Challenges for young entrepreneurs and how to overcome them

Starting a new business can be as exciting as it is daunting, with plenty of new opportunities to explore, obstacles to overcome, and skills to master.

As a young entrepreneur, knowing what you’re getting yourself into when you start a business is essential.

You might be met with resistance from those who think you lack the experience to become your own boss, but plenty of young people have already succeeded in starting a business.

A GoDaddy study found that the percentage of UK-based start-up owners aged under 35 has more than doubled since March 2020, and they now represent 34% of all start-ups.

Meanwhile, people aged 18–24 make up almost 9% of the UK start-up industry.

Here are some of the most common challenges young entrepreneurs face and our tips on overcoming them.

Skills gap

As a new business owner, you can typically work alone and be responsible for every aspect of your start-up – from financial planning and regulatory compliance, to marketing and sales strategies.

You may be highly knowledgeable in your chosen field and have an eye for business, but there can be some areas that you may be unfamiliar with.

As your business grows, you might hire experts in those fields or pay freelancers to manage specific projects, but when you’re starting out, it’s unlikely that you’ll have the resources for this.

To overcome these skills gaps, you can seek advice by networking with other entrepreneurs at industry events. You might also consider training courses to brush up on your business skills.

This is where Start Up Loans can help; we’ve partnered with The Open University to provide entrepreneurs with the skills they need to succeed in business.

Get started with our Learn with Start Up Loans courses.

Lack of funding

Like all new business owners, young entrepreneurs can need funding to get their project off the ground.

Unless you have savings or are receiving support from family, you may need to acquire capital – which usually means securing a business loan or other type of commercial funding.

This could be tricky without a consistent credit history, collateral, or financial assets. It can be a good idea to explore alternative funding options, such as crowdfunding, grants, or angel investment.

You can also apply for a Start Up Loan, a government-backed scheme that helps people start or grow a business in the UK.

Unlike traditional business loans, there’s no need to put forward any assets or guarantors to support an application.

You’ll also receive support and mentoring to help you make the most of your funding. Find out how you can apply for funding through Start Up Loans.

Creating a business plan

A business plan is an essential part of any successful start-up, but as a young entrepreneur, you might need help writing one.

The document outlines what your business does, its objectives, and how it intends to fill a gap in the market.

This information can help you prove to lenders that you’ve thoroughly considered your business idea as part of funding applications, such as a business loan.

Business plans also provide a roadmap for success, which you can refer back to and amend as you grow your business.

You can learn how to write a business plan with our free guide.

Finding customers

New businesses can have more difficulty attracting customers than established and trusted brands.

With a limited marketing budget to promote your company and few industry connections to provide recommendations, you might need to get creative.

One of the most effective methods to build your business on a budget is through social media.

There are countless ways to do this, from creating a Facebook page and encouraging customers to share their experiences to producing videos on Instagram to entertain and educate potential customers.

You might also consider engaging in grassroots marketing efforts, fostering partnerships with local businesses, or working with influencers to extend your reach.

Creating a work-life balance

Starting a business can take enormous amounts of time and energy, but it’s important not to neglect other parts of your life.

You might feel as though you can’t afford to take the time away from your start-up to have an evening out with friends or simply relax and unwind.

But without a healthy work-life balance, your physical and mental health could be affected – and you might even suffer burnout.

Any new business owner should realise that their start-up is a big part of their life but not the only factor – there also needs to be time for personal activities, socialising, and relaxation.

Self-doubt

If you’re starting a business, you might be confident in your ability to overcome any challenges that come your way, but doubt can creep into even the most accomplished entrepreneurs.

Even with a solid idea, a business plan, and funding, there may be times when you question yourself or wonder what to do next.

These are common fears, with an Axa Health study finding that a quarter of all business owners suffer from imposter syndrome – a persistent feeling that you don’t deserve the success you’ve achieved.

Of those people, 38% said they second-guess every decision they make.

One way to overcome self-doubt is to recognise how common it is among high-performing individuals.

You might seek guidance from mentors and peers, who can provide valuable insights and boost your confidence.