8 reasons for the exit of private sector establishments from the market

The Assistant Secretary-General for Economic Affairs in the Federation of Saudi Chambers, Abdulmalik Al-Sulaiman, revealed the results of a specialized study conducted by the Federation of Chambers, to monitor the reality of the private sector, on 8 main reasons and indicators behind the closures and failures of establishments in the private sector, the most prominent of which are the problems of financing sustainability and the lack of financial and administrative experience among pioneers. business, as well as some financial burdens of fees.


Al-Sulaiman, who was speaking yesterday “remotely”, in a workshop entitled: “The Reality of Private Sector Establishments”, organized by the Al-Ahsa Chamber, indicated that there is a tendency to build large entities in e-commerce, to compete regionally, and to ensure the development of internal e-commerce, and give it Motivational possibilities for expanding electronically, and there are great preferences for e-commerce when compared to commerce on the ground, a “shop” for the same goods.

Damage from infrastructure works

During the workshop, Al-Suleiman listened to investors and entrepreneurs in Al-Ahsa about the causes of stumbling blocks and closures in Al-Ahsa, which were inflated costs, exaggerated inspection procedures and financial fines. This causes confusion within the facility and tension among the facility’s employees.

The economic feasibility studies offices of projects focus on the financial financing of the project only, ignoring other considerations such as risks, negatives, difficulties, challenges and opportunities for improvement, which causes entrepreneurs to encounter future financial stumbling blocks.

In addition to the damage to the facility from the infrastructure works close to it, such as excavations, electricity, roads, bridges, closing paths, and other long-term implementation.

Reasons for failure of enterprises in the private sector

– The beginning of the idea is wrong.

Lack of knowledge and financial and administrative experience of the entrepreneur.

Funding sustainability problems.

– Pressures through the imposition of fines.

– Some financial burdens from fees.

– Harassment of loose labor, commercial concealment, and its acquisition of a share of the market.

– In the industrial sectors, not predicting changes and amendments to regulations and legislation.

The investor’s journey is not clear, and entrepreneurs need more education before entering the labor market.

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