Government interventions in business

Tuesday, April 16, 2024
Engineer Valiullah Afkhamirad, CEO of the Kerman Civil Engineering Organization, examined government interventions in economic enterprises in an article published in the Dunyai Ekhtaz newspaper. This reading follows:
Production and service activities become official when they are registered in the form of a legal entity under the title of enterprise, society or institution, etc., and become objectified as a living entity. The factor and means of creating an enterprise is the determination and willingness of its creator(s) to organize activity in various fields, including education, research, trade, finance, production and others , which is ready to launch in addition to providing the appropriate services. liquidity with the set objectives.
Depending on the type of business and scale that the founder has predicted for them and the business environment that exists in the country, companies must allocate a period of time to supposedly lead or prepare to start their business . The larger the size of the enterprise and the closer the type of activity is to the type of non-assembly and non-assembly production of goods, the longer it will take to enter the market and, in the meantime, what can be encouraged and ease can lead to the desired result. Or, to put it as a deterrent, it is the business environment and associated regulations.
Stability of rules and regulations, quality and stability of macroeconomic policies and non-interference of executive bodies in economic affairs are among the most important factors that can be very effective in accelerating business creation and countering interventions inappropriate government under misleading conditions. titles such as market regulation and pricing and consumer protection are always one of the reasons for the delay or failure of the establishment of manufacturing and service enterprises. Note that sanctions, particularly banking sanctions, constitute one of the major obstacles to the creation and development of businesses and the exit of their activities due to the emergence of numerous problems in this area.
In any case, if the entrepreneur and the founder of an economic activity, by overcoming all these obstacles, can put his business into the orbit of activity and engage in the production of goods or services, it is always confronted with threats which can reduce the volume of its activities. activity and even the cessation of production of goods and services are faced. This problem is not only related to Iran, but newly established companies in other countries also face it, which may have different results depending on their business environment. What is certain is that newly established companies in our country face many more threats than in other countries and their mortality rate is also much higher than them. The lack of financial resources and the non-cooperation of banks are among the issues raised by their founders when companies stagnate or reduce their activity.
The lack of financial resources also appears from where and when the company is dedicated to the production of goods or services for which there are neither customers nor demand; Because the customer's taste or desire is not well known and taken into account while designing the product or service, and the company engages in an activity and provides a product or service for which it does not there is no demand or whose final price is incompatible with that of the customer. Or he is caught in the prices imposed by law enforcement agencies and must offer his goods or services below price or at a minimum profit that does not cover the return on investment. It is natural that in such a situation, a company born with a thousand efforts and expenses is closed and the losses are left in the hands of the founders and the providers of initial capital, whether it is the applicant or the bank and the 'Financial institution. providing the installation.
When companies suffer from this path, and as long as they fail to adjust the price and final quality of their product according to the customer's taste, or until they manage to convince the executive bodies that set the price of the products, no action is taken. can help them get back on track. Financial assistance and financing of these companies, as long as no action is taken to resolve the root cause of their bankruptcy, will only put them further into debt and accelerate their bankruptcy.
What is presented under the title of launching a significant number of semi-closed and closed enterprises as a report on the activities of certain state executive bodies is the type of financing of the working capital of these units, which ultimately leads to making the indebted more profitable and closing them down again. What can prevent the death of newly established companies is correct economic policy and activity in production and international trade chains, which are unfortunately far from feasible at present, as well as the measures taken by some executive bodies to revive closed businesses, except for the creation of cost and profit will not follow.

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