We have been doing a lot of research to identify the key factors that stop young people from taking the leap into the entrepreneurial pool and starting their own business.
Barriers in the business environment can have a negative impact on entrepreneurs, who generally lack experience and access to professional networks. Some of the socio-cultural aspects that limit young entrepreneurs from living their dream are listed below.
Social and Cultural attitudes
It has been analyzed that there is a lack of positive attitude to entrepreneurship in various economies, where entrepreneurship can be viewed as a viable career choice. The educational system can help cultivate positive attitudes towards youth entrepreneurship and recognition of entrepreneurial expertise. Positive societal attitudes and culture of entrepreneurship are important for stimulating productive youth entrepreneurship and fostering entrepreneurial skills development.
Registration, Licensing and Administrative Procedures
Young entrepreneurs consider cumbersome and lengthy administrative procedures, paperwork etc. as an obstacle to be overcome. Young entrepreneurs often face challenges related to tax & regulations while opening a business and difficulties to obtain business information, particularly for non-traditional sectors. Reliable statistical information is limited, and often data on sector specific performance or projections are rarely available.
Securing loans and access to finance
During the start-up phase, access to finance is identified as a key obstacle for entrepreneurs. Young entrepreneurs who apply for credit from a formal financial institution, during either the start-up or operational phases of their businesses are denied funding, as they do not possess assets to hypothecate or have poorly drafted business plan. Formal lending institutions usually consider younger entrepreneurs risky and exclude them from mainstream loans.
When it comes to day-to-day challenges of company operations, young entrepreneurs remain preoccupied with various issues related to task and time management. Specifically, they are more concerned about finding the right talent, access to customers, increasing sales, and dealing with competition. Lack of confidence, fear, poor planning, inefficient decision making crop in while dealing with operational challenges, thereby limiting the true potential of a venture.