Entrepreneurship offers rich rewards that come from financial profits, success with professional goals and more. However, it also comes with incredible challenges that must be overcome on the road to success. While all entrepreneurs face challenges to varying degrees, newer or younger entrepreneurs are particularly vulnerable to some obstacles.
The unfortunate reality is that entrepreneurship often ends in failure, and newer and younger entrepreneurs may be particularly vulnerable to the possibility of failure. Understanding the challenges that lie ahead can help you to better prepare for them before they become significant issues.
1. Lack of Funding
Proper funding is essential for all startups. Some individuals will pump their own funds into their new company, but younger entrepreneurs may not have the deep pockets that their older counterparts may have. Entrepreneurs of all ages generally will also need to raise capital in different ways regardless of how much personal capital they invest in a new project.
Raising capital from loans generally requires a solid credit rating, which some younger adults do not have. Capital can also come from investors, but investors may be less likely to contribute funds to a project managed by an inexperienced individual. These challenges may be magnified by the fact that younger entrepreneurs may still be strapped with student loan payments and other debts that are associated with starting out in life.
To overcome these challenges, you need to have a solid financial strategy. For example, you need to network extensively so that you can develop connections with the right people who may be willing to take a chance on you. It is helpful to improve your personal financial situation as much as possible and to scale back on your personal lifestyle to do so. In addition, take every step possible to establish a good credit rating before you get started.
2. Managing Your Employees
Many young entrepreneurs have little or no management experience, and this means that you must learn the ropes as you go. The stresses of learning along the way in this area can add to the overall challenges and pressures that you feel. Remember that the team you select, and how well you nurture and motivate them will directly impact the success of your company.
The first step to improve in this area is to learn how to actively recruit top talent. You may even connect with a staffing firm for assistance. The next step is to study managerial books so that you determine how to be an inspiring boss who also strictly enforces rules in a fair and equitable manner. Understand the importance of having a rulebook or employee handbook to guide your actions and to establish expectations. When your budget allows, consider hiring human resource professionals or office managers to assist in this area.
3. Lack of Experience
Most business professionals have made at least a few mistakes over the years, and mistakes provide you with valuable learning experiences. Younger entrepreneurs do not have the wisdom that comes from dealing with hard knocks in life. Rather than approaching business operations with the mentality that they have the full set of skills and background experience necessary to be a success, younger entrepreneurs should acknowledge their lack of experience and actively seek advice and guidance from older mentors.
Remember that you may also face stereotypes based on your young age. Older employees, investors and others may view you as being irresponsible, impulsive or generally ignorant in some areas. You will need to be patient as you work hard to prove yourself to these people.
4. Impatience
Because of a young entrepreneur’s lack of experience, unrealistic expectations regarding the rate of growth and profits may be in place. Even companies with a great business plan and an amazing product or service will need a few years to realistically gain enough presence to produce a good profit on a regular basis. This is assuming that you have the right pricing, a great team of employees and a good business plan.
Negative thoughts can cloud your judgment if your expectations are not realistic. You must have a financial plan that keeps you on the path to growth and profits throughout this lengthy period of time. You also must be dedicated to putting in the effort even when results are slow to develop.
5. Dealing with Stress and Criticism
Entrepreneurs will face criticism at every turn. Younger professionals may not have the strong backbone required to handle it or even to learn from it. Instead, they may commonly feel discouraged by the comments of others. Understand that you will be under the microscope. Your thoughts and ideas will be challenged by many people, including those who are near and dear to you.
Avoid feeling discouraged by criticism. Self-doubt works against you and it can ultimately be your downfall. Consider networking with other entrepreneurs your age. You can learn from their experiences, and you can also enjoy the support that they can provide you as you work towards building a successful company.
You will always face obstacles in life. These can feel like setbacks, but they are actually learning experiences. With each setback or challenge, focus on the new things that you have learned instead of the pain and stress that you have endured. Stay positive regardless of the severity of challenges so that you can be a better leader for your company.
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BIO: Eric Gordon is an independent business development and marketing specialist for SMEs. He loves sharing his insights and experience to assist business owners in growing their revenues. You can find Eric on Twitter @ericdavidgordon
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