Business Constraints

Typical businesses face the following constraints:

a. Operating Constraints: Business face a number of operating limitations such as:

1. The size of the market: there should clearly be a market for the product being offered. Absence of proper market conditions would lead to low sales.

2. Demand in the market: Thorough market research should be undertaken to anticipate the requirements of the customers.

3. The availability of resources: Supplier availability is very important for setting up operations.

4. Extent of competition: If the competition in the sector is highly stiff, then this could lead to major constraint on business success. Attempt should be made to limit the effect of competition in the market.

5. Investment requirements: Liquidity is very important for business success. Business need to have minimum funds to sustain themselves in dire situations.

6. Skilled labour: It has been acknowledged by businesses around the world that human resource is one of the most important resources of any organisation. Human resources help the organisations to gain competitive advantage as it is not easy to duplicate the capability of skilled labor.

b. Legal Constraints

Legal and regulatory constraints have significant impact on business success. Different governments have different regulations for setting up business operations in their respective countries. Business should not overlook the importance of such constraints. Various legal constraints that business faces are confidentiality and privacy of information, regulations and contracts that must apply when consumers and providers are located in different countries.

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