Index for Business



Index for Business


When you are ready to go into business, there are new things you will have to learn to be able to get a better idea about the success rate of your venture.  One of the terminologies you will come across is called business index.  Simply put, business index will give you an idea on the feasibility of doing business in a particular area.  This is directly tied to ten conditions of a particular country where a high business index means that the environment will be conducive for a business operation and the opposite will mean it is more difficult to do business in that location.


Ten Parameters of Business Index


World Bank has created the business index known as Ease of Doing Business Index.  There are at least 10 factors to consider when ranking a country.  These are categorized as closing a business, starting a business, trading across borders, registering property, protecting investors, paying taxes, employing workers, getting credit, dealing with construction permits, and enforcing contracts.  All ten look into a complete life cycle of a business from the time you are in the inception stage up to the time you close the business.  Starting a business means dealing with processes, cost, capital and time needed to get the business rolling.  Dealing with construction permits tracks processes, costs and time to building a warehouse.  This includes obtaining licenses and permits, passing inspections and even hooking up utilities to the warehouse.  Under employing workers, there are several subcategories namely ease of hiring workers, rules on work hours, processes for firing workers and the level of difficulty this process involves.  The more rigid the regulations, the higher the index for the category of employing workers.  The topic on registering properties checks into procedures, cost and time needed for entrepreneurs to purchase a registered property and free of disputes.  Getting credit is another category that explores issues on credit registries and legislations relevant to bankruptcy and collateral to facilitate lending.  Measures in place are the Credit Information index and Legal Rights Index plus public and private credit coverage.


One more important issue for investors is the category on protecting investors which explores protections for minority shareholders against potential mismanagement of company assets by the executive directors for personal advantage.    Paying taxes deals with taxation while trading across borders focuses on import and exporting procedures.  Enforcing contracts looks at sales disputes and closing a business is all about the bankruptcy procedures.