2. FACTORS AND CHALLENGES TO CONSIDER BY YOUTH ENTREPRENEURS
2.1 Getting to Know the Factors and Challenges
Being an entrepreneur has required us to have skills, passions, focus and as well as a better sense of time management. Without these components, we are not offering the market anything that will be valued. No matter how skilled or intuitive you are, mistakes will always happen, especially when you are just getting started. For the new entrepreneurs or we called as young entrepreneurs, there are some unique challenges that are particularly difficult to overcome. Though the potential rewards are great, as a young entrepreneur, starting a new business at youthful age is followed with multiple risk and challenges in their way up. However, your place in the business world depends on how you navigate the obstacles that comes into your ways. Even the experienced entrepreneurs must deal with the obstacles no matter how long they have been in the business. Whether they trying to innovate their brands, to match or exceed the competition and keep their business profitable. It is a challenge to everyone, no matter what kind of business are you in or how many years you have been in the business. In this report, here are the key issues that will be discussed which are including; Lack of experience and self-confidence, inadequate financial resources, age stereotypes, social rejection, even facing a criticism that are considered as the factors that should be considered by the youth entrepreneurs.
2.1.1 Financial Resources
Finance is the blood of any business, it is very difficult to establish and run any business without it. Various workshop of young entrepreneurs has shown that more than 50 percent of their problems relate to the insufficiency of start-up capital. An access to the financial resources is one of the challenges that all entrepreneur will came cross. The older business owners have the advantages in term of financial resources because they have already experienced in that field, they have the knowledge of the cash flow management, a connection or network within the business world, which are their financial resources. However, most of young entrepreneurs they do not have these advantages. In addition, they might be still paying off their student loans and let alone their necessities. As a new comer, they did not have developed any network yet, so it may be more difficult to look for some investors. Looking for accumulated capital, and obtaining the support from bankers, managing the working capital are very difficult. Searching for accumulated capital is highlighted as the most difficult challenges for the young people to get through, due to relatively lower securities such as they do not have any collateral or guarantee that they can offer, as well as lack of credibility as a result of limited experiences. This is could relate to the argument made by Schoof (2006) that “Young people are not short on passion or guts, they are short on cash.”
2.1.2 Criticism and Social Cultural Rejection
As a young entrepreneur, you might be having a lot criticism from another people. They will hurriedly tell you that you are too young to start any business. Some of them might criticize your ideas, evaluate all your business decisions, and they think all of your doing is wrong. The others will criticize you personally, say all of things that might be discouraging you to take another step. They feel jealous and threatened by your appearance in the business, which they are projecting their insecurities towards criticism that they throw at you. Here, your self-doubt will be arisen. Later, you will find yourself in dilemma. You cannot think or making any decisions rationally.
As for social cultural factors it is have a significant role on an individual approach to life. Culture is defined as a set of attitudes, beliefs and value within the society which can make an enormous impact to both enterprising behavior and perception of people towards you. The social cultural attitude influences the entrepreneurial activities of gender, age, ethnic group, and etc. For older people they might accusing you as a young person that are not ready to create their own business. They stereotype that youngsters are irresponsible and lazy, they might doubt your ability to pursue your own business.
2.1.3 Hiring Employees for The First Time
Most of the young entrepreneurs does not have any experience in hiring some employees before. This is the step where they test their skills to finding, identifying, recruiting, and training the right people to become their team players. It is hard to be the boss, and it is harder when you are the owner of the business which your life is at stakes. The process of hiring employees starts from having the knowledge of the legal systems of labor, it is including the working hours, overtime pay, vacation times and other things. Next step, we need to find someone that match with the requirements such as having a good attitude, skills and abilities that match the task that will be given, for example, an accountant, a marketing representative, a technician. Lastly, it is the part of an owner to create a great company culture that will attract the right people for the right job. This relates to the argument made by Ohlhoff (2008) that hiring and retaining competent employees in this competitive globalized labor market is a key obstacle for entrepreneurs.
2.1.4 Brand Image and Customers
To attract and retain customers, any business should have their marketing strategies. Customers feel more confident in spending their money if they deal with companies or product that have a strong brand image. As a young entrepreneur, build a brand image is a vital thing to do. We must give a faith to our customer to trust our brand. That way we can gain their loyalty. For the marketing strategy that will attract more customers, make sure that we put our customers first, offering them with an excellent products and services that makes you different from another competitors.
Lastly, this is the factor that mostly many young entrepreneurs fail to make. These factors will bring a stressful experience and self-doubt in the process. Most of new entrepreneurs will experience decision fatigue if they are not prepared for the new level of stress. Owning a business requires you to make a decision, for young entrepreneurs they are forced to make a thousand decision involving from day to day decisions, from the smallest to major decisions that would change the output and the future of your own business. The most crucial decisions are involving the creativity and ideas for your business. If there is some aspect that stopped your business from growing, you are needed to decide, whether to discontinue things or go for it.
3. CONCLUSION & RECOMMENDATION
This report indicated that youth entrepreneurship ……
The following recommendations are provided to counter the major factor and challenges that faced by youth entrepreneurs.
• Since lack of financial resources is the major obstacle that faced by the youth entrepreneurs, we recommend avoiding this situation by writing a detailed business plan that will give them the idea how much money that will be needed in starting up a new venture and to start networking and thinking through all options that possible before choosing on one. Make sure to prepare that there always a worst-case scenario and they should have a realistic expectation, do not assume that they will make a profit right away after started their business. As they have an excellent business plan, it will help them to approach bank and lenders much more easily. Also, the government itself should make things easier for youth entrepreneurs to go to the banking procedures and loans, and by giving them support in their business development including support in expansion in their capital.
• As a young entrepreneur, many people will think that you are not capable doing the business. At times, criticism and self-doubt might haunting you. As your business is in struggles to develop, you will be facing self-doubt. You might start to think to give up on your business. At time like this, you should not take every critic to your heart, you should have taught yourself that the criticism that they throw at you are motivating you to be a successful young entrepreneur. Moreover, if you faced with social cultural stereotypes which they think young people are lazy and irresponsible, do not let them get to you. Act professionally and treat others fairly in any times. With this kind of attitude that you implement in yourself will bring your reputation for maturity and considered as worthy of trust and respect from the others.
• If you are starting your business in remote area which is, you will be facing the difficulties to hire the employees because top talent is migrating to the major cities that might provide better opportunities for them. However, we recommend you employ the employees by using the remote work policy. You can hire workers from a different city, state, or even country. After you decided to hire workers remotely, now your job is to find the right talent that fit for the job positions. To get the rightful talent, you need to be specific in the ads that you post. The last step is you have to choose workers that can fit well in you company culture. Take a lot consideration when selecting each applicant, do not get blindsided with any talks going around.
• To build an excellent brand image requires you as young entrepreneur to understanding what your customers wants. As you build your brand, make sure to put your customers first, take all their complaints and comments seriously, and do your best to respond them well. Always remember that satisfied customers are the one that bring all the money to you.
• If you can make your way past these major obstacle, it means that you are in way establishing yourself as an entrepreneur. Making decisions from small to major decisions that can affect your business are hard things to do. We recommend to all young entrepreneurs to always think rationally when they are facing with difficult decisions. Always think about the customers, people that are working for you, your supportive people and do not forget about yourself too.
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