Ask Leo: What is the cause of the failure of small scale enterprises in Africa?

avatar

IMG20220630WA0003.jpg
Source
Small scale business is easy to start because it doesn't require much capital to start. Which makes it the most common form of business in Africa due to the underdevelopment .
Small scale business if well managed , can lead to the birth of multiple chain store or large scale business. But it's just so unfortunate that most small scale business don't last long before it collapse. There are so many factors responsible for this. Which are;

  1. Lack of access to credit facilities; if small scale business can easily Access credit facilities which they can use to keep their working capital, then it will last much longer.
  2. Lack of multiple source of income: If the business owner doesn't have other source of income, and based all their expenses on the profit realized in the business, turnover would be difficult and as time goes on, the capital itself would be spent which can lead to death of the business.
  3. Inability to separate family from business; Africans value family alot and won't hesitate to sell on credit to a family member Which turns to bad debt eventually.
  4. Government policies; some government policies and programs don't favour small scale business such as high tax payment, expensive registration e.t.c

Small scale business needs government support, proper record keeping, disciplined spending, clear separation of business from family to be able to grow tentacles in no time.

Thanks for visiting my blog @tobywalter cares

Posted Using LeoFinance Beta



0
0
0.000
2 comments
avatar

pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 112 of my contest just started...you can now check the winners of the previous week!
15

0
0
0.000
avatar

Congratulations @tobywalter! You have completed the following achievement on the Hive blockchain and have been rewarded with new badge(s):

You have been a buzzy bee and published a post every day of the month.

You can view your badges on your board and compare yourself to others in the Ranking
If you no longer want to receive notifications, reply to this comment with the word STOP

Check out the last post from @hivebuzz:

The 7th edition of the Hive Power Up Month starts today!
Hive Power Up Day - July 1st 2022
NFT for peace - Thank you for your continuous support
Support the HiveBuzz project. Vote for our proposal!
0
0
0.000