In today’s world, there exist many businesses and entrepreneurial firms whose main objective in the economic world is to get profit by ensuring proper financial management. The money that is used to start any business is called capital. Each and every person or organization that owns a trucking business is subject to some laws and regulations that govern how they operate in a business environment in which stiff competition exists. The quality of services and products that an organization produces will determine its surviability in such environment.
Factors Affecting Economic Growth of a Country
The economic progress of any nation is measured by considering the following three factors:
1.The number of businesses that exist in such an economic environment
A business is a firm or an enterprise involved in exchange of goods and services with an aim of making profit. Owning a complex trucking business requires heavy capital investment and a high degree of managerial skills. This will enable investors to make good use of available local resources that the firm may need as its input raw material. In every society, there exist both small and large scale businesses. These business enterprises need capital to establish well. The following are the sources of capital for starting any business:
- Contributions by investors on agreed amount
- Borrowing from money lending institutions like banks, cooperative societies, SACCOs, etc
- Selling shares in the stock market
- Ploughing back profits
- Leasing business property
For a business to acquire any loan, it has to meet all the legal requirements specified by the lending company like the business registration certificate that is approved a document that describes the structure of the business and its members, and clear record of loan in CRB. Business organisation is affected by its size, the sector and country, tax advantages, and disclosure and compliance requirements.
2. The existence of entrepreneurial culture in that country
Entrepreneurship refers to the process of identifying viable business opportunities, and implementing them using the available local resources. An entrepreneur is that person who comes with a business idea. He takes all the business risks. Factors that may predict entrepreneurial success are high growth rate of market, high technology impact on industry, and excellent working experience in the start-up industry. Entrepreneurial success is hindered by limited capital, limited management skills, poor market strategy, and high taxation.
This is a factor that is concerned with allocation of assets and liabilities over time under certainty and uncertainty conditions. Finance evolves in three areas which include personal, corporate, and public finance. Capital is the money that gives the business the strength to buy goods to be used to produce other goods and services. Budget is the determinant of capital usage. The cash budget entails opening balances, cash collections, cash disbursements, cash deficiency, and financing. Correct financial management is required in any business to minimize losses.
It is true to note that financial availability, good entrepreneurial culture, and stable business ventures play an important role towards economic growth of a country.