It comes without saying that building a business from the ground up can be challenging. The road is even bumpier for young entrepreneurs who lack experience. That said, younger business founders often experience a unique set of challenges that their older counterparts don’t usually deal with.
However, if you can identify what these challenges are, you may be able to find a way to go around them. If you’re planning to start your business at a young age, here are the top five hurdles that you should be aware of:
Top 5 challenges young entrepreneurs face today
1. Seeking funding
With their risk-averse nature, traditional lenders are especially reluctant to let small businesses with an unproven track record borrow money. Plus, being a young entrepreneur, most would probably still be burdened with student loans and other educational costs.
Knowing those facts, the lenders may view businesses founded by young entrepreneurs as high-risk investments. As a result, they would have lesser chances of qualifying for financing from lenders.
Fortunately, there is something that young entrepreneurs can do to overcome this hurdle. For one, creating a well-written business plan may help convince lenders to loan you the funds and give you better loan terms. It should outline everything from how you’ll run your business to your strategies and explain how each initiative will contribute to your company’s success. Remember, the goal is to impress them with your plan.
If you’re not in a hurry for funding, you can take the time and build your personal and business’ credit score. One of the ways to do this is to pay your bills on time. You can also apply for business credit cards to fund some of your business expenses early in the operations. However, you may need a higher personal credit score to qualify for better terms.
Alternative lenders (i.e., online lenders and other Fintech companies) may also be willing to take on the risk and grant start-ups with funding. However, considering the risk of the arrangement, the lenders may charge higher interest fees and/or require collateral and personal guarantee to secure the loan.
2. Feelings of isolation and loneliness
As a young entrepreneur, you’ll be faced with stereotypes from all directions. Many will not take you seriously because of your age. Most will not understand why you took an unconventional road and started a company. As a young entrepreneur, you might not get as much support as the older, more established founders usually get.
And that’s okay. There are a lot of ways to combat isolation and loneliness. Remember, you’re not the first young entrepreneur. So, go out and network with others. Talk about your experience with them and as for their advice. Still, remain in close connection with your friends and be present during family gatherings. Talk about your business and your accomplishments. This might help them open their minds up and support your venture.
Once you see your business grow through your efforts, the feeling of isolation and loneliness will eventually go away. You will then start unlocking opportunities to grow your business further.
3. Tackling common business challenges for the first time
As mentioned, many young entrepreneurs often lack experience in some business areas. That means, once their business is up and running, business-related problems could start coming their way. Being a first-timer, they wouldn’t know what to do or how to deal with the issue making it all too overwhelming.
The upside about being young is that you have a fresh perspective on things. Unlike older entrepreneurs, you’re more versed with the rising trends and technology. You can leverage your knowledge and use that to create innovative solutions.
This is also where the networks you’ve built can come in handy. Once you’ve established a connection with other young and successful entrepreneurs, you can ask for their advice. Chances are, they may have experienced the same obstacle before and could shed light on how you can solve it.
4. Managing stress
While it does give you some fulfillment, managing a business can get taxing and stressful. You might not be able to see an income coming in the first months or year, making it difficult to pay the bills. Whether minor or major, business problems can cause anxiety and stress, especially if you’re dealing with them for the first time. If left unaddressed, it can lead to burnout.
Deal with this type of challenge by reviewing your goals. You can write your goals down on a piece of paper and place it somewhere you can easily see it. Every time you feel overwhelmed and close to giving up, have a quick look at it to remind yourself why you need to go on.
Other methods of managing stress can also prove helpful. Exercise and meditation can help clear the mind and boost your mood during the day.
5. Hiring employees for the first time
Say your business has grown, and you decide it’s time to add more people to your team. However, in your experience, you’ve always been on the other side of the table answering the questions. Now, you’re calling the shots.
The process of finding the right employees for your growing company can be long and frustrating. Top talents will be scarce because there’s a higher chance that established and high-paying companies have already recruited them.
On the other hand, if you implement a remote work policy, you may expand the pool of prospective employees. With remote work, you can hire people outside your city and even from abroad. If you think about it, it can also lead to money savings as you won’t have to spend a lot on setting up a physical office.
When setting up an ad for remote workers, be clear about the job description and the qualities you’re looking for in a candidate. You can save a lot of time (and money) and avoid miscommunication if you’re upfront about their responsibilities at the very beginning.
Starting a business while you’re young may be challenging, but it shouldn’t stop you from pursuing your entrepreneurial passion. Challenges will be part of your journey. With enough patience, perseverance, and enthusiasm, you’ll be able to surmount the challenges and smoothly bring your business to success.