SME (small and medium enterprises)
Startup SME and its potential barrier
Ayan Art Furniture and SME: - Ayan Art Furniture has to establish its SME in any country and have to provide the following dimension to promote the economic, development, growth, employment and distribution. The successes are the slaves of those who face and perceived perception of nature. For solution of SME need the following point:-
- The identification of new venture opportunities
- The field problems of starting a new enterprise
The identification of new venture opportunities: - An entrepreneurial has to explore the following analysis to startup a new venture opportunity,
- External resources
- Internal resources
External resources: - External resources for startup a new venture opportunity is as fellow:-
- Government agencies
- Newspaper, professional journalism, fashion trend social and trend journals.
- Ideas from other entrepreneurial or other organizations
- Trade fair and exhibition display new product and services
- Computer, technology, research and development
Internal resources: - Internal resources for startup a new venture enterprise is as fellow:-
- Analysis the existing problems and find out solution.
- Solve the similarities problems which have same concepts and elements.
- Adopting the new ways of solutions and elements.
Ayan Art Furniture can eliminate the basic barriers to startup his SME by adopting above identification of new venture opportunities and field problems of a new enterprises. The following reasons can also potential for growth SME while selecting new venture opportunities:-
- Lack of objectivity
- Marketing myopia
- Lack of product differentiation
- Improper estimation of financial requirements
SME potential for growth in Pakistan
Business environment: - The large size of SME sector limited the ability of the government and business support institutions to achieve the competitive coverage by support programs. United Kingdom introduces the “Think Small First” initiative, which requires all government organizations to access the impact of their actions on small business prior to implementation. Fortunate small business also ignore due to ISO certification and environmental standard in Pakistan. Medium business also has issues like places, time, location and quality. Pakistan mostly deals with handcraft production which also has little effort for promotions and exhibitions.
Relationship between government and SME: - The relationship with government and SME is flawed. Government supports only those products which highly standard, quality and profitable. The first barrier between government and SME is language barrier. Documentation is in English language but our SME are not highly qualified. Only 10% peoples are graduates who can not eliminate the barrier of law and regulation between the labors which printed on material.
Taxation issues: - Large number of SME drift informal due to high taxation rate. SME face high Tax and lack of knowledge about taxation laws and rules. SME afford Taxation issues in Pakistan in many ways some of them are as fellow: -
- High tax rate and no documentation.
- Expensive accountant and legal advisory.
- High cost of book keeping
- Time consumption by a tax payer to handle tax issues.
- The SME are harassed by taxation authorities.
Labor issues: - Labor issues are the second most important and biggest issues in the world. SME have to face fifty six (56) laws and regulation with some of them specific in industry. Government established institutions like (WEBCOP) worker employers Bilateral Council of Pakistan. Government of Pakistan also works for development and labor inspection policy to monitor the development in SME.
Finance issues: - Access to equity and debt finance has a tremendous potential to growth of SME. 67% of finance of SME in Pakistan depends on equity for development and only 7% come from debt from other institutions like banks. SBFC and YIPS also provide wide loan and funds also get back high amount of loans in Pakistan. But effort and relation between institutions are weak due to lack of national policy. AAF have to face many hurdle and successive in SME. AAF can startup with the light of “Think Small First”.
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