When a person enters in the professional life, he has to make some decisions for his future. To get a job or start a business is one of them. Both ways of earning come with their own specific pros & cons. In Pakistan, ratio of entrepreneurs is next to nothing. Here i have described some crucial reasons which contribute in the process of diverting the mind of an entrepreneur from taking such risks.
A newly started business is same like a bird who is learning how to fly. A fledgling bird needs low air pressure and free of fear environment to learn to fly until its wings becomes powerful enough and it masters everything about flying. Similarly, a startup needs a stable economic condition, low taxation system and a continuous supply of available resources until it contributes to and becomes a part of the economic cycle. Unfortunately, due to down falling economic conditions and power crises, Pakistani government is not even supporting the already stable businesses and most industries are shutting down or shifting their operations. Recent wave of privatization of public sector entities proves this situation. In such condition, nobody is taking the risk of investing to initiate something new in Pakistan.
Among several reasons of low startups ratio in Pakistan, one is the direction of mental grooming of pupils at high school and university levels. Our students are taught and prepared to become an employee but not an employer. They are taught everything about their fields of study, about office and workplace behavior and environment but are never taught how to think out of the box. In response, an average student of university only dreams about getting a lavish job with plenty of perks and privileges after graduation, but only few of them are capable enough to think about starting their own businesses.
Most of the time small startup and domestic businesses are financed by investors hard earned earnings & savings. Therefore, an entrepreneur thinks 100 times before taking an initiative because he fears of losing his savings. It is true that there is a high risk factor permanently attached with the business and it can’t be neglected, but it is also a fact that earnings of a business are also much higher as compared to salaried job. The risk of loss or goods damage can be reduced by proper understanding of product, market trends and by knowing and targeting proper population.
Businesses with low investments face tough times as managing cash flow is also a big challenge for new entities. In the first 2,3 years’ profits and incomes are considered as investments on the same business from which they were generated. There are many fledgling businesses out there who wish to build long term tangible products that will change our world but most of them don’t have the proper financial backup and they survive on highly effective and foolproof cash flow management practices.
Without understanding the business of poultry, one shouldn’t start a business of poultry feeds or sheds. Understanding everything about product line on which one is going to invest is crucial at the beginning. Here, most of the people follow the trends of the market and invest in a business whose market is yielding high profits for the time being, or they copy a foreign idea and try to implement it in their own culture. Competition is healthy for maintaining the pricing strategies, but before taking such decisions one should keep in mind that some markets are up for some reasons. There is high risk of changing market trends is involved as UPS and generators business will only give high returns in the events of power crises, similarly a co-working space for freelancers which is a successful business in developed countries, may not nurture in Pakistan.