Challenges and Actions for Success in Starting a New Business Venture

ENTREPRENEURSIP 1
CHALLENGES WHEN STARTING A NEW BUSINESS VENTURE AND ACTIONS
TAKEN TO MAXIMIZE SUCCESS IN NEW START-UPS
By
Professor
Name of the University
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ENTREPRENEURSIP 2
A business venture, also considered as a small business, can be defined as an entity which
is developed with the intention of making financial profits (Scarborough, 2016). The venture is
usually developed basing on the market demand of a lacking product or one with insufficient
supply. Usually, entrepreneurs’ base on consumer needs when coming up with a business idea,
marketing it and selling the product developed to satisfy consumers’ needs. But truth be told, the
whole process from idea development to stabilization is full of challenges that the entrepreneur
will encounter in their quest to make the idea a success. In as much as there are many challenges
involved in starting a new business venture, there are actions an entrepreneur is supposed to take
in ensuring success of the start-up process. These challenges include problem of obtaining the
necessary finances, lack of knowledge and skills required to run the venture, barriers associated
with entry into a business, problem of time management, lack of balance between the business
and personal life of the entrepreneur, problem of enduring all the difficulties associated with a
new venture, investing in an idea which is not viable, fear of failure, problem of determining
where to start the business and unfavorable government regulations. These challenges are
discussed extensively as shown below;
Problems in obtaining the necessary finance. As usual, financial institutions are always
willing to lend finances to established business ventures since they can be sure that there will be
no default in payment of the finances by the business ventures. When it comes to new
entrepreneurs, it is difficult for one to find a financial institution willing to lend them the
required finances since they are not even sure whether the venture will be viable or not. This
means one will have to look for alternative sources of finance like borrowing from friends and
relatives or use of personal savings which sometimes are never enough to take an entrepreneur
through the difficulties associated with new ventures.
Lack of knowledge and skills in all areas associated with the venture. Running a business
venture involves doing a lot of things which requires expertise in doing them for the business to
be a success (Charles, Schmidheiny, & Watts, 2017). Unless one is an expert in all these areas or
is dealing with people who give him the necessary support then one will be required to learn a lot
of things in a short period of time so that the knowledge obtained can be applied in running the
venture. Many entrepreneurs start business ventures without the required knowledge and skills
needed in all aspects associated with the venture. Lack of experience in carrying out core
activities associated with the business gives a lot of problems to new entrepreneurs.
Barriers associated with entry into a business. There is no particular business venture
which is not associated with barriers that restrict entry. This may mean some ventures being
complex for one to start and run them, ventures being capital-intensive and stiff competition
from established ventures offering the same products. There may exist structural barriers such as
large amounts of capital associated with the start of a new venture; this protect established
ventures which makes it difficult for new entrants to thrive. Strategic entry barriers also limit the
chances of new entrants entering the market since it is difficult for a new business to compete
with differentiated products offered by firms enjoying cost advantages.
Problem of time management. A new entrepreneur will have the enthusiasm of doing
everything associated with the venture by themselves (Cardon, & Kirk, 2015). Most of the times,

ENTREPRENEURSIP 3
all the things done by the entrepreneurs do not necessarily mean the business will grow at the
end. When planning to start a new business, a good entrepreneur should decide which tasks they
should carry out and which ones require hiring of employees to perform them. This, in turn,
gives the entrepreneur the necessary time required in focusing on important business activities
that will make the business grow. Time is considered to be very crucial in entrepreneurship
(Tehseen, & Ramayah, 2015).
A lack of balance between the business and personal life of the entrepreneur. Sometimes
an entrepreneur may be so focused on ensuring the business succeeds thus neglecting other
important aspects of their life. This may lead to stress and a lack of exercise may lead to health
problems. Personal relationships may also be neglected. An entrepreneur needs to have a time
schedule that ensures there is a balance between all aspects of their life (Hsu et al. 2016).
Problem of enduring all the difficulties associated with starting a new venture. Starting
and sustaining a business venture involves lots of ups & downs. One does not only need the huge
financial resources required to sustain the venture but also needs emotional perseverance just in
case things are not going the right way (Bocken, 2015).
Coming up with an idea that is not viable. Sometimes an entrepreneur can rush into
business without pondering over the idea to see whether it can turn into a bigger business or not.
Normally, such ideas do not go far without failing. An entrepreneur should ensure that he/she
involves other people in determining whether the venture can actually turn into a bigger venture
or not. This can help in avoiding start-ups that will end up failing in the near future.
Uncertainties when it comes to where to start the business. Location of a business is one
of the key factors for its success. Sometimes an entrepreneur can come up with a potentially
viable idea but the problem now becomes where exactly to set up the business.
Fear of failure. Fear of not succeeding is the biggest challenge that strikes an
entrepreneur before starting a business (Morgan, & Sisak, 2016). Entrepreneurs are considered to
be risk takers but that does not mean they don’t fear to fail. Venturing into a new business is full
of uncertainties. One can never be sure of the returns from the venture. It is this uncertainty that
make entrepreneurs have that fear of hesitating to invest.
Unfavorable government regulations. There may exist some unfavorable government
restrictions in certain regions such as high taxation, quotas, and limits on the number of licenses
given to potential entrepreneurs which are of great effect to new starters. If the restrictions are so
tough, it might be difficult for new starters to venture into business.
The following actions can be taken by entrepreneurs to counter the above challenges and
ensure continuity and success of a new business venture (Hair et al. 2015);
Establishment of enough cash resources. An entrepreneur should ensure that they have
enough capital to start and run the business they are willing to venture in. New start-ups
normally take some considerable time before they can pick up. An entrepreneur has to ensure