Barriers to Entrepreneurship
Every entrepreneur aims to follow their passionate approach and convert it into a successful business by earning more and more profits and creating goodwill in the market. But many barriers can block the path to the success of entrepreneurship. So there is no other option for an entrepreneur to be successful without solving or removing these major barriers in their respective field.
The list of some such major barriers that may arise while starting or running a new business is given below:
1. Managing Finances
A great barrier that arises while starting a new business is managing the finances that can make things difficult for the entrepreneurs. There are lots of ideas that come to the entrepreneurs' minds but converting those ideas into the business needs enough amount of finance. There should be a stable and regular source of finance to keep the production process smooth. If this first and the most critical barrier can be solved easily then the future barriers can also be tackled.
2. Inadequate Market Experience
One of the most common barriers that are faced by many entrepreneurs is not having adequate knowledge about the respective field of their business. An entrepreneur must have enough experience related to the industry by working in the required sector. So, before starting a new venture, it is required to collect enough knowledge about the market conditions, nature of the business firm, demand and supply of that particular good or service, etc., instead of rushing into the business by seeing the success of others.
Other than this, if an entrepreneur has adequate expertise then it will be helpful for him/her to get success in their career. Although, we know there is always a certain risk involved in a business and the required set of knowledge reduces this risk by creating a strong base.
3. Human Resource Problem
A person can't perform all the tasks by himself/herself even if he/she has enough knowledge. In the same manner, an entrepreneur can't do all the jobs alone to run the organization. A business needs to have a strong base of skilled and knowledgeable human resources or employees. Employees are the most important assets for an organization. They help in the growth of the business. The organizations may have similar fixed and current assets but these are the human assets that make the organization different from its competitors. But for this purpose, the employees must be enough experienced and dedicated to the organization so that top-level productivity and efficiency can be achieved.
An entrepreneur has a large set of applicants who can do a particular job but choosing the best from them is not an easy task. Other than this, the entrepreneur should also see that the candidates who are applying need to have a vision that suits them in the favor of the organization.
When a new venture is started, the management of finance is also a very herculean task because of the limited availability of capital. So, the entrepreneur should never pay a huge salary for the sake of an experienced employee in the beginning.
Because of all these reasons, it is ideal to remove the barrier of human resources so that the business can be run smoothly and the employees can perform their jobs adequately.
4. Non-strategic Planning
Having inadequate planning regarding strategies can also create a great barrier in the path of success of entrepreneurship. There are lots of entrepreneurs who started a business just as a hobby without having a long-term vision and plan. Bad strategies and planning may lead to the failure of the business or can cause a huge loss to the business. It is the prime reason why most entrepreneurs give up in the first year of business operation.
A person should have a solid passion and dedication for being a successful entrepreneur and to create a strategic vision to achieve the goals.
A perfect strategic plan is based on the target customers, market conditions, consumers' tastes, and preferences, proper use of human, financial, and other resources, future goals, etc. All these things are required in the perfect combination for a business to be successful.
5. Lack of Capacity
Many entrepreneurs can't use the opportunities perfectly because of their limited capacity. It can be a major hurdle in the success of entrepreneurship. This hurdle can be arising due to the lack of education, knowledge, willingness, and other important aspects. In simple terms, the absence of zeal and motivation may lead to the failure of most of the new ventures.
Apart from knowing the issues related to market risks and competitions, tons of hard work and passion is also what a business demands to deal with different problems and circumstances that arise in the organization. This is very useful in the growth and development of the business and in increasing the company's turnover and goodwill.
6. Political Barriers
The politics of a country or region can also become a barrier to the success of entrepreneurship. So an entrepreneur should check out the policies of the government and the incentives offered by the government to the entrepreneurs. This is because every government does not provide socio-economic facilities to entrepreneurs. Other than this, it is also required to take the interest in economic development seriously.
Some governments provide special security to the new ventures to protect them from the market competition and so that they can survive in the market. Hence, an entrepreneur must evaluate the political factors carefully before set-up the business firm. It is very helpful in the long-term survival and growth of the business.
7. Lack of Practical knowledge
Many youngsters believe that an entrepreneur must have an adequate educational background to make the business successful, but the reality is completely different. Most of the schools and colleges focus on bookish knowledge instead of providing practical knowledge to the students. Every entrepreneur may have the same bookish knowledge but it is their practical knowledge that makes them unique in this highly competitive market. Lack of this practical knowledge can also become a barrier in the path to the success of a business.
Entrepreneurship is an art that is more based on practical knowledge instead of theoretical. So, every entrepreneur must gain enough practical knowledge of the market conditions and other relevant things before trying their hands in the business.
8. Not Having the Right Team
Business is not the work of an individual. It is teamwork in which every person has different skills and jobs which are based on those skills. So, it can be said that a business is run by the contribution of all the individuals. The right team or teammates or can say employees are the most important aspect for the success of a business. It is one of the biggest barriers for a start-up to find good employees. It is often seen that most of the new ventures work on a small scale which makes it more difficult for them to get experienced, skilled, and good employees. To solve this problem, an entrepreneur should make the required measures so that he/she can assign the jobs to those employees who can boost the business by their effective and efficient performance.
9. Corrupt Business Problems
One of the most common problems with a business especially with new ventures is the corrupt environment. If the environment of the country is corrupt then it does not inspire the young employees and entrepreneurs. In many countries or regions, the unhealthy and non-supportive government creates lots of issues. That's why it is suggested to check out the regulations and stringent compliance before starting a new venture. This corruption of the government can become a major hurdle in the success of a business on a pretty higher level. So, an entrepreneur needs to take things seriously.
10. Difficulty in Reaching to More People
One more barrier that an entrepreneur can face is the difficulty in reaching more people or attracting more customers to inform them about the products or services in which the firm is dealing. A business can lose its path of success if it will not be able to advertise its products and reach the required community in the target market. A successful foundation can only be set up if there will be no barrier between the audience and experts. So, there is the need of having a strong foundation to achieve the planned goals. This problem can be solved by developing effective jobs so that good marketing and advertising strategies can be formed. This will be further helpful in providing information to a large number of people about the organization and its products.
11. Fear of Failure
To get the profit, an entrepreneur has to bear some sort of risk also and it is the entrepreneurs' capacity of bearing the risk which decides the amount of profit that the business can earn. So, it can be said that it is the state of mind which helps an entrepreneur in getting a clear vision so that the risk can be faced without fear. But when a new venture is set up then there is always a fear about the arrangement of initial funds, investors, and many other things. This fear creates pressure on the minds of the entrepreneurs and increases their tension of being failed. The fear of failure can become a huge barrier in starting a new business or running it smoothly. So it's all up to the attitude of the entrepreneurs how they deal with their fear and overcome it to become successful.
12. Few Opportunities
When a new business is started, there are very fewer opportunities available for the entrepreneur. It is also not easy for an entrepreneur to figure out these limited opportunities in the beginning. To get more opportunities, a business must start growing. Limited opportunities can be a hurdle to entrepreneurship. There is almost zero possibility of being successful without having opportunities. Opportunity is also one of the major factors of SWOT analysis.
13. No Training
There is always a great demand in the market for a trained employee. A company always searches for such employees who are trained in their particular job. But for an entrepreneur, it is not enough to have the knowledge or training of a particular field. He/she must be the package of knowledge in all the fields. However, it does not mean that the entrepreneur should be a jack of all trades, master of none because it can also create a barrier in starting entrepreneurship. If the entrepreneurs will not have perfection in a particular field then they will not be able to decide what business they should start. So in this way, it can be said that an entrepreneur should be trained in all works related to the business environment but must have mastery in a particular field also.
14. No Backup Plan
Before starting a new thing, we must have a backup plan in the case of the failure of our main plan otherwise it can create huge trouble for us. In the same manner, when an entrepreneur starts a new venture then he/she must be ready to face the failure, and to deal with them the entrepreneur must have a backup plan or can say plan B. But most entrepreneurs start their business without having a backup plan which can create a barrier for them as they are always at a high risk of failure. Plan B is not only required for the failure of a project but also for the failure of the whole business plan.
15. Limited Technical Skills
Nowadays, most business ideas are based on technology. In such an era, it is easy to start a business for a technical guy but if you have a lack of technical knowledge or skills then it can be a great barrier to you. Limited technical skills can cause a loss to the business. The entrepreneur may hire a particular person to get advice on the issues related to the technical field but it is not always beneficial for the business. Also, it demands additional costs to the organization.
16. Lack of Motivation
The biggest motivation for any business is Money. When an entrepreneur starts a business then it takes some time to make the market value of the business. During this period the profit earned by the business is not so high which may reduce the motivation of the entrepreneur as well as of the employees of the organization.
Other than this, failure of a project can also affect the motivation of the employees and the owner. In such cases, it is a must for the whole organization to have some patience and be motivated to achieve future growth and profit.
17. Psychological Pressure
In countries like India, another barrier is psychological pressure in the mind of entrepreneurs. This pressure can be because of any reason such as parental pressure, societal pressure, financial pressure, carrier pressure, etc. One of the biggest examples of these pressures is the pressure created by the family and society to be successful in the carrier. This creates the fear of being failed which gives birth to mistakes and then these mistakes can cause huge losses to the firm.