Challenges faced by New Entrepreneurs
10 Most Important Challenges faced by New Entrepreneurs
An entrepreneur is one who plays significant role in the economic development of a country. Basically an entrepreneur can be regarded as a person who has the initiative, skill and motivation to set up a business or an enterprise of his own and who always looks for high achievement. Entrepreneurs have to face numerous challenges on the road to success, in particular with regard to access to finance. All entrepreneurs will at some point feel overwhelmed with the many responsibilities that fall on their shoulders. The common challenges faced by entrepreneurs are Overestimating Success, Misplaced Purpose,. Negative Mindset, Poor Organization, Jack of All Trades, Employee Motivation, Lack of Support.
Entrepreneurship means having access to capital, understanding business finance and building successful relationship with lenders. When starting a venture, however, an unprepared entrepreneur may encounter cash flow problems when he doesn’t have a network of dependable lenders or investors. Any successful entrepreneur needs a list of people in and out of the business world to depend on. An entrepreneur must understand business finance, or risk overpricing offered services. Overpricing your product causes insufficient sales and cash.
2. Business Management
About one-quarter of entrepreneurs cited management problems as another challenge with entrepreneurship, explains Researching Small Business and Entrepreneurship. A successful entrepreneur needs passion to get a business started and make it stable. Thus, personal problems, such as not setting goals, measuring performance and controlling your time can prohibit your from managing your business properly. In addition, an entrepreneur must have access to useful business information. Starting a business venture involves learning as much about your business and product as you can before securing capital. Managing a business also mean finding and retaining qualified employees.
3. Marketing the Business
Whether an entrepreneur plans to sell products like computers or services like repairing computers, she needs to market the business. Entrepreneurship problems can arise when an effective marketing plan doesn’t exist or you don’t have the ability to actually sell the products or services. Another problem involves using effective advertising. In a society where placing flyers on street poles may not gain a customer’s attention, you need an effective and thorough marketing plan to inform people about your business.
4. Finding the Right Business
Location finding a good business location at the right place is definitely not easy. An efficient location that has a rapidly growing population, good road network and other amenities at a good place
5. Unforeseen Business Challenges and Expenses
Just as a sailor prepares for unexpected storm, just as a pilot is always on the watch for unpredictable bad weather and thunderstorms, so must an entrepreneur prepared for whatever comes in the form of:
- Unexpected lawsuits
- Inconsistent government policy
- Not being able to make payroll
- Unpaid bills and taxes
- Unexpected resignation of staff from sensitive office
- Bad debts from customers
- Loss of market share
- Dwindling working capital
- Inadequate stock or inventory.
6. Finding Good Customers
The sixth challenge an entrepreneur will face in the process of starting a small business from scratch is finding good customers. In the process of building a business, an entrepreneur will come to find out that there are good customers as well as bad customers.. Good customers are really hard to find. A good customer will be loyal to the company and will be willing to forgive if the business make a mistake and apologize. A good customer will try to do the right thing that will benefit both him and company mutually.
7. Keeping Up With Industrial Changes and Trends
Change in trends is a challenge an entrepreneur must be prepared for when starting a small business. Trends have made and broken lot of businesses. Profitable businesses that have been wiped out by slight industrial changes and trends. A typical example is the Dot com trend, where many established industrial based businesses were wiped out by new web based dot com companies. Seasoned entrepreneurs know that trend is a friend and are always willing to swiftly adjust their business to the current trend.
One of the biggest mistakes entrepreneurs make in their early days is trying to be all things to all people. They attempt to sell their product or service to too wide of a market. Entrepreneurs also face another challenge in this area. They focus on the wrong things. They spend too much time building their product without validating that the marketplace wants needs and will actually pay for it.
9. Finding Good Employees
Most writers and managers crank up the process of finding good employees as an easy task. They define the process of finding an employee as simply presenting the job description and the right employee will surface. Business owners know how difficult it is to find a hardworking, trustworthy employee. Most employees want to work less and get paid more. Finding a good employee who will be passionate about delivering his or her services is quite difficult. Finding good employees is a minor task compared to the business challenge of forging the hired employees into a team.
10.Assembling a Business Team
The third business challenge that an entrepreneur will face in the course of starting a small business from scratch is assembling the right business management team. The process of building a business team starts even before the issue of raising initial start-up capital arises. Most brilliant ideas and products never get funded because the entrepreneur is trying to raise capital as an individual. A business team is a vital, yet often ignored key to raising venture capital successfully.