Problems of Entrepreneurship
The lure of independence, profit and opportunity lead many to choose entrepreneurial pursuits. The avenues open to entrepreneurs today are greater than ever as the Internet has opened a new field of Web-based business opportunities. Just because there are plenty of opportunities does not mean that starting a profitable business is easy. Financial issues, management problems and marketing failures are issues that many startups face.
Lack of capital plagues many startup firms, and many close because of it. In addition to a lack of capital, insufficient cash flow compounds the problem. In the early days of its life, a startup company may have no cash flow. When product is available to sell, pricing may be difficult. Set the price too low and not enough revenue is generated; set it too high and the resulting slow sales have a negative impact on revenue.
The knowledge and skills of a creative entrepreneur do not necessarily equate to being an effective manager. This dichotomy can surface in several ways. A product that is beautiful to its inventor may not be viewed that way by others, and if the entrepreneur cannot recognize that, no amount of management expertise is going to help. Even with a successful product, the founding entrepreneur may not relinquish the management reins to a person more adept at managing a startup. A weak manager is likely to hire a weak management team with the result being an inadequate business plan and poor operational performance.
While a small business startup may have a unique product with potentially significant market appeal, it must be able to advertise in a cost-effective manner. Without adequate market research, an entrepreneur has no clue if the timing is right to introduce a new product or if the market is large enough to support the business. Without a clear understanding of the market, the entrepreneur may spend too much to acquire new customers. If the cost to acquire them is greater than the revenue the customer generates, then the firm cannot earn a profit.
Addressing the Problems
Entrepreneurs inevitably face challenges, even setbacks, during their quest for business success. You may have difficulty obtaining the financing to get started or your initial marketing efforts may prove unsuccessful. You may have to face starting all over or even declaring bankruptcy. Successful entrepreneurship requires that you persevere and pursue your idea even when your situation appears bleak.
Entrepreneurs must possess a high level of self-discipline. Unlike the typical work environment, there is no boss leaning over your shoulder, and nobody forces you to get out of bed in the morning and go to work. As an entrepreneur, you need the discipline to work even though it might be a beautiful, sunny day or a ballgame is on television.
You’ll likely spend the majority of your waking hours working at your chosen business enterprise. Therefore, possessing a passion for what you are doing is an important entrepreneurial quality. If you don’t enjoy or feel strongly about your pursuit, it may begin to feel like just another job. You may lose interest in your business, which makes achieving success much more difficult.
As an entrepreneur, you alone are responsible for your own success. Therefore, you must be able to promote yourself and your business on a continuing basis. Self-promotion is one of the most underutilized marketing tools available to entrepreneurs. You need to possess the confidence in yourself and your business idea to tell the world about it through relentless marketing.
Unless your business concept is completely unique, you’ll likely face a host of competition in your chosen enterprise. You’ll need to possess a competitive spirit to beat your competitors, much like an athlete who attempts to defeat her opponent. You also need to take the time to study the competition to understand what they do right and wrong, which results in a beneficial learning experience.
If you are starting a small business — or just considering it — you face great odds and opportunities. Do not relent, and it will surely become a success.