In today’s world, each one us dreams of being an entrepreneur and starting up something that we are passionate about. It’s all about making a difference in the world of business and solving the pain areas of the target audience through our offerings of products and services.
Entrepreneurship requires a thorough thought process, radical thinking, market know-how, and a strategic plan that is clear and crisp. Also, the vision and mission need to be divided as per the short term and long term goals and objectives.
However, easy and simple it may sound on a piece of paper or the powerpoint presentation slides, there are various Barriers to Entrepreneurship that each of the entrepreneurs taking the risk has to face and get through.
Table of Contents
Top 12 Barriers to Entrepreneurship
#1 Finances
We are all bustling with ideas that are unique and can make for an amazing business start-up. But no matter how good your idea is, you will always need stable finances and funding from the investors to begin the process and take the first step towards your journey of entrepreneurship.
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Building a strong support network can significantly help aspiring entrepreneurs navigate challenges such as limited finances and lack of market experience. According to a report by the Kauffman Foundation, entrepreneurs with mentors are more likely to launch and sustain successful businesses. (Source: Kauffman Foundation, “Entrepreneurship and Mentoring,” 2021)
Additionally, utilizing online educational resources can address gaps in practical knowledge and training. Platforms like Coursera and edX offer courses on entrepreneurship, enabling individuals to gain valuable skills without substantial financial investment. (Source: Forbes, “Top Online Learning Platforms for Entrepreneurs,” 2022)
And getting a sound financial investment or funding can be one of the biggest Barriers to Entrepreneurship as many of banks, private investors, angel investors, and organizations find it quite difficult to believe in the start-up ideas owing to the risk of failure and losing their money.
#2 Fear of not to be a success
We all go through the fear of failure. And if the fear is associated with the risks and stakes taken in the stream of business and entrepreneurship, the level of fear elevates.
There is a fear if we are on the right track, is the idea worthwhile, will there be profit, will I find investors, and various such fears and tensions act as the Barriers to Entrepreneurship.
#3 No strategic plan in place
Lack of proper planning and strategy in place is one of the most common Barriers to Entrepreneurship. Many of us think to build a business out of a hobby without having any sort of long term and short term vision and plan in mind.
Running a fully-fledged business or being an entrepreneur requires a huge amount of skill set, passion for excelling, strategic vision, the mission to accomplish the goals, market research, and a lot more.
Right from the target market, finances, human resources, to a proper strategic plan is required to build a successful business or a brand in the market.
#4 Human resource issues
Entrepreneurs cannot handle and run a business alone by themselves. We require the support of human resource to carve a niche in the market.
Employees with the required knowledge, expertise, and experience are needed for the efficiency of the business processes and high levels of productivity.
First of all, it is quite difficult to find the employees that share the same vision and wavelength of the business. Plus paying a hefty annual or even a monthly retainer income is a problem of the start up’s as the finances at hand are always limited, and the overheads and expenses are also to be taken care of.
And secondly, it is also difficult to manage human resources as each of us work with a different mindset and perspective. Hence, human resources and employees can be as one of the Barriers to Entrepreneurship.
#5 Stringent rules and regulations of the market
It is not very easy for entrepreneurs to enter the new market as there are quite many rules and regulations imposed by the government authorities.
Plus there are various laws and compliances to be adhered to such as taxation, environmental regulations, licenses, property rights, and much more than act as the Barriers to Entrepreneurship.
Some of the countries have many corrupt officials that act as a hindrance for the new entrepreneurs and start-up brands to start or expand their business in the new market. And if the brand is planning to expand its business operations in any of the foreign countries, it gets even more difficult.
#6 Fewer opportunities
Even though there is a lot of talent pool in the market with the aspiring entrepreneurs buzzing with the ideas, but the opportunities presented to them are quite less and fewer.
Reasons such as nepotism and corruption act as the Barriers to Entrepreneurship with not many vital and lucrative opportunities.
#7 Lack of capacity
Even if there are opportunities presented to the aspiring entrepreneurs, there is a lack of capacity in some them to embrace the opportunities with open arms. The reasons can vary from lack of knowledge, lack of education, lack of willingness, lack of strategic knowledge, and cultural hindrances amongst others; but the factor of motivation and zeal gets missing.
To start a new business venture amidst all the risks and market-related issues, it requires a lot of hard work, passion, and high capacity to handle all of it.
#8 Less market experience
The experts always mention that one should never rush in setting up a business. It is quite necessary to gain a relative amount of work experience by working in the industry domain or sector of choice and as per the education levels. It also helps to sharpen the required expertise and find the ground in the career graph.
Once the person is ready to take risks and have a relative amount of market exposure, he is ready to take the entrepreneurial plunge.
#9 Lack of risk-taking capacity
It is always said that entrepreneurs never sail in safe waters and are never confined to their comfort zones. Lack of risk-taking capacity is the psychological mindset and perspective towards the business and acts as one of the major Barriers to Entrepreneurship.
The budding entrepreneur has to have a structured and organized approach towards the various business elements and should risks rather than averting them.
#10 Corrupt business situations
As mentioned earlier, if the business situations and the environment are not very supportive and corrupt for the young and aspiring entrepreneurs, it acts as one of the top Barriers to Entrepreneurship.
Bribing, rampant corruption, unfriendly ties of government with other nations, inconsistent laws, stringent compliances, and enforcing regulations that are unhealthy and negative in their approach hamper the growth of businesses in the country.
Russia is one of the examples of having an unhealthy and unsupportive business environment.
#11 Inadequate training
With no proper education, development, training, entrepreneurial skills, and technical know-how acts as the Barriers to Entrepreneurship.
#12 Lack of practical knowledge
Having a strong educational background is just not enough to pursue business as it requires practical knowledge as well to stay relevant amidst the various market cycles. And many entrepreneurs lack practical knowledge.
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Well done
Thanks Weldon too wishes to be a great business man in feature