Major Constraints on Small Business in Zimbabwe
Introduction
It is an undeniable fact that small business has become a crucial part of the business environment of any country. What is the small business? A small business is owned and operated privately, and it has a few employees and a small volume of sales. Depending on the countries and industry, the legal definition of "small" is usually different. In Australia, “a small business is defined by the Fair Work Act 2009 as one with fewer than 15 employees”( Fair Work Act 2009). Even thought individual small business only creates a small number of position for unemployed people, the quantity of various small businesses is enormous. They together can provide a lot of positions and play a significant role in the economy. The small business can be fast and flexible, and close to their customers. They can also perform an essential substitution role. Additionally, the small business promotes the economic growth and also makes important contributions to our society. However, the developments of small business are constrained by many issues such as lack of management skills, lack of credit, corruption, inflation and the poor infrastructure. Not only is the small business limited by these internal factors, but also is limited by the external environment.
This report will discuss how the developments of small business is impacted by the social, political, and economical environment in Zimbabwe. Firstly, the corruption in Zimbabwe brings a great influence on the small business, which introduces nonscientific allocation of resources. Secondly, the hyper inflation in Zimbabwe also severely affects small businesses, which makes long-term budgeting and planning futile. Thirdly, the limited access to finance in Zimbabwe also prevents the small businesses from growth. Finally, the informal sector induces unfair competitions among small businesses. We will introduce how to improve small business environment in Zimbabwe.
Sub-section 1. Constraint from corruption
The
It is an undeniable fact that small business has become a crucial part of the business environment of any country. What is the small business? A small business is owned and operated privately, and it has a few employees and a small volume of sales. Depending on the countries and industry, the legal definition of "small" is usually different. In Australia, “a small business is defined by the Fair Work Act 2009 as one with fewer than 15 employees”( Fair Work Act 2009). Even thought individual small business only creates a small number of position for unemployed people, the quantity of various small businesses is enormous. They together can provide a lot of positions and play a significant role in the economy. The small business can be fast and flexible, and close to their customers. They can also perform an essential substitution role. Additionally, the small business promotes the economic growth and also makes important contributions to our society. However, the developments of small business are constrained by many issues such as lack of management skills, lack of credit, corruption, inflation and the poor infrastructure. Not only is the small business limited by these internal factors, but also is limited by the external environment.
This report will discuss how the developments of small business is impacted by the social, political, and economical environment in Zimbabwe. Firstly, the corruption in Zimbabwe brings a great influence on the small business, which introduces nonscientific allocation of resources. Secondly, the hyper inflation in Zimbabwe also severely affects small businesses, which makes long-term budgeting and planning futile. Thirdly, the limited access to finance in Zimbabwe also prevents the small businesses from growth. Finally, the informal sector induces unfair competitions among small businesses. We will introduce how to improve small business environment in Zimbabwe.
Sub-section 1. Constraint from corruption
The