5 Challenges Entrepreneurs Will Face in 2021, According to Data

5 Challenges Entrepreneurs Will Face in 2021, According to Data

This might not be particularly mind-blowing or revolutionary to say, but being an entrepreneur isn’t easy. It takes a lot of guts, persistence, business acumen, and strategic thinking — and even having all those qualities in spades might not be enough for a business owner to stay afloat.

Certain challenges exist well beyond any entrepreneur’s control. And while those roadblocks might be troubling, they’re not necessarily insurmountable.

Here, we’ve compiled a list of some of the most pressing issues many entrepreneurs will have to face in 2021 with some tips on how to overcome them. Let’s jump in.

Challenges Entrepreneurs Will Face This Year

1. Finding Mentorship

Entrepreneurial endeavors can be hard to navigate alone — particularly for younger founders. Access to advice, insight, and direction from more seasoned business owners can help keep things on an even keel for new and aspiring entrepreneurs.

But pinning down that kind of direction is easier said than done. According to a study by the Kauffman Foundation, 60% of aspiring entrepreneurs cited finding mentors who can provide guidance as a challenge.

While mentorship can be tough to track down, there are plenty of forums where you can find it. General networking events, industry-specific expos, and social media platforms all provide opportunities to connect with like-minded, more experienced businesspeople.

If you choose to go any of those roads, the key is being willing to put yourself out there. Don’t be reluctant to reach out to potential mentors. Obviously, there’s no guarantee everyone you touch base with will want to offer guidance, but plenty of experienced business owners are willing and excited to share their insight with up and coming entrepreneurs.

That might be something as simple as a one-off phone call or as significant as consistent contact as your business grows.

2. Finding Customers

Another study from the Kauffman Group found that finding customers was the most common challenge cited by entrepreneurs — with roughly 72% of respondents reporting having struggled with the process.

Finding customers is one of the — if not the — most fundamentally important tasks entrepreneurs have to address if they want their business to take off. And in most cases, you can’t bank on customers simply finding their way to you.

As an entrepreneur, it’s on you to get the word out about your brand — self-promotion is how you get the ball rolling. Build a robust network with a solid, active online presence.

Attend industry events and trade expos where you can put your product or service on display. See if you can create some sort of referral program to make your current customers work for you.

Visibility is key, so one way or another, make your presence known. Customers won’t find you if you stay isolated and reluctant to spread the word about your business.

Branch out and actively promote your brand. There’s no guarantee prospects will be receptive to your company, but you have to give them a chance to make that call.

3. Inclusion and Opportunity-Related Barriers

Some of the most pressing, troubling challenges many entrepreneurs face have to do with inclusion and opportunity. According to research from Robert Fairlie, Professor of Economics at the University of California, Santa Cruz, the pandemic disproportionately affected businesses in underrepresented communities.

According to the study, African‐American business owners were hit the hardest by COVID‐19. The first estimates the study found in April 2020 for black business owners in the United States indicated a drop of 41% in business activity.

Latinx businesses saw a similar impact, losing roughly 32% of active business owners in April, 19% in May, and 10% in June 2020. Asian business owners experienced a 26% decline in business activity over that April and continued losses of activity of 21% in May and 10% in June.

Immigrant business owners were also devastated with losses of 36% of business activity in April. Continued disproportionate losses were felt in May and June — with losses of 25% and 18%, respectively.

Although industry distributions placed some groups at higher risk of closures in the pandemic, discrepancies in the scale of these businesses contributed to those disproportionate losses in business activity.

Minority-owned businesses are typically smaller and, in turn, lack the resources, legal structure, and established customer base larger companies have to stay afloat.

4. Self-Doubt and Fear

The Kauffman Group also found that self-doubt and fear weighed heavily on entrepreneurs — with roughly 50% of them citing it as a major challenge. This particular pain point was exacerbated by the pandemic.

The business owners surveyed in the study cited personal health and safety, uncertainty about what to plan for, uncertainty about timing and nature of re-opening their businesses, and uncertainty about the economy and society as major concerns.

Considering how in flux and volatile the business world is at the moment, there’s no easy answer for how to remedy this issue. We don’t have definitive reference points for when companies will be able to operate like they had been pre-pandemic.

There’s no telling when entrepreneurs whose businesses rely on travel can bank on prospects and customers flying regularly. At the end of the day, we can’t allay uncertainty when there isn’t too much to be certain about.

The best thing business owners can do about this issue is do their best to ride this brutal stretch out. Given how broader circumstances are trending, there might be some light at the end of the tunnel. While it might not be particularly bold or comforting to say, entrepreneurs have to have faith that things will get better and the patience and persistence to see that faith through.

5. Keeping Pace With Changing Laws

The legal goalposts many business owners have to consider are constantly moving. According to a list from Funding Circle, in 2020 alone, many companies had to account for overtime rule changes, shifts in health insurance requirements, minimum wage increases, and the introduction of internet privacy regulations like the California Consumer Privacy Act (CCPA) — among a number of other new and amended laws.

Some business owners struggle with tracking and adjusting to those kinds of legal shifts. Luckily, most newly passed laws feature some runway before compliance becomes mandatory — giving you the flexibility to account and brace for new requirements.

Still, you need to remain mindful of any laws that might have an immediate bearing on your company — whether they be local, statewide, federal, or industry-specific.

Those changes might not always be obvious or make the news, so it’s important that you take strides like connecting with industry peers, subscribing to relevant newsletters, or having an attorney you can reliably contact to stay on top of this side of your business.

The roadblocks entrepreneurs will face this year might be imposing, and in some cases, they might completely stymy business owners’ progress. I mentioned it earlier, but the best policy for anyone taking on these challenges is to remain patient and persistent.

There’s no guarantee you’ll get to the other side of these issues, but you still need to do everything you can to give yourself a shot.

Source article: https://blog.hubspot.com/sales/entrepreneurship-challenges