Case
PANACHE: BUSINESS EXPANSION AND FUNDING OPPORTUNITIES
INDUSTRY :-
AREA :ENTREPRENEURSHIP
ORGANIZATION :-
LENGTH :9
LUMS No :23-071-2017-1
PUBLICATION YEAR : 2017
ABSTRACT:
Rukhsana Jamil is a small-scale entrepreneur who runs a beauty salon in a competitive neighbourhood. For the past few years, profits have been shrinking and the business is facing difficulty in retaining professional staff. Ms Jamil believes that expanding her salon to include a spa and fitness centre would considerably improve its financial sustainability. However, she requires external funding to undertake this expansion and diversification project. Although she has been introduced to various funding opportunities which range from commercial bank loans to internet investment campaign schemes, she faces uncertainty in reaching a suitable decision. Although bank loans offer more reliable and independent investment, their higher interest rates are discouraging. Government schemes such as “Prime Minister’s Youth Loan Scheme†have a lower rate of return; however, the requirement of collateral or guarantor poses a problem for Ms Jamil. Microfinance banks and NGOs, on the other hand, provide smaller loans at relatively higher interest rates. Newer sources of business investment such as venture capitalists and crowdfunding offer better investment plans but they are riskier and may entail a dilution of business control. In Pakistan, there are relatively fewer investment opportunities for women working with medium scale enterprises. They often have to utilise personal savings and assets to initiate and operate their businesses; however, soon the savings dry up and the lack of business skills and working capital investments limit business growth. Ms Jamil’s dilemma is reflective of debilitating circumstances faced by women entrepreneurs across Pakistan.