Starting a business in Pakistan, even under favorable circumstances, is not for the faint of heart. A woman starting a business in male-dominated and deeply conservative Pakistan is downright courageous. Yet, a growing number of Pakistani women, passionate about making a mark, are attempting to do just that. They should be encouraged. It is not only women who benefit from entrepreneurship but the national economy and the global perception of Pakistan as a progressive nation. Women in entrepreneurship have a far reaching impact on not just individuals but society at large. It brings about a culture of equality in opportunity. For the women, it builds self-confidence, self-reliance and self-empowerment. If the husband is disabled, the family does not become destitute or dependent on social services or extended family. If a husband is abusive, the wife is no longer hostage to social security provided by her husband or in-laws. Women also enrich the entrepreneurial landscape. They bring a uniquely feminine perspective, a collaborative style of management, better communication and introduce new services and products to the market. This article addresses some of the challenges faced by aspiring and active women entrepreneurs of Pakistan and how the circumstances can be improved to facilitate upcoming entrepreneurs.
Challenges for Women
We begin with the most tacit of challenges which is societal or cultural pressure on women to focus on family, get married and limit their horizons to house work. The reason for discouragement can be as petty as the men of the house feeling threatened by women empowerment. The general belief is that women are incapable of running their own businesses and they should not be exposed to outside world (mainly to men). To add to the seriousness, religion is often wrongly used to justify this position. Unlike men, women are not allowed to stay out of their homes for long hours not just because they have no respite when it comes to household responsibilities but also because of possible harassment or worse.
When women overcome the household hurdle, they face discriminatory practices in funding, mentoring or encouragement. There is little or no faith that the businesses will succeed. Males outside the household refuse to accept women in positions of power. There is lack of recognition for entrepreneurs on a national level and thus few people get to motivate themselves through local success stories. In other words, women face hurdles at every level from household to society to state.
Challenges for All Entrepreneurs irrespective of Gender
Women lucky enough to have attained familial support battle issues that all entrepreneurs face in a fragile nation-state: namely security, law and order deterioration, slow economic growth, inflation, bribery, corruption, shortage of basic resources (electricity, water, gas), lack of government interest, piracy and illegal squatting.
In business schools we are taught the importance of legalities concerning a business and the importance of registering one. However, in Pakistan there is no incentive for an entrepreneur to register the business or pay taxes. Weak institutions and corrupt political system push an entrepreneur to evade tax payment. At the stage when cutting costs is extremely important, the registration/tax payment step is often overlooked by entrepreneurs because it neither has advantages nor consequences. It becomes arduous for entrepreneurs to compete, especially in case of commodity products, when some businesses pay taxes and some don’t. As a result, there are low barriers to entry, increasing me too products and short lived businesses. For the consumers, this creates a sense of unpredictability and increased chances of a dissatisfied post purchase experience.
Due to high inflation, consumers are price elastic and switch to product/service substitutes with little or no cost. On the supply side entrepreneurs have no control over quality of raw material, unprofessional labor and unexpected market shut downs. Once a commitment is made by a start-up business to its clients, these factors lead to disgruntled customers and winning them back adds to the cost, time and effort required.
Lastly (but most definitely not the least) Pakistan lacks incubation centers for entrepreneurs. One of the most uphill tasks for an entrepreneur is to get funding for the business idea or to expand a running business. Fortunately enough, there are a few people/groups that have recently come up in Pakistan that attempt to help start ups reach the next level and also encourage and support people with ideas and passion for entrepreneurship. (A few examples are Ms. Sheeba Najmi, Ms. Kulsoom Lakhani, Shell tamer and IBA CEDAP.)
Tips for Women
The bright side to challenges is outcome after dealing with them. Challenges come with due lessons and leave you wiser if not successful as well. Having run a small business in Pakistan myself, I’d like to weave in part of my learning into the following tips for budding female entrepreneurs.
A lot of fresh business minds put their ideas into action during their college or university days. Students who have the opportunity to choose a degree before or during their business ventures, education in entrepreneurship would be more beneficial than an MBA for example. Entrepreneurship academics train you for business instead of training you for the corporate world. Also, you’re around like minded people and start building a relevant network. Frequent projects give hands on experience on how to deal with ground realities by running a simulated business venture. Business plan competition is another platform where you have the opportunity to meet potential investors, learn what other businesses are doing right and advertise your business to potential clients. Being active in such events is highly recommended to hone yourself and your business idea. Be flexible enough to alter your plans according to market changes, consumer shifts and lessons learnt.
While some of you might be inclined to rely on your instinct to start a venture, underestimating the power of planning can be dangerous. Preparing financial forecasts, strategy road-maps, resource allocation charts, setting timelines and goals would help you be crystal clear about where you stand, where you want to be, about the when and how. It also helps a great deal when you want to apply for funding. Another paramount consideration for a sustainable business is to utilize means and resources you already have (talent, skill, contacts etc.) instead of jumping into a business solely because you see market potential. In the beginning, it’s normal to feel pressured by the size of your business as compared to the market. Instead of being intimidated by big players, create your niche.
Once you know what you’re going to sell, it’s important to know and establish your point of differentiation. There is absolutely no shortage of substitutes in the market unless you have a novel product or service. Thus, making sure that you have a reason for clients to choose your business over others is significant. Even if you launch a unique business, you will see me too businesses budding in the market very soon. Constant innovation and impeccable customer care are two tried and tested strategies to counter this challenge.
When I started my business, I wanted to do everything myself; be it planning, strategy, execution, business development, accounting or handling customers. Lesson learnt- neither can you be a master of all nor can you micro manage. You’ll need assistants, accountability partners, motivators and mentors. Embrace them. Resist the urge of or offers to have partners in your business. Partnerships might bring in complexities and limitations that you can avoid by considering joint ventures, co creation, and external funding (limited to a period).
Operationally, it’s always a good idea to maintain a minimum of one week safety stock in case there’s a shortage of raw material in the market, in the event of unexpected strikes or a sudden swell in demand. In the beginning, keep costs low by working with basics, rattling your network and synergizing. NEVER compromise on quality in the name of product/service variety.
Lastly, I want to hover over the most motivating outcome of entrepreneurship for many of us i.e. money/profits. More often than not, it takes time and a lot of effort to get to your picture perfect financial level. Allow your business that time. Don’t give up too soon. Many times you might feel the outcome is not worth the effort. Just keep giving it your best. Overcome your fear of failure. It’s alright to fail as long as you learn and keep going.
Initiatives the Government or Civil Society should undertake
The government of Pakistan can play a key role in creating a fertile ecosystem where entrepreneurs are provided with incentives, are encouraged and protected on a local and international platform. The people of Pakistan are massively talented and hardworking however a basic gap needs to be filled in order to breed a culture of local and international entrepreneurship. Presence of appropriate rule of law will create a natural shift from corruption, crime and exploitation to a culture of constructive progress, accountability and innovation. This would also ensure fair tax collection from the big businesses and SMEs according to set tax brackets by law, leading to lesser wealth inequality.
Instead of distributing laptops to the youth of Pakistan, a practice we saw by the PML-N government, a better idea would be to ensure the availability of funds/loans to deserving entrepreneurs and to provide a conducive regulatory environment to all. The idea is teaching a man how to fish instead of handing him one. Lessons can be learnt from countries like New Zealand where starting a business requires only a few simple steps. After an online application to the New Zealand Companies Office, a certificate of incorporation is issued within minutes in exchange of $127 without a condition of minimum paid-in capital requirement. Such efficiency by the Pakistani government would encourage informal businesses to switch to formal and documented standing. This switch would prove to be mutually beneficial as informal businesses currently do not pay taxes, are not situated in legally registered locations and /or do not hire employees on legal payroll. Yet another lesson can be learnt from countries like Denmark and France who attract foreign entrepreneurs by accelerating visa processes and providing incubation program facilities.
If Pakistan desires to witness an entrepreneurial boom, we need to develop incubation centers where potential/existing entrepreneurs would have access to R&D facilities, multiple mentors, networking events, loans and the like. Entrepreneurs would also benefit if they’re educated to manage business legalities, presentations/sales pitch, finances, social media, traditional marketing and protection of intellectual property. Once these basic steps are covered, such centers can also facilitate alliances with local and foreign partners/companies. If a business is export worthy, linking entrepreneurs to the right people within and outside Pakistan can lead to a higher success rate of the start-up.
An unconventional yet necessary facility also needs to be part of the incubation centers. More often than not, women entrepreneurs in our part of the world end up wasting their hard work, inventory and goodwill when they get married into a non-supportive family, in case of relocation etc. Combating this challenge, incubation centers can assist in selling the business venture by estimating the business worth, preparing necessary contracts and negotiating with interested buyers.
In the past five years more than ever, I’ve seen TV campaigns, NGOs and individuals investing their resources to provide basic education for our nation’s under privileged strata. While educating a nation has utmost importance, most girls manage to survive only a few years of schooling till they run out of funds, are forced to start earning or get married. When time is short and future unpredictable, training girls to master a specific skill (stitching, hair cutting, baking etc.) would benefit them much more than studying till 5th grade or so. One such state of the art NGO in Pakistan that I’ve visited myself is Aman Foundation where the under privileged are trained in a field of their interest and in basic communication skills. Those who graduate are able to earn a better living either through employment or their own start-up leading to an improved standard of living for the entire family.
Media industry of Pakistan can also play a vital role in two areas at least. First, it can create awareness about opportunities for entrepreneurs provided by the government or NGOs. Second, it can promote start-ups that are successfully running the show; motivating the aspiring lot and boosting the morale of existing entrepreneurs. Media industry of Pakistan has the power to steer the image of Pakistan in a positive direction and entrepreneurial success stories would prove to be a fairly good step.
Lastly, an entrepreneurship committee should be set up (by entrepreneurs themselves) on a national level where the talent pool can create alignment based on common ideas and goals. This committee should also find out about the development initiatives needed for the country so that need based projects are launched in the market. One such example is the latest start-up by Pakistani students, “Healthwire” that aims to change the crippling healthcare system of the country. At an advanced stage, a comprehensive database can be developed and managed by this community detailing nationwide data on entrepreneurs, their progress and market gaps. With this achievement under its belt, the committee can give its input for government policies favorable to progress of Pakistan.
The Pakistani government, NGOs, media and citizens working together can revolutionize entrepreneurship in a country that never falls short of talent. With entrepreneurship as one of the priorities on its agenda, the results will surely not disappoint the nation.