by Megan Darmody
Being a small business owner can be as gratifying as it is challenging and the hurdles that small business owners face are reflected by the success rate of new businesses. Within five years, half of all businesses will fail and only 30 percent of businesses will survive for ten years.
In a recent survey of 1,000 small business owners, Valpak reveals the three hurdles small business owners report facing more than others: Money, knowledge and fear of failure.
Business Funding is the Most Common Challenge. Whether you start a business to gain financial independence, because you want to be your own boss, or you have a passion for a specific field, even the most grassroots business needs an amount of financing to become established and maintain growth. A quarter of respondents say that money is their biggest challenge and Generation Xers between the ages of 45 and 54 felt the strongest. In order to secure money for a new business, many entrepreneurs turn to friends and family with the 2012 Global Entrepreneurship Monitor Report saying they’re the source for 82 percent of funding for new businesses.
Luckily, there are alternative sources for funding. Crowdfunding can be a powerful tool for new business owners to take advantage of. There are also a number of resources available from government sources such as small business grants offered to qualifying startups.
More Women Consider Business Know-How a Challenge
Many small businesses are not founded by people coming from business backgrounds but rather by people turning their passion into their career. This background can cause founders not to feel confident that they have the knowledge to successfully run their own business. This is felt more by women, with 54 percent of women and 45 percent of men stating it was their greatest challenge.
Fortunately, there are resources to turn to for help. There are many small business associations that connect entrepreneurs who want to share ideas and knowledge. Finding a mentor who can guide you and pass on the lessons that they have learned through experience can be invaluable.
Millennials Fear Business Failure the Most
The fear that your business will be a failure is also commonly reported, but most strongly by millennials between 25 and 34 with 31 percent of them identifying it as a challenge. This group may also be weighed down by massive student loan debt and a disproportionately high cost of living compared to previous generations, making the financial stake even higher. Peer groups and mentors can help business owners overcome this fear by offering guidance and helping to navigate challenging periods. Some people take workshops to better understand how to overcome obstacles.
As a business owner, use the fear of failure to improve your business. Reframe your goals to keep growing and keep your business on track. Reflect on what is working and what needs to be changed in order to build a better business. If you’re a small business owner or in management, these challenges may already be on your radar. By networking with local community business groups, finding resources on the internet, or even crowdsourcing solutions to the challenges you face, you will be better equipped to overcome the everyday business challenges.
Photo: Campaign Creators (Unsplash)