Challenges Faced by Entrepreneurs
Traditionally if one asks me what are the three main challenges faced by entrepreneurs in India an experts answer would be: firstly removal of state-imposed barriers for starting businesses; secondly the availability of finances; and thirdly education & nurturing.
First, entrepreneurship is now being encouraged in India by systematic attempts at removal of state-imposed structural and regulatory roadblocks. But it may be still a long road ahead to cut the red tape completely.
Second, there are attempts to make finances available to businesses. In the current banking paradigm, it is easy for an established businessperson to get loans for starting new ventures or expand current businesses. However, a new entrepreneur wishing to start a new business, still finds it very difficult to procure basic funds to set up and run a business till he has sufficient assets for offering as security. Some new age solutions are being attempted in form of collateral free funding for entrepreneurs by SME focussed banks and the new e-ipos for equity investments, where entrepreneurs raise equity without giving away too much stake to foreign investors.
A third form of support is the development of entrepreneurial talent in educational institutions. India’s higher education system generates a large number of graduates every year. However, its economy is not in a position to absorb the graduates passing out, leading to an increase in the educated unemployed. In India, most entrepreneurs (% of small businesses) are single owners, nil employee, and one-person shows with little growth prospects. The so-called entrepreneurs do business mainly for self-employment and are not the “real” entrepreneurs.
In order to catch up with the pace of developed countries, India needs many entrepreneurs willing to make their businesses bigger. If the university students with high entrepreneurial potentials get proper training, they will have the best prospects for becoming “real” entrepreneurs.
I feel, there is another undocumented root challenge, that is, entrepreneurship can develop only in a society in which cultural norms permit variability in the choice of paths of life. Unfortunately, many of us, even today, think that taking up a job is much better than taking a risk and starting a venture. If a job is taken up after college, the person will soon have a comfortable existence. The other scenario could be starting a venture after working for four to five years. This requires a lot of commitment and courage to leave the present job. As time passes by, the risk-taking capacity goes down.
This challenge can be overcome, although slowly, by imparting entrepreneurial education since high school or junior colleges. It will still take a generation to overcome the cultural challenges completely.
A survey done by the Entrepreneurship Development Institute, India (EDII) shows that young people are afraid to start their own business because they are not confident, not capable, and lack knowledge in starting a business. Many people have the opportunity to change jobs or become an entrepreneur if they are properly trained. The students in India are not satisfied with the “hands-on” support of their university in the founding process.
I looked at some other research to analyse current trends. In the recent GEM 2014 Entrepreneurship survey, it is found that around 55-60% of Indians now perceive that entrepreneurship is a good career choice and that it receives sufficient media attention to raise the entrepreneur’s status in society. I was happy reading this, until I read that only 38% of Indians perceive that there are sufficient opportunities for them to jump in and start up. And only 8% participants “intended” to start their own ventures. The research also indicates that the fear of failure among Indians is high, and motivation to start up is lower than many other developing economies.
To conclude: The entrepreneurial training in the higher education system should, therefore, satisfy the need for entrepreneurship by training aspiring entrepreneurs, guiding/mentoring even the existing businessmen, supporting their ventures by providing them with access to funding and by creating a peer community for knowledge sharing. Unfortunately, the present entrepreneurial training in India just concentrates on related management courses & lots required to be done by incubators, accelerators, and meetup groups to make entrepreneurship a mass movement. We have the capability to succeed as entrepreneurs, we will see that happen when we believe it from the bottom of our heart & top of our brains.
Original article was published at : http://www.iamwire.com/2015/07/challenges-faced-entrepreneurs-today/119140