Entrepreneurship in Pakistan

Some facts
• Rich in natural and human resources
• Reserves of limestone, marble, rock salt, coal
etc.
• 6th largest population in the world
Source: Population
Research Bureau
 Ease of Doing Business
• Pakistan has slipped three places on the Word
Bank’s Ease of Doing Business Index and is now
ranked a lowly 147th among 190 economies
(World Bank data, 2017) 
• and in Pakistan, it takes on average 46
procedures and 976 days litigation process for
enforcement of contracts.
• Low rank due to
– Numerous procedures
– Time spent
– High cost of conducting business
 What is SME in Pakistan?
SMEDA Small Enterprise Medium
Definition Enterprise

No. of Employees 10-35 36-99

Productive Assets 2-20 Million PKR 20-40 Million PKR

 SME in Pakistan
• 90% enterprises in Pakistan are SMEs.
• Wide range of business activities.
• Agriculture focus mainly in rural areas.
• Manufacturing, retail & wholesale, services
focus in urban areas.
SME Major Sectors
 SME characteristics in Pakistan
• Mostly sole proprietorships or partnerships
• Family business run by relatives
• Subjective and personal factors play a large
role in decision making
• Usually no distinction between private and
business assets
 Constraints faced by SMEs
• Poor access to institutional finance
• Poor access to technology
• Shortage of skilled labour
– Migration to Gulf countries
– Job switching due to higher wages availability
• Poor management
– Lack of education
– Lack of bookkeeping, stock management etc
 Constraints faced by SMEs
• Marketing
– Low quality raw materials
• Copyright issues
• Harassment by tax authorities
• Inflation
 SMEDA
• SMEDA was established in October 1998 to
take on the challenge of developing Small &
Medium Enterprises (SMEs) in Pakistan.
• Conducts training seminars
• Provides a database of consultants and
advisors regarding starting and running an
enterprise.
• Smeda.org
Transforming A Vision Into Reality

THE TAPAL STORY

 Tapal Tea is born
• Established in 1947 by Adamali Tapal
• Started business due to market opportunity
and potential growth rather than prior
experience
• A small shop next to Jodia Bazar, Karachi
• Success to low overhead costs and personal
customer service
 2 Generation steps in
nd

• Faizullah Tapal takes control after Father loses

interest in business
• Business has grown and management control
remains with few employees
• Both Father and Son reluctant to manage
business
 Aftab Tapal Joins the Family
Business
• Trained in Sri Lanka
• Looked after warehousing, blending,
packaging, shop sales and customer service.
• Passionate about the tea business after
working in it.
 Business Strategy
• Avoiding direct competition with foreign
brands
• Focus on ignored or overlooked niche
• Introduction of colour coded packaging
• Appointed distributors rather than vertically
integrating as was industry norm
• Larger premises built in Korangi, financed by
sale of assets one at a time to avoid cash flow
problems
• Introduction of mechanization
• Acquisition of building in Jodia Bazar to
maintain contacts
• Reorganization of job functions such as
finance, marketing etc
• Introduction of Danedar, which has a milder
taste but strong in flavour
 Achievements
• Pioneered in mechanized soft packaging for
tea in Pakistan
• 1st to introduce Kenyan tea; exporting tea to 5
continents, metal free tea bags; tea plantation
in Shinkiari, Northern Areas
• Established “Hum Qadam”, an entrepreneurial
resource centre for the disadvantaged.