Red tape barriers hold back thousands of people, who aspire to set up their own businesses, preventing them from achieving their goals of becoming financially independent.
A maze of bureaucracy is destroying the ambitions of potential business people by blocking their path to owning a successful trade. The financial aspect of this tops the list of concerns. For an aspiring business person, securing a loan is a steep mountain to climb. Financiers have too many conditions, from collateral to a complicated business plan requirements.
Licencing is another obstacle. The capital requirement is beyond their reach. The condition of what should be in the business premises is another deterrent. The whole process of acquiring a permit is time consuming. It takes up to two months to get one while all the time the applicant is paying overheads, such as the rent of an office or shop. With new rules for visa restrictions imposed on expatriates, a would-be business person faces a formidable challenge to secure workers.
A place where a business should be located is another setback. Residential areas are off limit.
But the rents demanded by the premises in these commercial areas are out of reach for many potential business people.
For a person wanting to start a business, it is easy to start from a low budget and grow gradually to the level of their target. Many businesses that fail could have been started from home to control costs, such as tailoring, food catering, consultations, counselling, event management or handicraft.
Home-based businesses thrive in other countries and the percentage of failure is extremely low. Home-based businesses also encourage women to stay back and look after their young families while at the same time keep themselves self-employed.
The International Labour Organization (ILO) says that self-employed, who carry their businesses at home are the happiest. Their businesses are more likely to last longer than any other small trades because of two factors. They keep the costs lower by avoiding expensive rental repayments and they work in their own environment.
In Oman, such a segment of small businesses does not exist. Those, who have established trade at home, face stiffer penalties because they are not licensed. The government prefers them to take their trade to the streets and risk financial ruin. Those who can venture on this route are faced with formidable challenges. For a start, apart from spiralling costs, they lack guidance during the early stages. Too many are unable to access good business advice.
The financing schemes that are available to them do not cater to skills, such as budgeting, business planning, marketing, competition and risks involved. Just to make finance available without guidance has not worked well so far. The government must start an urgent review to put remedies in place for the failing system. Questions should be asked, such as: are officials who are running the various state-sponsored financial schemes qualified to do the job? Do they have the statistics of business failures and the reasons as to why they fail? Do they monitor those, who have been financed to determine the rate of success?
One of the most effective ways of diversifying the economy is not just to concentrate on foreign investments alone, but to extend the right support to small businesses. If it is done properly, not only will small trades significantly cut down the unemployed, queue but create new job opportunities for people who leave school. It is obviously the lack of concern within the official circle that is letting down aspiring businessmen.
If red tape is a barrier for the creation of small businesses, these restrictions must be kept at the minimum level. Most of the people, who want to start their own businesses, have their own savings and do not need funding as long as they can operate at home. Lifting this restriction will create hundreds of small businesses a year to establish a healthy market for self-employment.