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Terry Tateossian is a 4th generation entrepreneur, growth hacker, social fix media.
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Starting a new business is like stepping into the unknown. This is what many entrepreneurs find thrilling and inspiring. Leaving your safe harbor, giving up on who you are today, and exploring possibilities is a call to adventure. Starting a new business means leaving your comfort zone behind to find your personal legend. But leaving your comfort zone and off the beaten path can be a nerve-wracking and stressful experience, even if you have determination, plans, and creative concepts that no one else has thought of. . There are many challenges that entrepreneurs face, some of which are essential, while others relate mainly to personal issues. Entrepreneurs also face external burdens such as labor shortages, inflation and legislation that have no solutions and are not always in control of their business.
There are many obstacles along the way and being an entrepreneur can be a daunting journey. Still, learning what challenges exist and how to identify them is the first step to entrepreneurial success. Based on my experience as a fourth-generation entrepreneur, here are some of the most common challenges American entrepreneurs (myself included) face.
internal strain and limit
The success or failure of a startup often comes down to the entrepreneur’s own personal characteristics, strengths and weaknesses. While there is no magic formula for starting and growing a business, there are certain traits that entrepreneurs can cultivate if they want to be successful.
Successful entrepreneurs are not only creative, they demonstrate good strategic thinking. They can figure out how best to use their resources (money, equipment, skills, time) to achieve the desired outcome. Successful entrepreneurs are also good at evaluating progress and prioritizing tasks based on their importance and relevance. They can effectively manage operations, cash flow, people and, in some cases, creditors, shareholders and investors. This requires strategic planning for short-, medium-, and long-term goals, as well as the ability to engage in market research, economic forecasting, and decision-making analysis.
Lack of strategic thinking can have disastrous consequences as entrepreneurs fail to recognize key hazards and gaps. Excessively large investments, high input costs, wastefulness, inappropriate product mix, or excess manpower can occur, all of which impact the ability and competitiveness of a business. .
external factors
Most of the external challenges faced by entrepreneurs arise from environmental factors that are not always within their control. Examples include inflation, labor shortages, financial and industrial regulations, taxation, unstable or competitive environments, to name a few.
inflationary pressure
Inflation in the US hit a record high in more than 40 years, and prices for things like housing, food and gas rose fastest. For entrepreneurs, this means that the raw materials, energy and commodities required for production are becoming more expensive. Inflationary pressures and rising interest rates also affect not only customer behavior and purchasing decisions, but also the cost and availability of capital and loans.
The extent to which inflation affects entrepreneurs depends on the service or product they offer, their target market, and the strength of their brand. For example, businesses that provide essential goods are less susceptible to inflation than non-essential goods. Consumers will continue to spend money on essentials such as food and hygiene products, and reduce unnecessary spending on dining out, entertainment and travel.
While there’s no denying that such factors play a role and need to be accounted for, there are some things entrepreneurs can do to help them weather inflation. For example, eliminating financial leakage, automating, changing pricing models, and repositioning brands.
labor shortage
The labor shortage in America is far from over, as recent data from the Bureau of Labor Statistics makes clear. His turnover rate is 2.7%, with about 4.2 million Americans out of work as of November 2022.
As labor shortages begin to permeate the industry, new companies will have to get creative with their hiring. One of the many solutions is to use alternative channels such as social media and freelance recruitment platforms. Other ways to address labor shortages include offering flexible work schedules, starting apprenticeships, college job fairs and partnering with local organizations.
Financial and industrial regulation
An increase in the number and variety of procedures that companies must comply with can have a significant negative impact on entrepreneurial activity. Examples include increased property registration and licensing requirements that impose additional paperwork and financial burdens on businesses.
Government regulation has expanded significantly over the years, but there are ways to overcome regulatory challenges. For example, Airbnb chose to build a government response team of regulatory experts and lobbyists. Uber and Lift, which dominate the U.S. ride-hailing market, chose which countries to launch their services in.
Small businesses don’t always have the resources to hire lobbyists or regulatory experts, but at least they can find lawyers who can help them understand a variety of legal issues. Topics include corporate governance, privacy issues, intellectual property, client contracts, and more.
final thoughts
Most entrepreneurs would agree that nothing beats the thrill of starting a new business. Taking control of your future is both exciting and empowering. It also has the power to seek, try, and find solutions that no one else has. Even if your product becomes more mainstream, every day is a constant stream of learning new things, solving problems, and finding creative ways to do business.
Despite the many challenges, being an entrepreneur is one of the most rewarding and satisfying professions. And entrepreneurship is more than just a money game. It is the satisfaction of approaching challenges and overcoming obstacles in new ways, whether in competition with others or with ourselves.
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