size was divided into two groups using the two market-based associations: Oyo and Ibadan and their responses were recorded differently as to the profit margins desired by them. The Z–score was used because the sample size in the two markets is greater than 30, hence, the sampling distribution of the mean is assumed to be approximately normal. The test results are presented in Table 7. The acceptance region of the test at 5% level of significance is within + 1.96 under the standard normal curve. Since the calculated value of Z falls within the acceptance region, we accept the null hypothesis that there is no significant difference in the profit margins desired by the entrepreneurs in the two (2) markets.

Cost of capital and profit margins desired by the entrepreneurs
Table 8 shows that 132 respondents knew that the capital they used have cost and only 43 respondents (i.e. 24.57% of the total respondents) did not know this. To further reveal the characteristics of the entrepreneurs, analysis of the profit margins desired by the entrepreneurs and their responses to cost of capital was made in order to provide background information to the reason why most of the entrepreneurs desired low profit margins. Table 9 shows that about 48% of the entrepreneurs (i.e. 63) that answered affirmatively desired profit margins below the risk-free rate of return, which is currently at about 20% and only 69 entrepreneurs who knew the funds they employed have cost desired profit margins above the risk-free rate of return. Also, more than half of the respondents (i.e. 22) that was ignorant of the existence of cost of capital desired below 18%. As financial managers, the entrepreneurs should desire profit margin that is greater than the risk-free rate so that the risks taken in investing in the business would be compensated for.

 

Pricing policies of the entrepreneurs
Table 10 shows that 83.43% of the respondents charged prices based on cost-plus method i.e. the cost of production is calculated after which a certain percentage or an amount of profit added to arrive at the selling price. Eight (8) respondents (i.e. 4.57%) charged prices based on market ruling prices and eleven (11) respondents considered prices that customers are willing to pay as being worthwhile while ten (10) respondents charged prices based on total cost of production.

It was discovered that some respondents used more than one pricing policy and a number of reasons were deduced for this during interview: fluctuations in market demand, reduction in materials price, entrepreneur’s immediate need for cash and the number of entrepreneurs producing a particular sample of aso-oke. It was discovered that an entrepreneur in dire need of cash may sell his products at a price that customers are willing to pay in order to set off a debt that may bring his personality into disrepute e.g. payment for market contributions or  trade debts. This therefore shows that most of the entrepreneurs lack financial management principles and controls in their business.

Ascertainment of total cost of production
Another interesting research finding relates to how the entrepreneurs ascertain total costs of production. Not all the respondents considered and accounted for all items of costs incurred in production and selling. Table 11 shows that all the respondents considered material costs in the computation of total cost of production and 57.14% of the respondents included labour cost. The entrepreneurs that used apprehenticeship, unpaid family workers, children and foster children do not apportion costs to these sources of labour and hence, not considered in pricing. This is one of the reasons why there exist price differences on the same sample of aso-oke in the market.

The table further revealed that 88 respondents considered direct expenses such as spreading cost, processing cost and dyeing cost in computation of total cost. Also, 47.43% and 44.57% of the respondents considered overhead costs of production and sales and entrepreneurs’ rewards. It can therefore be deduced that only 78 respondents computed their cost of production based on total cost concept which most of them claimed they were using in previous analysis.

Summary and conclusion
Aso-oke production is one of the household businesses in Nigeria comprises of the owner, his households and few hired workers. Majority of the respondents are mainly businessmen with little or no education and who lack modern knowledge necessary for effective management of small firms and they did not keep adequate records of business activities. The major sources of capital to the entrepreneurs are personal savings, retained profits and trade credits. Few entrepreneurs keep money in the bank and hence, majority of the entrepreneurs do not have access to bank credits.  Like in any other small businesses, the entrepreneurs depend largely on personal savings, trade credits and retained profits to finance their businesses; hence, the industry mobilizes small savings for productive purposes. Neither financial institution’s backings nor government’s patronage is enjoyed by the cottage industry.
Besides, most of the entrepreneurs regarded business cash flows as income, they lack cash and stock control mechanisms as their capital were found to be tied down unnecessarily on materials and finished products. Also, the business is less liquid because of the variability in profitability and greater uncertainty in business cash flows and this made forecasting and planning unappealing and often viewed as time wasting. The entrepreneurs lack proper profit planning such as costing, procedure and efficient pricing policies and there is no significant difference between the profit margins desired by the entrepreneurs in the two markets. The profit margins desired by the entrepreneurs are relatively low when compared to the risk-free rate of return in the money market. It can therefore be concluded that aso-oke entrepreneurs did not carry out proper financial management activities in their business operations.

 

Recommendations
Based on the summary and the conclusion reached above, the following recommendations aimed at ensuring proper financial management of aso-oke business are recommended: Firstly, the entrepreneurs need to undergo higher education to help them improve on their business attitudes and enhance better performance. Some of them need to undergo entrepreneurship education and workshops, seminars and conferences should be organized to enlighten them on modern business management and records keeping as these will enhance quick and effective decision-making process. The entrepreneurs also need to be conscious of the various principles of financial management such as time value of money, as too much funds were tied down on inventories.

Secondly, the entrepreneurs should adopt proper profit planning such as costing, pricing and forecasting. Aso-oke production is a manufacturing enterprise therefore; the business should be operated and managed as such. With adequate costing procedure, all relevant items of costs would be accounted for and net but not gross profit will be referred to as the business profit. A simple format that can always be used to fix prices of aso-oke is given below to demonstrate how entrepreneurs should accumulate production costs before prices are arrived at bearing in mind entrepreneurs’ pricing policy, market conditions and other factors. The pricing policies of the entrepreneurs should take into consideration the risk-free rate of return in the money market as this will help them desire greater profit margins that will enable them operate their businesses for longer period.


Calculation of Selling Price- Format
                                                                                                        N
Cost of Production:
Direct Material cost    (cost of threads)                                          xxxx
Direct Labour cost                                                                           xxx
Direct expenses (e.g. rolling and spreading costs)                           xxx
            Prime cost                                                                          xxxx
            Add: Other factory costs                                                                 xxx
            Production cost                                                                  xxxx
Add: Administrative and Selling Expenses                     xx
            Other Indirect Expenses                                      xx            xxx
Total Cost of Production                                                              xxxx
Add: Net Profit Desired (a %age of the total cost)                       xxxx
Selling Price                                                                                     xxx


Finally, policy programmes of government at various levels should be directed towards the development of small businesses like aso-oke production. Programmes to channel credits to the entrepreneurs should be put in place as this will assist the entrepreneurs to overcome lack of access to institutionalized credits. The credits or incentives should be directly provided to the entrepreneurs’ associations or cooperatives that will serve as intermediary between government and the entrepreneurs.

References
Atanda F. (2004): ‘Evaluation of Financial Management of Aso-oke Production in
Iseyin’.An unpublished Field Work Report for the Award of Master in Business Administration submitted to the Department of Management and Accounting, Obafemi Awolowo University, Ile Ife.

Callus R. (1992): ‘Industrial Relation at Small Business Workplaces’. Small Business
            Review.  (Bureau of Industrial Economics). Page 122.

Inang E. (1993): ‘A Review of Small-Scale Enterprises Credit Delivery Strategies in
Nigeria’. A CBN Research Department Occasional Paper No 5, March 1993.

Ojo A. (1984): The Nigeria Financial System. Ibadan. Heinemann Publishing Nigeria
Limited. Page 44.

Olowe R. (1995): Financial Management: Concepts, Analysis and Capital Investments.
            Lagos. Briely Jones Nigeria limited. Page 1-19.

Omopariola  (2000): ‘Financial Management: Nature, Scope and Objectives’. A lecture
Note on MBA 670: Business Financial Management at the Department of Management and Accounting, Obafemi Awolowo University, Ile Ife.

Pandey I.(1983): Financial Management. (3rd edition). New Delhi. Vikas     Publishing
            House PVT Limited. Page 3-10.

Peacock R. (1985): ‘The Small Business Finance Function’. The Australian Accountant
            (January-February). Page 42-48.

Peacock R. (2000): ‘Understanding Small Businesses: Financial Management of Small
            Firms’. The Australian Accountant (January-February). Page 15-33.

Petty J. (1978): ‘Financial Differences between Large and Small Firms’. Financial
Management (Winter). Page 67-68.

Roberts A. (1994): Capital Investments for Small Businesses’. Accounting Forum.
March. Page 1-4.

Appendices

Table 1: Educational Distribution of the Entrepreneurs


Level ofEducation

Respondents

Percentages

None

33

18.86

Primary

88

50.29

Secondary

35

20.00

Post – Secondary

16

9.14

Tertiary

3

1.71

TOTAL

175

100.00

Source: Field Report, 2009

Table 2:   Record Keeping of Aso-oke Entrepreneurs


Alternatives
          Respondents

Percentages

YES

73

41.71

NO

102

58.29

TOTAL

175

100.0

Source: Field Report, 2009

Table 3: Responses to Record Keeping Activity of Entrepreneurs


Levels of education

Responses

Total

Yes

No

None

13

20

33

Primary

35

53

88

Secondary

10

25

35

Post– secondary

12

4

16

Tertiary

3

-

3

Total

73

102

175

       Source:     Field Report, 2009

Table 4: Sources of Finance to Aso-oke Entrepreneurs

 

SOURCES OF FINANCE

INITIAL CAPITAL

WORKING CAPITAL

TOTAL

No of
respondent

%ages

No of
Respondents

%ages

No of
Respondents

%ages

Personal savings

87

49.71

57

32.57

144

82.28

Parents/ Relatives

43

24.57

-

-

43

24.57

Contribution

55

31.43

29

16.57

84

48.00

Retained profits

-

-

59

33.71

59

33.71

Bank loans

4

2.28

2

1.14

6

3.42

Inheritance

10

5.71

-

-

10

5.71

Trade credits

-

-

59

33.71

59

33.71

Borrowed money

14

8.00

23

13.14

37

21.14

Cooperative

6

3.43

-

-

6

3.43

 

 

 

 

 

 

 

Source:  Field Report, 2009
Table 5: Analysis of Cash Management by the Entrepreneurs


Alternatives

Number of respondents

Percentages

Personal use

56

32.00

Save in the bank

38

21.71

Save the money in the house

10

5.71

Buying more materials

114

65.14

Source: Field Report, 2009

Table 6: Analysis of Profit Margins Desired by Aso-oke Entrepreneurs


Profits (N)

Margins (%)

Number of Respondents

Percentages

100

6.25

17

9.71

200

11.00

56

32.0

300

16.00

12

6.86

400

20.00

67

38.29

500

23.70

7

4.00

600

27.30

16

9.14

TOTAL

 

175

100.00

Source:  Field Report, 200
Table 7: Results of Z – Score Test     


Markets
Sample Size

Mean (N)

Standard deviation

 Z – score

OYO

95

165.79

39.21

 

1.70

IBADAN

80

155.625

39.5

TOTAL

175

321.415

78.71

            Source: Field report, 2009

Table 8: Analysis of Responses to Cost of Capital by the Entrepreneurs


Alternatives
           Respondents

Percentage

YES

132

75.43

NO

43

24.57

Total

175

100.00

   Source:  Field report, 2009
Table 9: Responses to Cost of Capital and Profit Margins Desired


Profit margins
(N)

Profit margin
(%)

Responses

Total

Yes

No

50

5.9

14

3

17

100

11.11

40

16

56

150

15.8

9

3

12

200

20.0

53

14

67

250

23.8

5

2

7

300

27.27

11

5

16

Total

 

132

43

175

Source:   Field report, 2009
Table 10: Pricing Policies of Aso-oke Entrepreneurs


                      Pricing Policies

Number of Respondents

Percentages

  1. Total cost of production plus profit margins

156

89.14

  1. Prices that other entrepreneurs are charging

8

4.57

  1. Prices that customers are willing to pay

11

6.29

  1. Total cost of production only

10

5.71

   Source:   Field Report, 2009
  Table 11: Analysis of Total Costs of Production of Aso-oke


Costs components

Number of Respondents

Percentages

Materials costs

175

100.00

Labour costs

100

57.14

Direct expenses

88

50.28

Overhead costs

83

47.43

Entrepreneurs’ rewards

78

44.57

    Source:        Field Report, 2009