Highlight four pitfalls likely to be experienced by an entrepreneur in developing countries
Four pitfalls likely to be experienced by an entrepreneur in developing countries are.
- Insufficient capital: In order to function, businesses need money, and a good share of it. Entrepreneurs in developing countries usually have trouble finding the resources to start either finding funding, attaining credit or pooling personal financial resources to try and make ends meet. More experienced companies usually suffer from insufficient capital when their spending starts to outweigh their revenue.
- Poor growth speed: Another key reason for business failure for entrepreneurs in developing countries is inappropriate growth rate. Growing too fast comes with a different set of problems demand becomes too high, resources become overworked or poorly trained, and customers have inconsistent experiences. There is need to work closely with all departments, especially marketing team and human-resources department, to make sure the company achieves a reasonable, steady pace of growth.
- Poor infrastructure: Most developing countries have poor infrastructure hindering growth of entrepreneurs since where there is poor transportation making delivery of products to places where they are needed hard.
- Corruption: Not only will government officials demand bribes, but they may revoke business licenses or seize property without warning. Working with the government can be a nightmare, leaving entrepreneurs in developing countries uncertain about the legal status of their business, making them vulnerable to corrupt officials and this may eventually lead to the collapse of their businesses.
- Insecurity: Most developing countries have insecurity issues, hindering entrepreneurs from thriving. Without an effective criminal justice system, an entrepreneur could lose everything and have to start all over.