Funding

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Recommended: Challenges for small medium enterprises

1. Funding

Funding is one of the key aspects to have when staring a small business. But it is the hardest feature to get. Small businesses have a challenge finding capital to start their business, in an economy like South Africa the cost of capital could instantly change depending on your business.

This goes for big businesses and small. Large businesses still seek investors to provide them with the right recourses, and will face a lose which will require them to invest more capital.

Small businesses and the businesses owners may not have enough money to start with and will either have to take out a loan or find partners. Having a loan is very risky. In terms that the business might fail and you will have to pay back the loan with interest, and with increasing interest percentage rates you will be in debt for a very long time.

Funding holds a solid key foundation for any business. Failure to provide the right amount falls in one of many categories.

If you provide too little capital towards the business you put yourself at risk of running out of resources very quickly. This comes into play of managing the recourses you have in a way that you know exactly how much funding you need. But still having the right amount of money might not change a thing. As the economy develops or prices increase and decrease you just might have to put more money into the business, it’s not an exact figure, but a figure which you can work around.

Funding is one of many challenges that all new business face. The challenge of taking a risk of putting your own money into the business and losing everything, or finding partners who will take a cut of your earnings. This challenge actually causes many owners not to go into business or fail from stari...

... middle of paper ...

...am and may face many challenges he is not familiar with that may cause disfunction in the business.

Poor management team means poor execution. This can lead to loss of profits as the products being produced aren’t quickly being developed in time due to a lack of productivity. Productivity is a major challenge small startup businesses face. It can be overcome with an increase in efficiency of time used proper management.

Hiring a weak team will cause your business to be weak. There is a well-known saying: “A players hire A players, and B players only get to hire C players (because B players don’t want to work for other B players)”. A strong team will lead to a strong business.

Challenges facing team management can depend on the people you hire and the leader in charge. In order to be the best you have to be with the best. And lead with the best of your ability.

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