What are the most common challenges faced by Entrepreneurs?
Introduction: What Does It Mean To Be An Entrepreneur?
An entrepreneur is someone who starts an enterprise or invests in a new business. Becoming an entrepreneur can be challenging, but it offers many rewards to those who have perseverance and can face the challenges of entrepreneurship. What are the challenges faced by female entrepreneurs any different from males? The challenges female entrepreneurs face can be more than men in different cultures around the world. Startup challenges are immense but the founders have to find a way out of the problems and gain success. For many, the idea of entrepreneurship may seem out of the picture. However, there are many who have started a business and have been able to gain success at it.
It seems to be a common misconception that people who have been unsuccessful have no right to talk about entrepreneurship because they haven’t managed to make it big. But on the contrary, their opinion can be helpful in pointing out the red flags, things that you should avoid, and the problems facing entrepreneurs.
However, there are many people who have managed to start a business and have been able to gain success. From these people, we can learn about what mistakes they made, what an average entrepreneur's challenges are, and what led them towards success.
People often think that entrepreneurs are born with all of the skills that are required to create a new venture but that’s not always the case. The skills are acquired through the problems faced by entrepreneurs when starting a business.
Becoming an entrepreneur doesn’t always require a huge amount of money or knowledge about how to manage finances or marketing strategies. In fact, entrepreneurs often turn out to be quite resilient because they have had so much practice overcoming obstacles and challenges faced by entrepreneurs as they work on their new ventures.
Entrepreneurship can be a difficult career choice, especially considering the challenges female entrepreneurs face and the challenges of social entrepreneurs. But, they often turn out to be quite resilient because they have had so much practice overcoming obstacles and challenges as they work on their new venture.
Top 10 Challenges of being an entrepreneur.
1. Startup Costs
Startup costs are a major challenge faced by Entrepreneurs. The initial investment can be obtained through multiple sources such as VCs, loans, friends & family, but it's most important to know how much money you exactly need and for what purpose? This is a major problem faced by entrepreneurs as they go out to ask for funds from the bank or the public. Before asking for a fund, sit back and calculate the exact amount of funds required and allocate them according to priority.
The allocation of funds depends on the type of business you are willing to start. Is it a marketing and sales intensive business or is the focus majorly on delivering quality services? The core operations of your business need to be given first priority. Post that, comes an important aspect, ie. Sales and Marketing. For any business, sales or marketing is often the second most important aspect. As an entrepreneur, you need to provide a sufficient amount of funds to advertise your product or service.
It’s advisable to start your business without a significant debt burden or VC funding and test the market with your own funds. This also allows you the freedom to try out new ideas and a space for trial and error. Once you are fully operational, go for loans or a funding round to scale up the enterprise.
2. Limited Time
Time is one of the major challenges entrepreneurs face when starting a business. You have a limited time in order to try, test the market and show success. If the market supports your idea, a startup can become an instant success and start churning out the returns within no time. Usually, it takes anywhere between 1 to 3 years for a business to blossom into a success.
But can you work on the idea for such a long time and survive without any capital? After all, everyone has bills to pay and family to take care of. How much time will you have to wait to earn a profit from your company? According to experts, it can take up to a thousand days for a company to start working at its full potential. This is one of the major challenges faced by entrepreneurs. How can someone work for almost three years without wages and profit? How will he survive?
The answer is simple. You need to have a backup, a steady income from your partner’s salary, rental income, or some extra cash that can support you during this growth time. It's not always true that a business earns zero profit post three years from its induction, but it's important to be ready for all possibilities and prepare yourself for them.
3. Lack Of Technical Expertise
One of the major problems facing entrepreneurs is a lack of technical expertise in the niche you are operating in. If you do not have the technical expertise and depend completely on your managers or employees for support, It can pose a major challenge for entrepreneurs. This can be an acceptable scenario in a multinational but not in a startup. What if the employee or partner having the technical skill leaves you mid-way? That can be disastrous for your business.
If you lack the technical expertise, spend time learning and researching about the industry. Know the basic technicalities and jargon. “Jargons” are the terms typically used in the industry and learning one jargon a day can help you understand a lot about the space you operate in.
4. Lack Of Funding
Lack of funding is one of the major problems of entrepreneurship. But how can you get over it and what sources of funding can you explore? There are multiple sources of funding for startups that include- Loans, VCs, and borrowing money from friends and family.
Most often this challenge comes up in the initial stages of entrepreneurship when you are just burning money and resources to set up the infrastructure, hire employees and market your business.
Do not indulge yourself excessively in the various entrepreneurs' challenges and focus on growing your business to the next level and start making profits. If the business idea is good, profits will begin to pitch in providing a cushion for future operations.
5. Growing Pains
It's important to identify the pain areas in the startup and resolve them before they start to increase the problems of an entrepreneur. Identify and consult with the experts or your mentors for possible solutions.
Having experts as mentors helps you in mitigating a lot of pain areas and identifying any symptoms at an early stage. Mentors are experienced, have already undergone different challenges faced by entrepreneurs, and have made the mistakes that entrepreneurs are likely to repeat.
6. Lack of Resources
One of the major challenges faced by entrepreneurs is the lack of resources. It can be monetary, infrastructure, or more. You should be ready to face these challenges and find viable solutions to these issues. Most of the problems of entrepreneurs are because of the capital, as “n” no resources can be purchased if you have the right amount of capital with you.
Another important resource is Human Resources, which is of utmost importance to operate an organization successfully. Henry Ford once said,” You can take away all of my infrastructure, money, and assets, but just give me my manpower and I'll build all of that once again”. Manpower is one asset that can accelerate or decelerate the growth of the entire organization. Creating systems is important but having the skill set to handle those systems is more important to run a successful business.
7. Lack Of Experience
Lack of experience is one of the more important challenges faced by entrepreneurs. If you are a first-time entrepreneur, you are not likely to be experienced in the business. What you have are the skills that you have acquired in your previous employment. But does that have any value in your entrepreneurial venture?
Having a skillset in an established or a semi-established firm can not compensate for the entrepreneurial experience. It's a different ball game altogether. As a first-time entrepreneur, you have to handle HR, Finances, Sales, Marketing, along with salary disbursals all at once. You are a multitasker and must keep an eye on the broader vision of the business along with handling the nitty-gritty of it. How can you compensate for the lack of experience as a first-time entrepreneur?
The answer is you can’t. The only way is to have an experienced partner, read a lot of books and information, and have a mentor who can teach you the required entrepreneurial skills to lead from the front.
8. Lack Of Motivation
“Lack of Motivation” is one of the main challenges faced by entrepreneurs. But how do you get demotivated? Demotivation comes and settles in with time. You do not expect to make a huge sum of money as soon as you start your business. It takes time to settle and become an established enterprise. This time, without money and taking in all the hard work, leads to demotivation among the partners and can even seep into the employees.
How to overcome the lack of motivation as an entrepreneur? It can only be settled via passion and strong willpower, the ability to look beyond what meets the eye. As an entrepreneur, you have to think long-term.
The human mind by default is designed to look at the short-term results and consequences that are necessary for survival. But a true entrepreneurial mind looks at the long-term projection and holds strong to last through the difficult time.
9. Lack Of Direction
Planning and having the right direction is important for your business to be successful. Many entrepreneurs get too caught up in the business that the final goal is forgotten. First, it's important to have a goal in your mind along with a route map. There need to be short-term goals that ultimately lead to the accomplishment of long-term visions.
10. Lack of a Goal and Vision
Are you working day and night in your business? But What exactly do you wish to achieve? It is important and imperative as an entrepreneur that you set your goals right. Not having a goal is like running a marathon without a finish line.
Entrepreneurship can be a challenging and stressful journey for many people. However, finalizing your goals and working towards them will help you to stay motivated and continue on your journey to success. If you do not have fixed goals, it is difficult to understand the intermediary steps in the journey and the efforts that will lead you to it.
How To Overcome The Challenges Faced by Entrepreneurs?
"To be successful as an entrepreneur, you need to have a level of confidence. You have to believe that you are worthy of being successful."
Confidence is one of the most important qualities needed for entrepreneurs. They always have to be confident in themselves and their ideas.
Another important factor that helps overcome entrepreneur challenges is Self-care. It is really important for entrepreneurs because if they don't take care of themselves, and work towards improving their skills, it's difficult to succeed. "It is important to take care of yourself because you are what fuels your business."
The problems faced by entrepreneurs are not something that can be solved overnight. There are many attributes that an entrepreneur should pay attention to, but the most important are passion, team-building, and focus.
Passion for the business plays an important role in overcoming the multitude of challenges faced by entrepreneurs. If you're not passionate about your business, you won’t be successful. It's a marathon and to sustain throughout your journey of 5-10 years, having a passion for the work is most important. It will help you be motivated and overcome all hurdles with a smile on your face.
Identifying a passion is the first step towards entrepreneurship. But how do I know I am Passionate about something? It's quite simple really! Think about the business you're currently involved in, and then imagine yourself doing it for the rest of your life. Do you feel nostalgic or happy? That, “Right Away” gives the answer to your question. There is also a more tested way that the Japanese use to find their “Passion” or “ikigai”.
It’s a union of 4 elements ie. passion, vocation, professionalism, and mission. An ideal combination of “what you love”, “What you can be paid for”, “What you can be good at, and “What the world needs”. It tells us to choose a profession that is an ideal intersection of all these elements. If entrepreneurship is your “ikigai” passion is one of the most important elements of it.
2. Team Building
Having an ideal team can overcome most if not all of the problems of an entrepreneur. Managing and building a team is the most challenging and yet the most fulfilling part of your journey.
Do not be in a hurry to hire professionals at face value, rather try and test them with intricate interviewing skills and the best of your judgment. Smart and efficient employees can provide you with a lot in profits whereas a bad employee can cause a dent in your profits and demotivate the team. After all, a company is the sum total of the human capital it employs.
There are certain things that you must bear in mind when choosing the employees for your ideal team.
Have a probation period for the new employee. It's one thing to trust your judgment but, when you are hiring an employee, only his performance with time will ensure where he stands in terms of the skillset, hard work, and dedication towards his work.
Don’t trust the experienced personnel, at face value. Non-performance is a major reason for the attrition of employees from one organization to the other. Try to check for references and make sure you are hiring someone who is at the top of his profession. Even freshers with the right skill set and training can outsmart any experienced employee.
Provide your Team with regular training and development programs. This helps to improve their skills and communication.
Focus can be defined as the center of attention or a point of direct concentration. As an entrepreneur, it's important to keep your head steady and not be distracted by the challenges and hurdles. But how to be focused between the numerous distractions and challenges?
The idea is simple. Have a meeting at the end of the day or week with your partners and discuss the direction and goals that you have achieved.
Are you going in the right direction? Are you achieving your goals? If not, what more can you do to achieve them, the changes you can make to your systems and workplace practices. This activity shall allow you to achieve focus and determination as a successful entrepreneur. To be fixed on the target like an archer, unwavered by any hindrance.
Entrepreneurs are the backbone of a nation. They take risks and challenges that no one else will and bring innovation and creativity into the system that helps improve lives.
Today there are multiple challenges faced by entrepreneurs from lack of access to cheap capital on one hand and on the other hand, they are fighting macroeconomic challenges. The dual threat has made it difficult for businesses to survive. But the risk to reward for a startup is worth every pain and hurdle you face during your entrepreneurial journey. The challenges of social entrepreneurship are no different from other entrepreneurs, all you need is focus and determination to succeed. If you follow a dedicated path with passion, the right strategy, and focus; no power in the world can stop you from being a success.