While starting a business, the businessmen usually face many problems in financing them and deciding that which mode should be used to finance. In the beginning, most of the companies are scarce in resources that are the core input of the business i.e. finance, management, skillful human resource etc. having problems in a way is not a big hurdle if one has courage to face them. To get anything in your life, you will pay for it. So at initial every business faces challenges that need to be satisfied and addressed properly.
The business will definitely got stuck if the people do not finance its activities. This affects the cash flows of the business badly. Anything and anyone that is related to the business either the returns or the stakeholders are affected by the improper cash flows of the business cycles. So the improper management of cash flows is the big problem for financing the business operations.
Another thing that affects the financing activities of the business is the government regulation. The government of any country is the authority introducing and implementing the new regulations in the country. The businessman being the citizen of the particular country will definitely go in accordance of those regulations to get the benefits and profitable business legally. These regulations create many financial problems and cut the profits easily. The only solution can be doing business in such countries that have low business or financial barriers i.e. business registration, its license, other trade barriers, etc. the only solution that can be done for this problem is to study the jurisdiction of all countries and then make an arrangement to have a business in the country having small hurdles.
The main problem in addition to the above mentioned ones is the taxes implied by the federal board of revenue. This is also the main reason that makes the company’s profit to get down to minimum. With every single profit or revenue percentage, the taxes level and the amount charged per investment and return ill exceeds the normal. Taxes are also the big hurdle in financial condition of the company and it also needs to be addressed. The same upper solution can also be applied on this by studying the tax rates and other costs of the countries and ten start the business. It also differs from one jurisdiction to another and the person or owner could search in depth for the suitable one.
Human resource problems are also becoming a huge hurdle for the financing activities. Most of the companies are investing in the employees that are loyal for short-term and when they got enough training, they just switch to some better option. Hence, losing one trained employee, and hiring another, then training him according to the job and organization requirement is another big problem that needs extra financial expenses creating financing problems foe the companies. So the companies should try to retain the employees instead of doubling the costs and losing the skilled labor and recruiting the new ones having no experience.
These all above mentioned problems are the one that affects the financing of the business badly and by taking decisions prudently with consideration of the above mentioned suggestions, the businessmen can deal successfully in their fields.
June 29 2011 10:29 am | Finance