Entrepreneurs may face a variety of challenges in 2023; Some are extraneous and some are intrinsic. As an entrepreneur with experiences from various industries, from trading to manufacturing, I can anticipate some of these challenges in advance. Let’s take a look at it from the perspective of a Bangladeshi businessman.
The biggest challenges, from the start of 2023 through the rest of the year, will come from external factors. These are not always within our control and sometimes there is no solution.
However, it is important to be aware of them so that we can avoid the worst possible consequences, bearing in mind that real challenges will always be there. We’ll look at these factors in light of what 2023 might bring us.
In December 2022, inflation approached 9%, and as the economy began to recover, rising demand for products put undue pressure on prices. To make matters worse, energy costs were skyrocketing.
Inflation is a particular concern if we have large amounts of cash. The value of money is lost because the money is only in the checking account. On the other hand, the goods and materials required for production become more expensive.
To reduce the negative effects of inflation, we can try to keep liquidity as low as possible. For example, we can now stock up on food that we will need later. Or, if you’re looking to invest in improving your business, now may be a better time than later. Therefore, idle money can be invested elsewhere without losing its real value.
Other Export Oriented Industries Most of our domestic industries are highly dependent on imported raw materials. Because of foreign exchange reserves, many companies are unable to hold enough raw materials which will hinder production and layoffs may occur.
The total foreign currency balance held by banks fell to $4.5 billion in October, down from $5.2 billion at the end of June this year, according to Bangladesh Bank data. But to maintain it, domestic industries will have problems maintaining production and fixed costs which layoffs cannot control.
There are also some factors inherited by the industry. For example, a stable cash flow is essential for a company’s survival. And every industry is related in some way to some other industry.
For example, the hardware industry is related to the packaging industry. Therefore, even if the hardware industry is doing well but the packaging industry is not doing well or vice versa, the supply chain or market will be disrupted.
Many entrepreneurs struggle to pay bills, worker wages, and rent instead of earning a steady income. These problems usually arise from late payments. In many cases, the customer wants to pay 30 days after receiving the invoice, and in some cases, 60 days after receiving it.
To reduce this delay, he may need to issue an invoice every 15 days instead of every month. This is a breakdown of waiting time from batch to batch. Another option is to request a deposit at the beginning of the contract.
Finance is an issue faced by both new and established entrepreneurs. If you are still in the early stage, you may be looking for an angel investor or seed funding. If you are an established entrepreneur, you may need to cover additional expenses or supply costs on time.
If inflation continues to rise in 2023, financing will still be more expensive. If you are going to use a line of credit, you can improve its use by implementing a more efficient cash flow, which should save you a lot of interest payments.
In short, an entrepreneur in 2023 will only do great if they can survive the year by maintaining cash flow, no layoffs, and proper money management.
In 2023, we should not look for a high profit margin, but should focus on maintaining business. Being a successful entrepreneur may be one of the hardest careers one can have, but it is also the most fulfilling one.
It is not money that is most satisfying, but it is the satisfaction of overcoming new and ever-emerging obstacles in creative and earnest ways. Therefore, new entrepreneurs should not lose hope in 2023.
The author is the Managing Director of Miyako Appliance Limited in Bangladesh and the first PhD in Business Administration from IBA, University of Dhaka. He is also an Assistant Associate Professor at SBE, Independent University of Bangladesh.