We live in turbulent times, which makes starting a business in 2022 far from smooth sailing. That’s because modern entrepreneurs face untold challenges, from dealing with the effects of the pandemic to the ongoing European crisis.
The business world is also ultra-competitive, meaning there will always be someone to fight for you for the first spot. But what separates successful entrepreneurs from ordinary ones is that they relish the opportunity.
However, that doesn’t mean you shouldn’t familiarize yourself with the toughest challenges of the modern entrepreneurial world. To hopefully make your ride smoother, we will explain these challenges so you can better prepare.
With all that said, let’s start.
4 Challenges Facing Modern Entrepreneurs
The internet gives access to untold resources. We can use the internet to research all parts of business in hopes of mitigating risks. But we can also convey information through the internet. Therefore, every hopeful entrepreneur should familiarize themselves with these challenges. Let’s see what they are.
Skill Shortage Issues
If you want to become a CEO, this first challenge relates to you. Namely, modern entrepreneurs must possess a set of skills considered necessary to ensure the success of their business. While we could spend endless hours discussing these skills, what everyone must remember is that an unskilled CEO won’t make it far.
Prospective entrepreneurs must identify the key skills necessary to guarantee success. These skills are vital for success, from business communication skills to building strong self-confidence. Therefore, you must fill the skill shortage gap before you launch your business. Here are a few things to do:
- Master the essential skills
- Understand the potential of technology
- Collaborate with others
- Incorporate a growth mindset
- Focus on yourself
Only that can guarantee success and minimize risk, as going unprepared is never a good strategy.
Supply Chain Issues
From start to finish, every business uses raw materials to produce a finished product. However, explaining modern supply chain is far from an easy task. For example, businesses rely on other businesses to source raw materials, refine and deliver those materials, and produce a finished product.
There could be dozens, if not hundreds of actors between the start and finish process. So businesses rely on others to keep their supply chains untacked. Unfortunately, achieving total supply chain resilience is far from true. So modern entrepreneurs must find ways to optimize supply chains.
They can do this in a few ways. In addition, modern entrepreneurs must be clever enough to find ways to cope with supply chain difficulties, such as demand surges or shipping issues.
Some of the things modern entrepreneurs can do to mitigate supply chain issues are:
- Keep stockpiles of materials and supplies
- Diversifying your supply network to incorporate multiple manufacturers
- Use technology to predict supply and demand (risky as no model is flawless)
Recruitment Issues
Despite our best efforts, finding the perfect employee is anything but easy. Every entrepreneur dreams of it, but the employee hiring process is universally dreaded by employers.
That’s because of all the tiny steps between the start and finish processes. Not only that but hiring employees is very time-consuming. Nonetheless, it is a challenge we must discuss. So how can modern entrepreneurs solve the recruitment issue and streamline the process? One thing employers do is hire recruiters.
If you can afford to hire recruiters to review resumes and conduct interviews, you’re one step closer to solving the issue. But considering not everyone has the budget to hire a person solely for this task, the responsibility falls on our shoulders most often than not.
So when the latter is true, here is what modern entrepreneurs should do to solve recruitment issues:
- Make the job offer more attractive but difficult to qualify
- Be more strategic – find gaps in your organization and look to fill them
- Hire internally
- Use software to streamline the process
Employee Retention
By far, one of the biggest challenges modern entrepreneurs face is employee retention. CEOs will tell you that employee loyalty doesn’t exist anymore. While saying that is certainly a stretch, some industries have uniquely low employee retention numbers, such as IT. In this particular industry, there will always be someone to take an employee if you don’t give them the desired paycheck.
But saying the bosses are the issue doesn’t paint the full picture. To increase employee retention, you have to treat people with respect. Fortunately, this is one of the challenges that you can and should do something about it. If you don’t want to lose your employees, ask yourself if you’re treating them the right way.
By no means, are we saying you should cave into their demands, but you must find ways to keep talented employees on the books. Here are a few rules to help you retain employees:
- Pay employees a good wage
- Encourage employees to speak their minds
- Be respectful
- Endorse a feedback culture
- Be flexible
- Invest in your most high-performing employees
We can apply these to almost any sphere. So if you want to keep your employees and prevent others from poaching them under your nose, make sure to follow these rules.
Conclusion
Modern entrepreneurs face untold challenges that directly compromise businesses. While some are out of our hands, others aren’t. It’s no good focusing on the things that we can do nothing about. But it’s crucial for modern entrepreneurs to find ways to solve these problems to mitigate risk.
We hope this short guide explains these challenges and gives you ideas on ways to solve them.
Author Bio
Erik Bergman co-founded Catena Media and helped grow it to over 300 employees and a $200 million valuation before stepping away to start Great.com, an iGaming organization that donates 100% of its profits to environmental charities. In addition to running a successful online affiliate business, Erik also hosts the Becoming Great podcast, shares entrepreneurship tips with his more than 1 million social media followers, and contributes to sites like Entrepreneuer.com, Business Insider, Foundr, and Forbes.
