Barriers to Entrepreneurship

  • Post last modified:14 March 2024
  • Reading time:28 mins read
  • Post category:Entrepreneurship
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Barriers to Entrepreneurship


Barriers to entrepreneurship refer to the obstacles, challenges, or constraints that individuals encounter when starting or growing a business. These barriers can vary depending on factors such as location, industry, economic conditions, and personal circumstances. Identifying and understanding these barriers is crucial for aspiring entrepreneurs to overcome them and succeed in their ventures.

Individuals choose entrepreneurship as a job for a variety of reasons, including:

  • The desire to have control over one’s destiny
  • Increased profits
  • A scarcity of job opportunities
  • Government-led initiatives to encourage entrepreneurship

Entrepreneurship offers people a way to earn money and work. This aids in reducing the monopoly of the wealthy businessman and achieving balanced regional and economic growth. The Government of India is implementing a development program to uncover entrepreneurial potential, and financial and non-financial organizations are assisting entrepreneurs. In India, entrepreneurship training colleges have been established, as well as financial and operational assistance for new entrepreneurs.

Every entrepreneur aspires to take their passionate approach and turn it into a successful business that generates increasing earnings and goodwill in the marketplace. However, several obstacles might obstruct success. As a result, there is no way for an entrepreneur to be successful unless they solve or remove these hurdles.

Highlighted Regarding Entrepreneurial Hurdles

The points highlighted regarding entrepreneurial hurdles are listed below.

Environmental Barriers

These barriers include:

  • Non-availability of raw material: During the peak season, raw materials essential for production are unavailable. As a result of the rivalry, the price of raw resources rises.

  • Shortage or unskilled labor: Shortage of skilled labor, dedicated and loyal staff.

  • Breakdown of machinery: Machines are vital, but they are also costly, and as technology advances, they become obsolete and require replacement, which necessitates cash. It is quite tough for a small firm to maintain its production process up to date.

  • Expensive land and structures: Acquiring land and constructing a structure in a prominent location necessitates a significant financial investment. When land is rented, it becomes a fixed expenditure and a source of ongoing worry for the business owner.

  • Infrastructure assistance: Infrastructure assistance includes adequate energy, sufficient roads, water, drainage systems, and so forth. Due to red tape and corruption, development agencies receive limited funding.

Financial Barriers

These barriers include:

  • A lack of financial resources is a serious problem.

  • Short-term or long-term debt

  • A delay in beginning or running a business causes a delay in obtaining financing.

  • Huge financial loss, no gains

Personal Barriers

These are caused by a person’s emotional obstacle. They obstruct one’s thinking. They are as follows:

  • Lack of confidence: They lack confidence since they believe they will never come up with a profitable company concept or be able to acquire the required resources. As a result, they are opposed to working for themselves.

  • Lack of dependence on others: Instead of seeking more growth or personal assistance from others, an entrepreneur prefers to learn extra skills via trial and error and experience.

  • Lack of Motivation: When your thoughts do not work, you lose interest and motivation.

  • Lack of patience: When entrepreneurs are confronted with business challenges/problems for the first time, they have a strong desire to succeed or get wealthy right away, and they lose interest. They quit up at the first setback.

  • Inability to dream: Sometimes entrepreneurs lack vision or are content with what they have accomplished so far, and they lose interest in expanding their firm

Societal Barriers

These barriers include:

  • Values and conventions in society

  • The degree to which entrepreneurial conduct is approved or disapproved

  • Financial security and family history

  • Religious affiliation and caste

Political Barriers

These include:

  • Government incentives and concessions

  • Facilitating socio-economic settings

  • Interest in the economic development of society

Marketing Problems

Almost everyone in the industry faces certain marketing challenges at some point or another. Fortunately, even if you are a tiny business or organization with no marketing team, you can fix all of them.

Here, are five of the most prevalent marketing issues, along with suggestions for how to fix them:

No Clear Strategy

Many organizations have no clear strategy for attaining their marketing objectives. Therefore, an organization needs to make a list of specific marketing goals and create a clear, well-coordinated approach centered on these objectives. To do so, the organization needs to answer the following questions:

  • What is our primary goal as a business or organization? (For example, sell widgets, increase subscription numbers, generate awareness for a cause, and so on.)

  • Who do we want to reach out to?

  • What is the buyer persona?

  • How do we communicate with our target audience? What happened to them? What methods do they use to consume digital media?

Having a defined approach to work with facilitates discussion and promotes suggestions for improving the overall strategy, resulting in more effective goal achievement. It also serves as a guide for team members, allowing them to understand how their roles fit into the overarching strategy. As a result, accountability and the link between sales and marketing are strengthened.

Lack of Time and Resources

Every business owner and manager is likely to believe that they do not have enough time or resources to accomplish their objectives. It is not easy to fix, but it is something you can do. Using a project management system helps you to spend less time and energy on various tasks. It will also make it easier to prioritize chores. Prioritization entails recognizing which chores should be eliminated. Whether you assign them to someone else or simply delete them from your calendar, this applies.

You may complete marketing activities more quickly or delegate them to another team member if you have a clear, efficient approach. If a task is taking up too much of your time, you should re-evaluate it. What could be done to make it more effective? Is this the most efficient use of your time and energy? By answering these questions, you can make your workday more efficient and productive.

No Alignment With Buyer Personas

Identifying customer personas and using that information in your marketing plan is a difficult task. To design a plan that will appeal to customers in a relevant and strong way, you will need a mix of analytical thinking, extensive research, creativity and psychology. Some firms assume they know who their target market is, but not everything in their marketing approach is tailored to that person.

When you use a consumer persona to link to your action, you may avoid making broad generalizations and abstract notions that might not be helpful. Instead, you will be more focused on a genuine person’s wants and desires.

Inability to Adapt to New Trends

It is easy to fall into a routine. You may find it challenging to stay up with the ever-changing business scene if this happens. In marketing, you must be willing to explore and analyze new ideas and methods, so you must have a thirst for new information. Then, start integrating the most relevant trends into your marketing.

If marketing automation will enhance your sales, consider implementing it into your strategy. Keep in mind that not every trend will work for you. If you keep an open mind and do your study, there may be other methods to make the most use of your time and money.

Proving ROI

If you have ever tried to find out how much money your marketing efforts brought in on your own, you know how difficult it is. When seeking to persuade top management of the worth of a project, calculating ROI is also critical. If done right, this will result in more marketing money and a larger pool of resources.

It is critical to complete the loop in your digital marketing reports. To clinch transactions, marketing mainly relies on sales. It is incredibly difficult to determine ROI without the combined strength of marketing and sales reporting. It is critical to not only shut the loop but also calculate the appropriate metrics. Understand what is important to your strategy and your target audience. When you are trying to gain the buy-in you need to adopt new initiatives or secure extra funding, this will come in helpful.

Taking care of these typical marketing issues might have a favorable influence on your company’s overall performance. Your team will become more efficient and productive if you focus on strategy and outcomes.


Measure to Remove Marketing Barriers

Entry and exit barriers are low in contestable marketplaces, resulting in a scenario where both the real and the potential competitive pressures are significant. How can a company overcome some of the conventional hurdles to entry? These hurdles can be overcome through the following ways:

  • Begin with a Minimal Viable Product (MVP) and iterate based on customer input

  • Use a disruptive pricing model and set various goals for yourself

  • Produce exceptional content/products

  • Use an existing brand to enter a new market

  • Reduce the marketing expenditures of recruiting new sales, use viral marketing

  • Purchase a company that is already well-established in a market

  • Cut fixed expenditures, lease rather than buy equipment or shop space

  • Existing businesses must be out-innovated (using high research intensity)

  • Use open-source software rather than proprietary software

  • Adopt manufacturing that is lean and adaptable, as well as supply-on-demand

  • Free-ride on scalable channels, such as Amazon’s marketplace or YouTube’s sales platform

  • Accept that losses will be incurred at the beginning

Barriers to Entrepreneurship Growth

The following is a list of some of the key obstacles that may emerge while beginning or running a new business:

Managing finances

Managing the funds, which may be tough for entrepreneurs, is a significant hurdle that occurs when beginning a new firm. Many ideas occur to entrepreneurs’ brains, but turning such ideas into a firm requires sufficient funding. To keep the production process running well, there should be a reliable and consistent supply of funding. If the first and most important barrier can be easily overcome, then future obstacles can be overcome as well.

Inadequate market experience

One of the most prevalent roadblocks for many entrepreneurs is a lack of understanding in the sector of their business. An entrepreneur must have sufficient industry experience by working in the necessary areas. Instead of rushing into a business based on the success of others, it is necessary to gather sufficient knowledge about market circumstances, the nature of the business firm, the demand and supply of that specific commodity or service, and so on before launching a new endeavor.

Aside from that, if an entrepreneur has sufficient skills, it will assist him or her in achieving job success. Although we all know that there is always some risk in business, the essential set of knowledge helps to mitigate this risk by providing a solid foundation.

Human resource problem

Even if a person has sufficient expertise, he or she will not be able to complete all of the jobs on their own. Similarly, an entrepreneur cannot perform all of the tasks necessary to run a business on his or her own. A company’s human resources or personnel must be highly competent and knowledgeable.

Employees are an organization’s most valuable asset. They contribute to the company’s expansion. Although fixed and current assets of businesses may be comparable, it is the human assets that distinguish the company from its rivals.

However, to reach top-level productivity and efficiency, individuals must have sufficient experience and dedication to the firm. An entrepreneur may have a huge number of applicants who can perform a certain job, but selecting the finest among them is difficult.

Aside from that, the entrepreneur must ensure that the applicants who are applying have a vision that is beneficial to the firm. Because of the restricted availability of cash, managing finance is a monumental undertaking when a new enterprise is launched.

As a result, the entrepreneur should never give a high compensation to an experienced employee at the start. For all of these reasons, it is ideal to eliminate the human resource barrier so that the firm can function smoothly and people can do their tasks effectively.

Non-strategic planning

Inadequate strategy planning may also be a major stumbling block on the road to entrepreneurial success. Many entrepreneurs began their businesses as a pastime and did not have a long-term strategy or plan.

To be a great entrepreneur and to build a strategic vision to reach goals, one must have a strong passion and devotion. A flawless strategy plan is based on the target customers, market circumstances, consumer tastes and preferences, effective use of human, financial, and other resources, and long-term goals, among other factors. For a firm to be successful, all of these factors must be present in the right proportions.

Lack of capacity

Because of their restricted capability, many entrepreneurs are unable to fully utilize their potential. It can be a significant barrier to entrepreneurial success. This stumbling block might be caused by a lack of education, knowledge, or willingness, among other factors. Simply put, a lack of ardor and desire may fail the majority of new initiatives.

Apart from understanding market dangers and competitors, a business requires a lot of hard effort and desire to cope with the many difficulties and conditions that develop within the firm. This is extremely beneficial to the company’s growth and development, as well as its turnover and goodwill.

Political barriers

Politics in a country or area may sometimes be a roadblock to entrepreneurial success. As a result, an entrepreneur should research the government’s policies as well as the incentives available to entrepreneurs. This is because no government provides socioeconomic support to entrepreneurs. Aside from that, it is also necessary to take the pursuit of economic growth seriously.

Some governments grant special protection to fledgling companies to insulate them from market competition and ensure their survival. As a result, before starting a business, an entrepreneur must carefully assess the political issues. It is extremely beneficial to the company’s long-term survival and growth.

Lack of practical knowledge

Many young people feel that for a firm to succeed, an entrepreneur must have a good educational background, but the truth is quite different. The majority of schools and colleges place a greater emphasis on equipping students with theoretical information than practical expertise.

Every entrepreneur may have the same theoretical knowledge, but in this highly competitive market, it is their actual expertise that distinguishes them. Lack of practical expertise can also be a stumbling block in the way of a company’s success. Entrepreneurship is a skill that requires more actual understanding than theoretical information. As a result, before entering the firm, every entrepreneur must have a sufficient practical understanding of the market circumstances and other key factors.

Not having the right team

Individuals do not work in business. It is a collaborative effort in which each individual has various talents and occupations that are based on those skills. As a result, a firm may be considered to be run by the contributions of all individuals. The correct team or colleagues or workers are the most critical factor in a company’s success. Finding competent personnel is one of the most difficult challenges for a start-up.

Most new companies operate on a small scale, making it more difficult for them to recruit experienced, qualified, and capable staff. To address this issue, a business owner should take the necessary steps to assign duties to people who can help the company grow via effective and efficient performance.

Corrupt business problems

The corrupt atmosphere is one of the most typical challenges in business, especially for young businesses. If the country’s climate is corrupt, young employees and entrepreneurs will not be inspired. The unhealthy and non-supportive government in many nations or areas causes a slew of problems.

As a result, it is a good idea to check out the rules and regulations before beginning a new business. The government’s corruption may be a huge roadblock to a company’s growth on a much larger scale. As a result, an entrepreneur must take his or her responsibilities seriously.

Difficulty in reaching more people

Another challenge that an entrepreneur may encounter is reaching out to more people or acquiring new consumers to tell them about the products or services that the company offers. A company’s chances of success might be jeopardized if it is unable to sell its products and reach the target market’s requisite demographic.

Only if there is no barrier between the audience and the specialists can a strong foundation be established. As a result, a solid foundation is required to accomplish the desired outcomes. This challenge may be remedied by creating effective employment that allows for the formation of strong marketing and advertising strategies. This will also aid in disseminating information about the organization and its goods to a huge number of individuals.

Fear of failure

To make a profit, an entrepreneur must take some risk, and the amount of profit that the firm may generate is determined by the entrepreneur’s ability to take risks. As a result, it can be claimed that it is a state of mind that assists an entrepreneur in gaining a clear vision to face danger without fear.

When a new enterprise is launched, however, there is always concern about securing early funding, investors, and a variety of other issues. This dread puts pressure on entrepreneurs’ thoughts and heightens their anxiety about failing.

Few opportunities

When a new firm is launched, the entrepreneur has a relatively limited number of options. It is often difficult for an entrepreneur to recognize these restricted chances early on. A company must start growing to have new prospects. Entrepreneurship might be hampered by a lack of opportunities. Without possibilities, there is a very slim chance of being successful. One of the most important aspects of a SWOT analysis is opportunity.

No training

A trained individual is constantly in high demand in the job market. A corporation is always on the lookout for staff that are well-versed in their field. However, having expertise or training in a certain sector is insufficient for an entrepreneur. He or she must have a whole package of knowledge in all areas. However, this does not imply that the entrepreneur should be a jack of all crafts and a master of none, as this might be a deterrent to beginning a business.

Entrepreneurs will be unable to pick what firm to start if they do not possess excellence in a certain subject. As a result, it can be claimed that an entrepreneur should be taught in all aspects of the business environment while also possessing proficiency in a certain sector.

No backup plan

Before beginning anything new, we must have a backup plan in case our main plan fails, else, we would be in a lot of difficulty. Similarly, when an entrepreneur launches a new business, he or she must be prepared to face failure, and to cope with it, the entrepreneur must have a backup plan or plan B.

However, most entrepreneurs begin their businesses without a backup plan, which may be a roadblock for them because they are constantly in danger of failing. Strategy B is essential not only when a project fails, but also when the entire company plan fails.

Lack of motivation

The biggest motivation for any business is Money. Money helps a business to survive and then grow. Without profit, businesses will not be able to make the market value. No profit and no financial gains can negatively affect the motivation of an entrepreneur.

In such cases, it is a must for the whole organization to have some patience and be motivated to achieve future growth and profit.

Article Source
  • Worthington, L. (2021). Entrepreneur. [S.l.]: Bloodhound Books.

  • Lambing, P., & Kuehl, C. (2014). Entrepreneurship. Harlow: Pearson.


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