Those are just some examples of global companies founded by young entrepreneurs.
While entrepreneurship goes hand in hand with fame, money, and reputation, pursuing this career can be challenging.
Experiencing fear and the lack of money, many young entrepreneurs give up. According to the Harvard Business Review, the average age of a successful startup founder is 45.
In this article, you will learn more about the challenges young entrepreneurs face and how to overcome them.
Experiencing Weakness and Self-Doubt
The entrepreneurial lifestyle is not enviable. You will face numerous obstacles and risks. Given these challenges, it is natural to feel the sting of uncertainty and self-doubt at some point. According to research studies, 41% of young entrepreneurs aged 25-34, who consider becoming entrepreneurs, are held back because of their fear of failure.
It is vital not to let these negative thoughts and fears discourage you. Find a way to overcome self-doubt and focus on the positive sides of your entrepreneurial career.
For starters, family and friends who know your goals and values will back you up. You can also connect with other young entrepreneurs who can provide you with objective tips. It is nice to connect with like-minded people with similar problems and career goals.
Also, when you lose confidence in your abilities, look at what you have accomplished so far. Think about your progress and the people who have helped you on your entrepreneurial journey.
Never compare yourself with competitors who have achieved more or less than you. The only person you should be comparing yourself to is you when you were starting out.
Managing Cash Flow
Entrepreneurs often rely on measuring profit as the most reliable financial metric.
While profit tells you how your startup is performing, it does not provide an accurate assessment of its ability to cover the expenses critical to your day-to-day operations. According to Federal Reserve Banks, to keep a positive cash flow, 67% of small business owners use personal funds.
Most companies use the accrual accounting technique. It records income and expenses when you earn or incur them. However, it is not always reliable since not all profits or losses are instantaneous.
For many entrepreneurs, delayed invoicing is one of the most common cash flow issues. Namely, you perform a job, send an invoice, and get paid 30 days later. Meanwhile, you need to pay company bills, employees, and contractors.
To address this issue, have a proper budgeting and planning technique.
For example, to cover your tax bills on time, consider seeking alternative funding options. During the tax season, many financial lenders offer tax loans with lower interest rates and longer repayment. That facilitates paying for tax and helps you manage your startup’s cash flow with greater flexibility.
Or, you can require faster invoice payments. For example, if you typically give customers 45 or 30 days to pay, consider cutting it to 15 days. Just make sure you notify your customers on time before making such drastic invoicing changes. If a customer is late with their payment, you have two weeks more to reach out to them and get paid before the next month’s bills are due. Many companies have started requesting payments upon project completion.
Hiring Top Talent
Finding and hiring top talent is one of the most challenging aspects of entrepreneurship. The hiring process is time-consuming and complex – you need to review resumes, sit through interviews, filter out unqualified candidates.
To find the right candidates, start by optimizing your job ads and making them more specific. Provide thorough details on what qualifications candidates need to have, what their responsibilities are, what wages and benefits are, and which days and hours they will work. Only the candidates that meet your criteria will apply for the position. You can analyze them and create a pool of prospects that meet your expectations.
Now, many young entrepreneurs make the same mistake focusing on candidate skills, knowledge, and competencies. However, that is not enough. At the early stages of your startup, it is vital to surround yourself with like-minded people who share your visions and goals. Most importantly, they need to align with your company culture. Observe employees as your partners that will help you operate and grow your startup.
Consider arranging a walking interview in which you take candidates on a tour of their working environments. Give them a chance to connect with your employees and ask them questions. Talk to them about their expectations and long-term goals.
When building a team from the ground up, you can also bring in the candidates who will need to collaborate for a group interview. That way, you can determine how well they will collaborate and communicate daily.
Efficient Time Management
As a young entrepreneur, you wear multiple hats. That is why you need to learn to manage your time more effectively.
Remember that better time management is not just about working harder. It is about working smarter.
For starters, learn to prioritize and optimize your tasks. Rather than letting unplanned requests for meetings or teleconferences, consider limiting your time invested in unplanned activities. For example, you could spend five minutes answering emails or 10 minutes on unexpected phone calls.
Delegating Tasks to their Team
For many young entrepreneurs, wearing multiple hats may seem rewarding and achievable. However, that is not so. Accept the fact that you cannot do everything by yourself.
No matter how amazing and innovative your ideas are, you will not have time to execute them. That is where delegating tasks steps in.
Delegation is your most reliable way to free yourself up. That way, you will bring the maximum value to your business. When outsourcing tasks to the right people and giving them the nudge in the right direction, you will meet deadlines faster and optimize the overall workplace performance.
To get the most out of the delegation process, you need to learn a few tips.
For starters, you may be tempted to micromanage your team and outsource small tasks only. However, that can compromise your team’s performance. Your employees will focus on the small stuff rather than looking at the bigger picture.
Next, you will need to follow op. Once you assign a task to an employee, reach out to them. Ask whether they understand the task and can properly execute it.
Most importantly, trust your employees. While following up with your staff to track their progress is fine, you do not have to micromanage. Give employees complete trust and let them prove they are worthy of it. That way, they will act more responsibly and meet deadlines faster.
The Lack of Funding
The most common problem young entrepreneurs face is the lack of resources. You have an amazing business idea and you want to start a business, but you have little capital to do it. According to statistics, the biggest challenge for 33% of small business owners is the lack of capital.
When starting a business, make strategic decisions. For example, instead of planning to start a multimillion-dollar conglomerate, focus on hiring a small team and attracting your core customers. Expand your business strategically.
Next, choose the right funding source for your business, including:
- Angel Investors
- Small business loans
- Series funding
- Personal savings
- Friends and family
Choosing the Right Products to Sell
Only by creating unique products that solve customers’ problems will you be able to stand out and beat your competition.
If you have never done market research before, consider hiring a marketing company or a freelance researcher. Have them perform market research and compose a report with suggested niches for your startup. They will identify your potential competitors, offer potential profit margins, and do a detailed SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.
That way, you will be able to identify potential gaps in your target markets and design more relevant products.
When choosing a product to sell, focus on your frustrations and problems. The goal is to find solutions to them. That is exactly what the founders of Airbnb did:
“If we tried to think of a good idea, we wouldn’t have been able to think of a good idea. You just have to find a solution for a problem in your own life,” Brian Chesky, co-founder of Airbnb, claims.
Start your Entrepreneurial Career Strategically
Young people face numerous challenges on their entrepreneurial journey. However, that should not discourage you from pursuing your dreams. Even if you fail, you will learn an important lesson you can apply to your next venture.
As an entrepreneur, you need to be brave and resourceful. True entrepreneurs will always find ways to overcome fears and problems.
That is why you need to take the following steps:
- Choose what to sell
- Surround yourself with the right people
- Manage time more effectively
- Beat weakness and self-doubt
- Delegate tasks
- Choose the right funding options
Do you have any thoughts on the challenges young entrepreneurs face? Please, share your experiences and opinions with us!