Although formalization offers a number of advantages, male and female entrepreneurs can be faced with some challenges asthey embark on this process. Here are 8 common challenges that entrepreneurs could encounter as they move through theformalization process. What does each of these challenges entail? X Insufficient information on the advantages of formalizing your businessA lack...
Although formalization offers a number of advantages, male and female entrepreneurs can be faced with some challenges as
they embark on this process. Here are 8 common challenges that entrepreneurs could encounter as they move through the
What does each of these challenges entail?
X Insufficient information on the advantages of formalizing your business
A lack of information about why formalization is beneficial to your business – and your workers – makes your first steps
challenging. With this guide, you build your knowledge and understand why it is useful to formalize your business.
X Complex-looking registration and compliance procedures
Initially, the procedures involved in formalizing your business may seem complicated and slow. The steps can be complex,
especially if you are not used to dealing with administrative procedures. In reality, things are not as complicated as you
might think. The government and the administrations concerned are increasingly simplifying these procedures in order
to make the formalization process easier.
X Insufficient information on what to do and how to do it
One of the main obstacles preventing many business owners from making the decision to formalize is the lack of
comprehensive and reliable information about formalization procedures and about how to comply with various rules.
This lack of information may be particularly problematic for women entrepreneurs, considering their more limited access
to entrepreneurial networks and market information. The rest of this module will provide you with the information you
need to make your task easier.
X Incomplete or missing documents
To initiate the process, you often need to have documents such as a proof of identity, a personal or tax identification
number, or other official documents required to register your business. Without the necessary documents, starting or
continuing the registration process can be difficult and discouraging. Since these are usually documents that you must
have as a citizen, why not take the time to get them? They may prove useful on other occasions.
X Costs look high and daunting
The process of formalizing your business involves expenses such as registration fees, tax obligations and social security
contributions. If you only look at these expenses and do not think about the benefits to you, your employees and your
family, you may not be enthusiastic.
X Insufficient income to meet the costs involved in the formalization process
One of the main challenges associated with formalization is failure to generate sufficient revenue through your business
or to access assets that can drive your business forward. Formalizing your business is not only about completing the
initial registration formalities. It also requires that you implement a business model that generates sufficient income.
This income should provide you and your workers with a decent salary and help you cover the costs of taxes and social
X Limited geographic access to registration institutions
Another challenge you may face in the process is the fact that registration institutions may be located very far from your
residence as you may be living in rural or suburban area. But know that the distance you have to cover is never too long
when what you are going to do is important to you. You just have to find a way.
X Difficulty in navigating formalization-related challenges specific to certain groups
Some requirements may be difficult to meet in light of your personal situation. Understanding when this is the case will
give you important information on how to address these challenges (see below)