Turn to any news station or newspaper and you are bound to find the issue of corruption taking the headlines. Bribes, nepotism and tribalism are the main forms of corruption found in the business sector. Your influence or connections determine how well your business does, regardless of whether or not you offer top-notch services. Corruption ends up crippling honest businessmen with proper qualifications and advancing poor and inadequate services leaving consumers of various products over spending to meet their needs.
Inflation of a currency leads to the reduction of its purchasing power. Trading with an inflated currency both on local and international fronts means increased capital requirements as the same goods now trade at a higher price.
Attracting investors is one of the biggest challenges businesses face. Investors have many requirements to meet the main one being a sensible business plan that benefits them as well as your business. Acquiring of loans, especially in developing countries, is also a major challenge to businesses seeking financial aid. Most banks all over the world have high interest rates that discourage upcoming entrepreneurs and small businesses.
Inadequate supply of infrastructure such as road and communication networks especially in developing countries is a major problematic factor when it comes to doing business. Poor transportation networks, especially in rainy weather, result in delays in the transportation and delivering of raw materials to their destinations. Similarly finished goods do not get to their points of sale on time. Poor transportation mostly affects those specializing in the agricultural sector. Business transactions cannot take place without communication. Poor communication networks therefore affect every industry.
Budding entrepreneurs and small businesses are the worst affected by tax regulations as their profit margins are considerably low. Large corporate companies buffer against the effects of high taxation rates as their after-tax profit margin is more often than not sufficient for the sustenance of the organization.