02 May The Biggest Challenge Facing Entrepreneurs Today
Thanks to the internet and social media, this is perhaps the easiest time in history to become an entrepreneur. And yet, with so much competition and so little barrier to entry, it’s perhaps at once the toughest time to become a successful entrepreneur. In order to better understand the challenges facing entrepreneurs today, I asked leaders from the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs what their biggest challenges are. At the end, you’ll find my answer to the question. In the meantime, here are their biggest challenges:
1. Finding Great Talent
Talent is migrating to places such as Silicon Valley and NYC, and it is making it harder to grow a small business in a small town or, in my case, an international city such as Beijing. We are noticing that we’re having to find more and more talent online given the migration of many intelligent and ambitious peers.
2. Paying off Student Loans
More than 38 million Americans are currently tethered to student loan debt that totals close to $1 trillion. Many of them are millennial entrepreneurs. In the past, entrepreneurs could invest a sizable portion of their revenues back into their businesses, but many are now forced to keep running in the hamster wheel of student loans, which takes that money away from growing their businesses.
3. Developing Personal Relationships With Customers
Being opportunistic as an entrepreneur is important, but it’s too easy to be distracted by the rapid pace of change in the landscape by a single investor’s guidance, a potential strategic partners one-off needs, a sales person’s needs for a deal, etc. Focusing on your customers and listening to them first and foremost about what is valuable to them is crucial.
4. Keeping up With Innovation
Innovation happens in the blink of an eye. One of the biggest challenges facing entrepreneurs today is new technology that could make their business or strategy obsolete. With the rapid pace of innovation, it’s important to identify trends that will affect your business and stay ahead of the curve. Shifting a business model or updating technology requires excellent management and an agile team.
5. Taking on Too Much
I’ve found most companies get some clients, but don’t know how to say “no.” The company over promises or thinks it can do more than it can when it gets past the startup phase. Most companies die of indigestion, not starvation.
6. Creating a Great Culture
The biggest challenge facing entrepreneurs today is creating a culture that attracts and retains the talent needed to become a great company. It is something simple, but often overlooked because of the incoming tasks and priorities of launching a startup.
7. Keeping up With Government Regulation
The single biggest challenge to entrepreneurs today is overburdening governmental regulation. Starting the exact same business today opposed to 20 years ago requires exponentially more paperwork, regulation and oversight. The increased infrastructure and intellectual capital required to navigate today’s federal and state regulation equals burdensome capital requirements for the entrepreneur.
8. Establishing Credibility
Everybody can be an entrepreneur these days, so there are businesses popping up everywhere. The way you stand out from the pack is by building your credibility along with the credibility of your product or service. If an entrepreneur can’t create trust with their customers, they have no chance of surviving in this crowded world.
9. Balancing Sales and Marketing
Entrepreneurs may have a brilliant product or service but land in a “catch 22” when getting their feet on the ground to sell and market their products. The catch: we need sales to afford a sales/marketing lead, but we need a sales/marketing lead to generate sales.
10. Managing Cash Flow
Managing cash flow when starting a business can be really tricky. It takes money to make money, which can be a huge challenge for a budding business that hasn’t yet established a consistent cash flow. Personally, I made sure that I had an emergency fund in place for myself from the beginning so that I had some buffer while we were working on getting to a more consistent cash flow.
11. Staying Focused
Entrepreneurs run into trouble when they try to “boil the ocean” instead of ruthlessly focusing on really nailing one core market or core product.
12. Earning Trust
According to the Edelman Trust Barometer, 82 percent of those surveyed don’t believe business leaders tell the public the truth. In other words, your prospects are already looking at you with skepticism and doubt. Yet, buying decisions are biased to businesses you know, like and trust. The new job of marketing is to position yourself as a trusted authority
13. Thinking Simple
Every idea spawns more and more ideas to the point where you can have a whimsical business concept. It’s so easy to say “keep it simple, stupid,” but I’ve seen entrepreneurs overthink features and products. Get it out there, get feedback and iterate. That’s a good way to minimize the risk every entrepreneur faces.
14. Getting Funding
The biggest challenge facing entrepreneurs today is getting the funding to create or grow their businesses. Many banks and investors are hesitant to give out loans or buy shares. Getting the financing needed often requires a phenomenal sales pitch and business plan.
– Jay Wu, Creator, A Forever Recovery
15. Standing Out
With it becoming easier and easier to become an entrepreneur, especially in the online space, it is becoming increasingly difficult to filter out the noise. It is critical to not only hire quality talent, but to also build quality partnerships in a fledgeling startup. The question is, how do you get noticed in the crowd? - James Simpson, CEO & Founder, GoldFire Studios
These 15 challenges are all difficult, but the number one biggest challenge facing entrepreneurs today is the same exact challenge that’s always faced entrepreneurs: YOU.
The biggest challenge to an entrepreneur is the entrepreneur him/herself: Fear, self-doubt, lack of focus, and self-sabotage can bring down even the most brilliant entrepreneur with the best idea.
In order to succeed as an entrepreneur, take the above 15 challenges very seriously, but know that the most important challenge to overcome is your own nagging fear and self-doubt.
You can do it!