One of the main objectives of a business is its expansion. It is the main factor that can guarantee its sustainability. However, some companies face obstacles that slow down their activity and expansion. In order to ensure the good development of your activities, it is important to know a little more about these obstacles to anticipate the solutions. In this case, discover these obstacles in this article.
1. The lack of skills in the management of the company
To ensure the success of a project, an entrepreneur must, above all, have the necessary skills to manage his business. Today, most entrepreneurs exaggerate their skills in order to accelerate the growth of their business. They must always be on the lookout for new management methods.
However, instead of speeding up, this only leads to the company falling into the abyss. The lack of know-how and knowledge leads to gaps in the mastery of management tools, which implies a decrease in the company’s activity. This becomes an obstacle to its development.
2. Financing and choice of investments
It is often difficult to find partners when starting a business, especially for a small local business. As small businesses have little capital, their commercial reputation is almost non-existent, and this is a criterion that leads to the reluctance of investors.
There are low-interest loans for small businesses in some countries to address this problem. However, in other countries, banks are unable to meet the demand, and entrepreneurs are forced to take out private loans. In addition, some banks offer loans at a reasonably high-interest rate, between 19 and 34 percent, which is expensive for small businesses, and the process of obtaining it is complex.
3. Administrative obstacles
These administrative obstacles concern, most often, the particular difficulties linked to business development and caused by imperfect state regulation and control mechanisms. They also relate to certain agencies that adversely affect the interests of small businesses.
4. Complexity of the legislation
It is true that the legislation governing the field of entrepreneurship is quite complicated and that the standards and requirements imposed by the state are constantly changing. Moreover, registering a small production company involves a very complex procedure and huge expenses, especially in obtaining a license.
It can be said that the complexity of the legislation complicates the organization and management of the business. Moreover, the instability of the legislation is also a problem because entrepreneurs do not know where to turn, and instead of doing their work properly, they have to follow the changes in the legislation.
5. Lack of information
In addition to the legislative complexity, small businesses suffer from a lack of information, especially in the field of taxation. This problem is most often caused by a lack of communication on the part of tax officials. How to calculate taxes and what documents to present to officials are difficulties that many local small businesses face.
6. Lack of qualified and motivated staff
Since small local businesses have little capital (shoemaking, plumbing, etc.), they cannot afford to hire highly qualified personnel. Furthermore, highly skilled personnel are usually recruited by larger companies, leaving little choice for the leftovers.
Most hired workers do not have the required qualifications for the job or the motivation to do the job. This is especially true for the younger generation. The latter does not seem willing to make efforts and progress. In spite of the improved working conditions with salary bonuses, the motivation of the staff is decreasing, and qualified managers are becoming increasingly rare.
Starting a new business is never easy, and it demands a lot of patients and overtime, it will grow, and you can’t expect it to go from point A to B in a day or 2. Sound off in the comments section below and tell us what you want to read next and if you want to read more about this type of blog.