Are you starting a new business in Pakistan? Great, but do you know what challenges you may face before and after starting a business in Pakistan? No? Okay, not to worry, lets discuss
By Mohammed Adnan
There are many challenges young entrepreneurs encounter in Pakistan and chief among them is the country’s weak contract enforcement system. In many ways this is creating many difficulties for the progress and growth of young enterprises and start-ups. It’s therefore become a significant source of stress for young entrepreneurs too. According to the World Bank’s Ease of Doing Business Report 2019, Pakistan stands at number 156 out of 190 countries in terms of enforcing contracts. It bears mentioning that this is no surprise as the improvement of the contract enforcement system has not been a government priority during the past few years.
There are many brilliant, young minds with ideas for sustainable businesses but unfortunately, most of them don’t have suitable financial support. The problem of limited access to capital or finance is widespread. Even the micro-finance institutions in Pakistan have reservations about assisting young entrepreneurs. To reference the World Bank report again, Pakistan stands at number 112 out of 190 countries in terms of making credit available. Moreover, existing and new enterprises face challenges in getting timely payments for their products and services.
Pakistani entrepreneurs also face challenges in terms of product optimisation with many business owners aimlessly following trends and launching a business without market research. Sometimes these young entrepreneurs emulate ideas from abroad without bearing in mind the socio-cultural elements of Pakistani society. In addition to this, some also try to replicate start-up models which are often copied from their university assignments. These approaches create problems for entrepreneurs when they join the real business world.
Another challenge faced by young entrepreneurs in Pakistan is the bureaucracy around education. Many higher education institutes focus only on theoretical aspects of business and entrepreneurship, and are not concerned about the practicality of business. These institutes and their teachers lack the ability to realize the importance of entrepreneurial ideas that bring ease of business and strategy to the entrepreneur arsenal. Their only concern is providing theoretical knowledge and to complete the outdated syllabus. Sadly, this is preventing students from thinking out the box and coming up with innovative entrepreneurial ideas. Often, these professors have no practical experience of businesses or markets. There is an urgent need to bring the business community into education institutes (even on a visiting basis), so that they can teach students the practicalities of doing business. This will help students learn about business techniques and also think innovatively in a competitive environment.
As a concluding remark, entrepreneurs in Pakistan face a dire lack of mentorship opportunities. It’s become commonplace in many countries around the world for business to offer mentoring sessions but also spend time meeting with youth and also young entrepreneurs in need. But in Pakistan, one hardly sees such support from senior members of the business community who tend to be quite reserved about their business successes. This approach creates additional difficulties for young entrepreneurs who want to learn from others’ experiences in order to avoid major mistakes in business.
Young entrepreneurs need encouragement, support, attention, and an inclusive environment to work in so that they can contribute to the economic prosperity of Pakistan.