Problems faced by Entrepreneurs – Internal and External Problems

Specific Management Problems

Besides internal and external problems of entrepreneurs,some specific problems faced by the entrepreneurs are discussed:

a)Management deficiency

It is well known factor that management deficiency is one of the main reasons for poor performance and sickness of small enterprises.The new entrants in the field of small industries in general do not have any prior training or background in the management of their units. With growing sophistication and modernization of market requirements for their products,it is very important for entrepreneurs to employ modern methods of management.Entrepreneurship is not only inborn gift; it can be cultivated through application and training.

b)Finance

Financial inadequacy is alsoreported to be one of he most important causes leading to sickness of small scale units. Critical issues in financial management require to be constantly borne in mind to ensure that a small scale business enterprise remains healthy.Planning for profits must be ensured at all times by resorting to periodical performance evaluation and while reporting such performance actual or planned the merits of being conservative should not be lost sight of.Poor utilization of various assets is critical to profit maximization.Along with credibility,solvency and liquidity are essential for enterprise growth.

c)Manufacturing and technical problems

Most units face production problems due to lack of raw material availability,skilled labour shortage,under utilization of capacity and time and cost overrun.Manufacturing and technical problems arise right at the stages of project planning and feasibility report preparation.Problem areas are product pricing,selection of right equipment,plant and machinery,selection of personnel and training them,technical know how,technology transfer,industrial engineering,production engineering use of standard quality control and use of high tech equipment.

e)Product planning

The election of product depends on technical know-how,infrastructure facilities and managerial abilities of entrepreneurs to complete a project successfully.

Selection of equipment,plant and machinery.No detailed scrutiny is done before selecting equipment,plant and machinery.However,this needs to be done and while doing so, entrepreneurs should give importance to production capacity,process capability,accuracy requirements and other supporting facilities.They are required to look for alternative and appropriate high tech equipment if they are technology-economically feasible.

f)Human Resource Development

Selecting the right person for the right job would contribute for smooth and efficient working of the enterprise.After selecting the right personnel on scientific lines,it is very essential to train them at appropriate organizations so that they have both theoretical and on the job training in improving the productivity of the enterprise.Entrepreneurs should know that it is not the machine alone that work but the people behind the machines who make it work.

g)Technical know how

Most small scale units are neither technical equipped nor do the possess technical know-how. While there are numerous ways of doing a job, there is only one way of doing it in a manner that is more effective,efficient and highly productive. Many entrepreneurs do not realize that their trial and error method wastes time,money,energy and other resources.

 

Problems faced by Entrepreneurs – Internal and External Problems

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