Becoming an entrepreneur is HARD.
With the number of new start-ups falling by nearly 44% and when you consider that 90% of new businesses fail, it’s no surprise that even before we entered the global pandemic, entrepreneurship was at an all-time low.
But this isn’t down to a lack of ideas or desire to start a new venture. In fact, over 55% of the population have the ideas and desperately want to start their own business. It’s because the road to becoming an entrepreneur is often filled with barriers that budding entrepreneurs need to overcome if they want to be successful.
This article will cover three of the biggest start-up barriers and offer suggestions on how to jump right over them.
First, let’s look at…
Why you’d want to be self-employed
If you’re reading this, I’m assuming you’ve harboured thoughts about becoming an entrepreneur? And why wouldn’t you: You get to be your own boss, pursue your passion, work as flexibly as you like and start something new, exciting and fulfilling. Plus, the potential to earn big dollar is within touching distance, right?
But for some, the motivation to start their own business comes from an opportunity they couldn’t miss, a reluctance to retire, or simply being made unemployed.
Regardless of where the drive to take on the huge risks that come with starting a business comes from, most entrepreneurs will face the following obstacles on their journey which can squash this motivation and lead to failure.
So, don’t be another statistic: Understand these three barriers and learn how to overcome them before you set off on your entrepreneurial journey.
Entrepreneurial barrier #1: Fear of failing
The biggest barrier to becoming a successful entrepreneur is yourself and your fear of failing.
6 out of 10 people feel they don’t have the confidence to start a business because they fear it might fail.
Imposter syndrome or the fear of failing is something we all struggle with. But, because the risks involved with starting a new business are so high and the outcome is so unknown, it makes this fear of failure more prevalent in entrepreneurs.
“The fear that stems from uncertainty means only a fraction of the people who have the entrepreneurial ambition to start-up their own business ever see their plans come to fruition.” – Roarwap
After all, quitting your stable job and the security of a regular paycheque along with it, is daunting: Is my idea going to work? Am I on the right track? Am I doing the right things? Will I make money? Will I find investors?
So, how do you overcome the fear of failure and stop it from holding you back?
Overcoming the fear of failing barrier
There isn’t one, single entrepreneur that hasn’t felt the cold clutch of fear at some point, especially during the beginning stages of building a start-up company.
The trick is learning how to proactively conquer this fear in your mind, and not let it take over your rationality.
Tony Magee, the CEO of Lagunitas Brewery, felt crippling fear when he was first starting out. But he managed to turn that fear into a strong motivator: Fear pushed him forwards each day. It drove him to work harder, make smarter decisions and think strategically. Fear was his “silent companion that he had to beat every day.”
There are also several practical things that you can do to proactively manage the fear and stop it from stopping you:
Get yourself a network of mentors: Luckily for you, there are entrepreneurs out there that have fought the battle of fear and won. So, lean on them: Ask them for advice, listen to their experiences and learn from their mistakes.
Surround yourself with positive people: Naysayers who constantly doubt or question your direction, ideas and state of mind will only feed into your fear and make it grow. Build up a network of positive people around you instead. Surround yourself with people who want you to do well and who share the same passion, goals and vision.
Refocus on your end goal: It’s easy to lose sight of why you’re doing this. If times are tough and the fear is strong, it can be all too tempting to throw the towel in and give up. But don’t. First, allow yourself some time and space to go back to your roots and rediscover why you wanted to start this in the first place.
Entrepreneurial barrier #2: Financial strain
79% of start-ups fail because they didn’t have enough money. Fact is, no matter how brilliant your idea is, if you don’t have the capital or investment to get it out into the marketplace, it will fail.
“Getting a sound financial investment or funding can be one of the biggest barriers to entrepreneurship” – Marketing91
The problem is that most banks, investors, and stakeholders find it difficult to part with their cash and put faith in new start-ups because it’s highly risky and, understandably, they worry about losing their money.
So, if, like many entrepreneurs, you aren’t well-connected to an angel investor or you don’t have deep pockets how do you get enough capital together to develop your product or service and get it out to customers?
Overcoming the financial strain barrier
Aside from winning the lottery, there are a few money trees that you can shake to help you raise enough capital to get your business up and off the ground.
R&D incentives: Start-ups are usually created to fill a gap in the market. This often means that entrepreneurs need to spend time, money and resources researching and developing new and innovative products or services, which makes them eligible to receive financial support from the government in the form of R&D tax relief or R&D grant funding.
Family and friends: They say never mix business with pleasure, but your friends and family are your biggest supporters and could make the best possible investors for your business. Certainly, asking them to invest in you and your business needs to be handled with extreme care, but you could agree that the investment would be a loan without interest, and draw up a payment plan to make sure it doesn’t put stress or tension on your relationship.
Business partners: Although you want to get your business up and running yourself, it might be worth finding someone who can share the burden with you, both financially and also mentally. You might know someone who has expressed an interest in your idea or has enough funds to help you get started. You could always agree to pay back their investment within a certain timeframe or retain the majority share in the business, so it still feels like yours.
Entrepreneurial barrier #3: Finding the right people
If you want your business to be a success, you’ll probably need to hire some help at some stage: You can’t do it all on your own.
But, as a start-up, finding good employees can be the hardest bit. Some candidates might be put off by the riskiness associated with working in a small start-up compared to a bigger established organisation. Plus, because start-ups are small, you’ll need self-starters who don’t need spoon-feeding, that have a well-rounded set of skills and don’t mind picking up tasks that are outside of their original job description. And, above all else, you’ll need to find those rare people that are as passionate about the business as you and will bend over backwards to help you push it forwards.
It’s a lot. Especially if your budget for recruitment is on the low side. So, what can you do to overcome it?
Overcoming finding the right people barrier
“Finding good employees is the key to any budding business’s success.” – Forbes
These days it’s easier than ever to find and hire the right people. With the move towards remote working, you have the biggest pool of candidates to fish in. But this big pool of candidates also makes it harder than ever to find the right person. You have to determine if you’ve caught a nice, tasty salmon that you can cook up for dinner, or a rotten old boot that needs throwing back in.
So, how do you recruit the right person?
Establish what you want: It sounds obvious, but it’s worth investing time into looking at what your business needs and establishing exactly what type of person would fit in with that and what kind of skills they would need to have.
Learn about people: It’s important to see where the candidate you’re considering would fit in with your company, and how they might develop to become an integral part of it. So, research how to read body language, learn how to read people, closely review their credentials and come up with a list of questions that will allow them to open them up and let you see who they truly are.
Offer incentives: Once you’ve found the perfect person, it might be a challenge to persuade them to come on board. Some might find the idea of accepting a position in an early start-up daunting: Start-ups are rewarding places to be, but they’re also incredibly risky! So, you might want to offer incentives to make the risk worthwhile. Incentives such as remote working, flexitime, unlimited holiday, total role autonomy, opportunities for promotion etc… cost nothing but will help you to sweeten the deal and snare that dream candidate.
If you’re one out of the 55% of people who want to start their own business but are helplessly paralysed to do so by fear of failure, financial constraints, or finding the right people to help you, then I hope this post has helped.
You have the ideas, you have the passion and you have the drive.
What’s stopping you?