Why do businesses in Pakistan fail?
Post-covid Pakistan has seen a number of businesses strike the ground. From the ever-rising dollar value to the complex regulatory processes, several factors contribute to the failure of businesses in Pakistan.
The high dollar prices can undoubtedly be marked as one of the top contributors that make it difficult for businesses in Pakistan to sustain themselves. The unpredictability of the international market makes it difficult for local businesses to access and assess the capital needed to start and maintain their businesses. Additionally, the increased cost of importing resources makes it further difficult for businesses to acquire the resources needed to succeed. This lack of access to capital and resources hampers the growth of businesses. It is evident that without sufficient access to resources and funds, businesses cannot launch innovative projects or hire the workforce they need to succeed. Ultimately, these limited resources lead to compromised input and thus limited output.
Another reason for the failure of businesses in Pakistan is the lack of entrepreneurial acumen. In Pakistan, there is a culture of risk aversion when it comes to venture-based activities which can prevent entrepreneurs from taking the steps that are necessary for turning their idea into a successful business. Additionally, the legal framework for incorporating businesses and registering intellectual property rights is poorly defined, making it difficult for entrepreneurs to protect their ideas and investments. The regulatory setup further adds to the troubles of young businessmen. Tiresome formalities and inefficient procedures shatter the morale of innovators and often force them to leave the journey mid-way.
The reason this happens is that the businesses have not measured all the difficulties due to a lack of training on entrepreneurship and the potential that businesses can ultimately offer in terms of economic development and job creation. This lack of long-term planning and vision can lead to the failure of businesses due to the fact that, if entrepreneurs do not properly plan out their future steps, they run the risk of being caught by surprise by the challenges of the time when businesses are starting to mature.
Another factor that leads to the failure of businesses is the lack of professional knowledge among the hired workforce because the experience and expertise of employees are as essential as that of the employers when it comes to the success of a business. Without a proper team of professionals, businesses may not gather a good understanding of the market, how to efficiently present the business in the market, and more. Without the proper knowledge, businesses not only fail to secure sufficient investments but may miss out on other opportunities that could have allowed them to succeed. prevent entrepreneurs from taking advantage of the opportunities that arise.