Issues Facing Small Businesses In Mauritius Economics Essay

Mauritius is a tiny island found in Sub-Saharan Africa. The united states comprises of many small businesses consisting of significantly less than 20 people which steadily operate contributing to the country's economic progress. Many people who have been lately unemployed have found a job in this sector. There are various help offered by the Government through the tiny Enterprises & Handicraft Development Power (SEHDA) which is currently common as SMEDA (Small and Medium Business Development Power) to people willing to set up new business in the united states. However these small businesses face problems like insufficient available human resources, insufficient management skills of owners, lack of credit, problem, and poor infrastructure. 70% of these businesses do not endure in the 1st year with their existence while the remaining die 5years after. After profound analysis of the market through this statement, an account is to be made to the planet Bank.

LACK OF AVAILABLE Individuals RESOURCES

In Mauritius, people prefer typically to work in reputed company's offices instead of small enterprises because of the position they portray and advantages which come along. For instance, a Chef at the Hilton Hotel is not offered the same benefits as that of a small restaurant offers. So employees want to work in acknowledged companies for better salaries, fringe benefits and job basic safety. People view themselves carrying out manual responsibilities in small businesses that they do not appreciate in the current time. There is also the fear of smaller businesses failing and workers being laid-off both at a young and old age. Small business might also ask their employees to work with extended hours without paying them or supply them with only a small compensation for the overtime. Chances of advertising and salary increase are weaker in comparison to big companies. However, these businesses do not have a pyramid organisational framework and business owners provide them with proper training and are rather close to their workers.

LACK OF MANAGEMENT SKILLS OF OWNERS

Lack of management can be an important issue for small business's inability. Many small businesses' owners lack training for owning a business or have not been well informed. Most professionals do not perform well their management styles and there is absolutely no proper planning, organising, leading and handling. Also, most businesses that are create are run by their owners, for example sole-traders and partnerships. They do not research the marketplace they are prepared to create or evaluate customers or method of advertising because of their unawareness about proper marketing strategies. Many of them are IT illiterate and unable to handle pcs or machines that have to be used to make their businesses activities easier. Many businesses come into existence with the main view of earning profits. Business owners do not arranged any objective or goals to be reputed or achieved by their employees. However the SMEDA provides training programmes to those setting up small businesses so as to make them feel relaxed with the field they may be going into. Training facilities are also given at the IVTB (Institutional and Vocational Training Panel) in order to help people, especially those in need of employment specialise themselves in domains like IT, textile, agriculture and automotive maintenance. (Unevec, 2003) There are present other different SME programmes like the National Women Businessman Council (NWEC) providing free lessons to women in handicraft and beauty treatment. (Day-Hookoomsing, 2003) These people can later setup their own small companies.

LACK OF CREDIT & CORRUPTION

Difficult usage of capital means is another reason for business inability in Mauritius. Many smaller businesses are more likely to fail because they don't have enough customers to buy their goods and services, resulting in no profits to recover their bills. Small corporations face unlimited liability and when they go bankrupt, not only their business assets are seized by the bank, but their personal devices also. Many small entrepreneurs do not enjoy high statuses on the Mauritian cultural ladder, thus they end up in economic problems after their business failure. Also, many smaller businesses exporting their products to European countries have to face competition between big businesses reselling their products at lower prices. Even though importing their recycleables to Mauritius, they have to pay tasks and there are quotas on the total amount to be brought in. Nevertheless devaluation in the country's money makes exports cheaper. Mauritius also forms area of the Southern African Development Community (SADC) that may render exports easier. These lenders cannot attain economies of size because of no mass buying, resulting in lower profits. There is create costs like municipality licenses to be paid to the federal government and which can prove to be quite high to small business owners just like a "dhol-puri" seller. Customers are also more willing to spend on goods made on large level sold cheaper than on handmade handicrafts which are believed as luxury and expensive goods. Addititionally there is the actual fact that Mauritians find themselves too brilliant and too wise to seek help from the various associations which offer loans at reasonable interest rates, including the DBM (Development Loan provider of Mauritius) offering a interest at12. 5% per annum (DBM, 2008)

Corruption is not too much in Mauritius. However it still affects small businesses. However it is present mainly by open public officers at the customs. For instance when big companies import their goods, they provide bribe to traditions officers so that they don't need to pay for heavy duty on their organic material. (Enterprisesurveys, 2009) This impacts small businesses that have to pay higher taxes on their brought in raw materials and it renders their cost of creation higher.

POOR INFRASTRUCTURE

Poor infrastructure is not an important issue in Mauritius. Nevertheless, the expense of land and rent to be paid is quite high. Commercial electricity has an increased price compared to the domestic one. It can also end up being difficult to find a location to set up a fresh business as small businesses have become saturated all around the island and to move to a place where there is little competition is difficult. It is important to say that the island comprises of good road systems, communication facilities like telephones and easy access to the internet. (Nations encyclopedia, 2010) Mid-air route and shipping sites are also good ones for imports and exports.

CONCLUSION

An efficient market current economic climate has as foundation smaller businesses. In Mauritius, the successful expansion of small company includes three fundamental challenges. Socio-political being the first, having as obstacle to make a middle class, which includes as purpose to stabilise a democratic politics system. The second challenge concerns the sociable aspect implying: creation of employment. Finally the third challenge is economic as smaller businesses are individuals of innovation, that the forthcoming industry is born and without which real breakthroughs are nonexistent. Energetic economic progress can be rendered possible if based on the foundation of small businesses. These three problems solely are sufficient to aid the observation that where smaller businesses are suppressed, an efficient market overall economy cannot exist. Mauritius consists of a stable Administration which can control such business activities and help them in case of crisis.

RECOMMENDATIONS

Although the climate of smaller businesses is quite good in Mauritius, suggestions can be provided for better business leads. Education is the better advice for better business environment. Business managers need to find topic markets to establish their products. Many business people are specialised in the making of only 1 good or service. The Government should provide various programs to them to allow product diversification. THE FEDERAL GOVERNMENT should also limit the creation of monopolies among big businesses. Taxes to small businesses also needs to be evaluated. Mauritian small enterprises should learn to work in teams so as to avoid persistent conflicts which many businesses face. There should be more encouragement for export of products. Specialists like the SMEDA should reinforce their SME programmes in marketing small businesses' products. Small businesses create occupation for the Mauritian society and enable them to earn a living as well as promoting financial growth of the country. More and more women have to be prompted in the working environment so that they can donate to their people' budget.

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