Which City in Pakistan Should I Start a Business in?

You have an idea but can't decide which city in Pakistan you should start your business in?

A lot depends on the type of idea you have. If you have a look at trends and consider what areas the cities are famous for, you might automatically place your idea in a certain city. Look at the following and you will understand:

• Sialkot: Sports goods
• Gujranwala: Textile industry
• Quetta: Dry fruit industry
• Faisalabad: Factories - mainly of garments and fabrics
• Lahore: Boutiques, food and beverage, and real estate development
• Northern Areas: Tourist resorts
• Islamabad: Corporate offices, IT industry
• Karachi: Software industry, FMCG industries, steel mills

One can not however just follow this pattern. There are loads of factors one should consider (additionally you might want to have a look at Porter's five forces model). Some of the factors are listed below:

• Market Size

The first and foremost factor that you have to look at is the market size for your idea. There is no point in starting a business if your actual customer is located thousands of miles away from your area of production. Closer the client is to your production vicinity lower the costs. This concept is of course mainly applicable to the 

production industry and not the service industry. As a side note, for most ideas big cities like Karachi (6th populous city in the world), Lahore and Faisalabad have a big market.

• Competition

Say you are starting a business in one of the categories in the cities listed above. Competition these days is so stiff that it is almost a suicide starting such a business. In fact you might want to have a look at this link if you want to know more about how to select a business ideas. You should therefore consolidate your business idea according to the strength and diversity of competition when choosing a city.

• Employees, Resources and Suppliers

In most of the cities in Pakistan, you will find educated professionals. Similarly all the required infrastructure for most industries can be found in all of the major cities of Pakistan. However depending on your industry you might want to dwell more into this issue and gather all the stats before making your decision.

• Expenses

Whether they are initial expenses or fixed expenses, high expenditure is always dreaded. The case with Pakistan is that all major cities are pretty expensive with Islamabad topping the list. The key therefore is to start your business small concentrating on a certain market segment and gradually expanding it to more cities and industries based on your resources. 

These were some of the factors that need to be considered while selecting your city. The International Bank of Reconstruction and Development along with the World Bank released a study in 2010, which took into account various factors for starting a business and also continuing that business for some cities of Pakistan. Below is a table and contains their ratings. The digits are the ranks of the city for the respective criteria. You might this useful. 

City, Province	Ease of Doing Business (Rank)	Starting a Business	Dealing with Construction Permits	Registering Property	Paying Taxes	Trading Across Borders	Enforcing Contracts
Faisalabad, Punjab	1	2	6	1	3	4	2
Multan, Punjab	2	6	1	7	3	5	4
Lahore, Punjab	3	3	3	4	3	13	8
Islamabad, ICT	4	1	8	3	1	11	10
Sheikhupura, Punjab	5	9	8	5	3	7	6
Gujranwala, Punjab	6	13	2	6	3	10	4
Sukkur, Sindh	7	10	4	10	11	3	1
Peshawar, Khyber Pakhtunkhwa	8	3	6	9	10	8	8
Karachi, Sindh	9	3	10	11	11	1	3
Rawalpindi, Punjab	10	8	5	7	3	12	10
Sialkot, Punkab	11	12	11	1	3	5	10
Quetta, Balochistan	12	6	12	13	2	9	13
Hyderabad, Sindh	13	11	13	11	11	2	7

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