Each year, millions of people have the same goal: to start a business. But we have all heard the stats before about how hard it is to start a business. So many people start with the same goal yet wind up failing within the first year of operation.
But why is that the case? What makes starting a business so difficult? Here are some of the key reasons that getting off the ground as a new business is so tough.
Technology Evolution
While that may sound like the opposite, the evolution of technology has actually made it tougher to be successful as a new business. Yes, business costs are down since the year 2000, but that is only part of the game.
The explosion of innovative technology has put pressure on businesses from a market transparency, pricing, and competition standpoint. As difficult as it has traditionally been, technology has made it even tougher.
More Challenging to Raise Capital
Despite there being more sources of potential investment available, the challenges of raising the right amount of capital are higher than they have ever been.
That is because investors now have a much lower risk tolerance than they ever have before. Market dynamics are simply not as predictable as they used to be and investors have a need to be as close to the pulse of the market as they can be.
It Takes More Skills
Being a successful entrepreneur is difficult to say the least. Even talented entrepreneurs need to be flexible and prepared to see where challenges are within their business and adapt by developing the necessary skills.
That leads to a few paths. Either truly versatile, successful business people who can handle those paths or one who can delegate properly. Of course, those who don’t fall into either path wind up being in the failed column. The margin for error really is razor thin these days, making it more difficult than ever before to get a business off the ground and become a successful entrepreneur.