The Challenges, Obstacles and Barriers to Start-ups amongst the Young Entrepreneurs in the 21st Century Enterprise - Essay Example

? The Challenges, Obstacles and Barriers to Start-ups amongst the Young Entrepreneurs in the 21st Century Enterprise ID NumberCourse Title & Code Instructor’s Name Date Total Number of Words: 2,006 Introduction Throughout the United Kingdom, the population of older people is continuously growing (Department for Business Innovation & Skills, 2011). As compared to the young entrepreneurs, the chance of establishing a successful business is much higher on the part of the ageing people (The Enterprise Report 2005, p. 8; Lorrain and Raymond, 1991). Even though the young entrepreneurs have so much energy as compared to the old entrepreneurs, most of the young entrepreneurs have problems when it comes to their knowledge and skills in starting and managing a business, the consequences of having psychological and emotional immaturity, and risk aversion primarily due to age factor (Muffatto and Giacon, 2012, p. 685; Lorrain and Raymond, 1991). Therefore, to ensure that the young and older people will have equal business opportunity in UK, it is necessary to examine the challenges, obstacles and barriers of young entrepreneurs of the 21st century enterprise. Based on the framework that was presented by Lewis and Massey (2003, p. 10), the long-term economic success of United Kingdom is highly dependent on the level of young people’s readiness and intention. However, the gap between the young and old entrepreneurs differs greatly not only in terms of their real-life experiences when it comes to managing a business but also in having a better chance of getting bank loans for their start-up capital (Muffatto and Giacon, 2012, p. 685). (See Figure I – Diagnostic Framework for Young Entrepreneurs on page 3) Figure I – Diagnostic Framework for Young Entrepreneurs Source: Lewis and Massey, 2003, p. 10 In most cases, the process of identifying and learning more about the challenges, obstacles and barriers that can impede the potential of young entrepreneurs in starting-up a business can be considered as the first step towards narrowing the gap between the old and young entrepreneurs. Therefore, by learning more about the weaknesses of the young entrepreneurs, the UK government together with the community members and the local universities can play a significant role in empowering the young entrepreneurs through self- awareness (Lorrain and Laferte, 2006). The young entrepreneurs are enterprising people below the age of 35 (Kelley, Singer and Herrington, 2011; Lorrain and Laferte, 2006). According to Blundel and Lockett (2011, p. 5), entrepreneurs are “those person who seek to generate value through the creation or expansion of economic activity, by identifying and exploiting new prodcts, processes, or markets”. On the other hand, social enterprises are “organizations seeking business solutions to social problems” (Thompson & Doherty, 2006). As part of identifying and examining the challenges, obstacles and barriers that most of the young entrepreneurs in the 21st century enterprise are experiencing when starting-up a business, this study will purposely examine the situation of the young entrepreneurs in a public, private, and not-for-profit organization. In support of the main discussion, examples will be considered in determining how the young entrepreneurs can overcome these obstacles. Challenges, Obstacles and Barriers of the 21st Century Enterprise that are Affecting the Young Entrepreneurs A lot of past and current literature tackles the issue with regards to the challenges, obstacles and barriers that can hinder young entrepreneurs from setting up their own business. Based on the research study that was conducted by Lorrain and Raymond (1991), “one of the major problems encountered by the young entrepreneur is the lack of credibility given by the business and government representatives, on account of their young age”. Furthermore, support that young entrepreneurs will receive from their friends, family members, and the community as a whole can also affect the professional credibility of the young entrepreneurs (Muffatto and Giacon, 2012, p. 685; Lowe and Marriott, 2006, p. 14). As explained by Muffatto and Giacon (2012, p. 685), most of the young entrepreneurs who are first-timers in establishing a business do not have sufficient personal assets, business knowledge and skills, business network, and personal confidence needed in setting up a business. Specifically the lack of entrepreneurial knowledge and skills and attitude such as flexibility, innovation, and creativity can lead to a significant decrease in terms of their self-confidence whereas low levels of self-confidence and insufficient entrepreneurial knowledge and skills amongst the young entrepreneurs makes most of the local banks hesitant in terms of awarding them with micro loans (Rahmawati, Hasyyati and Yusran, 2012; Lowe and Marriott, 2006, p. 18). Therefore, even though there are some young entrepreneurs who are very much successful today, most of the financial creditors prefer not to take risks on young entrepreneurs. During the budding entrepreneurial stage, difficulty in winning the financial support of the local banks and other creditors is a serious problem (Rahmawati, Hasyyati and Yusran, 2012; Muffatto and Giacon, 2012, p. 685). Without having an access to start-up capital, the young entrepreneurs will not be able to set up their own business plan. This particular barrier equally apply to young entrepreneurs who have promising business ideas but are seriously in need of a start-up capital. The same barriers apply when it comes to establishing a network of accredited suppliers and winning the trust of the customers (Rahmawati, Hasyyati and Yusran, 2012; Lorrain and Raymond, 1991). Since most of the young entrepreneurs have difficulty in terms of establishing their professional credibility and securing micro loans from the local banks and other creditors, most of the young entrepreneurs are unable to win the support of their potential suppliers. (See Table I – Summary of Challenges, Obstacles, and Barriers of the 21st Century Enterprise that are Affecting the Young Entrepreneurs on page 6) Table I – Summary of Challenges, Obstacles, and Barriers of the 21st Century Enterprise that are Affecting the Young Entrepreneurs Lack of credibility Lack of experience and knowledge Lack of network and contacts Lack of access to start-up fund Ways in which the Young Entrepreneurs could Overcome these Obstacles A lot of private, public, and non-for-profit organizations are working together in order to remove the barriers and obstacles that makes young entrepreneurs unable to succeed in the field of entreprises (i.e. Prince’s Trust, Shell LiveWIRE, the National Consortium of University Entrepreneurs (NACUE), the National Council for Graduate Entrepreneurship (NCGE) now known as teh National Centre for Entrepreneurship in Education (NCEE), Enterprise UK, the School for Social Entrepreneurs (SSE), and the Global Entrepreneurship Monitor (GEM) among others). In line with this, strategic ways that can make the young entrepreneurs overcome these obstacles include having better opportunities to enter new business venture, continuous improvements in their knowledge and skills through trainings, further studies, and providing them with access to emotional and financial support and advices (Muffatto and Giacon, 2012, p. 685; Blundel and Lockett, 2011, p. 211; Farvaque and Voss, 2009; HLMR, 2006; The Enterprise Report 2005). As a common knowledge, access to entrepreneurship education and training affects not only the young people’s knowledge and skills but also their self-confidence in starting a business. Specifically the Enterprise UK is another non-for-profit organization that aims to “promote positive attitudes towards entrepreneurship and help increase the young people’s entrepreuenrial skills and confidence by facilitating access to international networks and knowledge” (Enterprise UK, 2012). Therefore, to help the young entrepreneurs increase their self-confidence, non-for-profit organization such as the case of Prince’s Trust and Enterprise UK are continuously raising funds to financial support to education of young individuals who could not afford to pay the school fees (Prince's Trust, 2012a; Enterprise UK, 2012). Private organizations like NACUE also support the growth potential of young entrepreneurs by closely working with a total of 135 colleges and universities throughout the United Kingdom (NACUE, 2012a). The SSE support individuals who wish to set-up new charity organizations, social enterprises and social businesses through training opportunities (SSE, 2012) whereas the NCEE offers tertiary education which aims to develop our future leaders in the field of enterprises. Instead of pushing the graduates to join the UK workforce, the NCEE strongly directs its graduates to set-up their own business and become self-employed (NCEE, 2012). Education can give the young entrepreneurs a good academic and analytical skills (The Enterprise Report 2005). By enhancing the knowledge and skills of the young entrepreneurs, this group of promising individuals can have more confident when entering into a negotiation process not only with the bank but also with some potential suppliers and prospective clients. Eventually, the process of increasing their knowledge through education, the young enrepreneurs can increase not only their credibility but also their access to funds needed in start-up business. Extending business support and financial assistance also strengthens the ability of the young peopel to start-up their preferred business. For instance, the Prince’s Trust and Shell LiveWire are encouraging the young people to start-up their own business by granting them financial support (Prince's Trust, 2012b; Shell LiveWIRE, 2012). Aside from awarding some cash prices to young entrepreneurs between the age of 16 to 30 years old, Shell LiveWIRE programme is publicly offering “free online business advices” throughout England, Scotland, Wales, and Northern Ireland (Shell LiveWIRE, 2012). NACUE is using a more realistic approach in extending financial assistance to people who wishes to start-up their business. Instead of giving free start-up cash to our future young entrepreneurs, NACUE is offering start-up loans to interested individuals (NACUE, 2012b). Other factors that can equally help the young entrepreneurs overcome these challenges include: receiving strong support coming from their family members, relatives, and friends, promoting the important role of young entrepreneurs within our society, and increasing people’s knowledge and awareness with regards to the concept of entrepreneurship (Muffatto and Giacon, 2012, p. 685; Lowe and Marriott, 2006, p. 14; Schoof, 2006, pp. 26 – 30). Basically, the process of educating the people with regards to the role of young entrepreneurs within our society is important in terms of encouraging more creditors like the banks to extend some financial support to young individuals. Furthermore, the process of continuously promoting entrepreneurial culture among the young people is essential in terms of indirectly helping the young people to uplift their self-confidence and desire to become one of the most promising entrepreneurs someday (Schoof, 2006, pp. 26 – 30). By doing so, the young entrepreneurs could feel that they are readily accepted within our society. Knowing that there are people within our society who are willing to support the challenges of the young entrepreneurs during the 21st century is more than enough to boost their self-confidence. (See Figure II – Factors that can Help the Young Entrepreneurs Overcome these Obstacles on page 9) Figure II – Factors that can Help the Young Entrepreneurs Overcome these Obstacles Source: Schoof, 2006, p. 23 Conclusion Most of the young entrepreneurs who are first-timers in setting-up a business do not have sufficient personal assets, business knowledge and skills, business network, and personal confidence needed in setting up a business. Specifically the lack of entrepreneurial knowledge and skills and attitude such as flexibility, innovation, and creativity can lead to a significant decrease in terms of their self-confidence whereas low levels of self-confidence and insufficient entrepreneurial knowledge and skills amongst the young entrepreneurs makes most of the local banks hesitant in terms of awarding them with micro loans The presence of more young entrepreneurs is the key behind the success of the UK economy. By encouraging more young people to be involve in starting a business, the entire nation will be able to experience a lower unemployment rate. To remove the barriers and obstacles that makes young entrepreneurs unable to start-up a business, a lot of private, public, and not-for-profit organizations are extending some financial, entrepreneurial education and training, and emotional support and guidance to young people as a way of empowering them to become successful young entrepreneurs. The common denominator behind the challenges, obstacles and barriers that can impede the growth potential of young entrepreneurs is the lack of credibility due to financial limitations and insufficient knowledge and skills in starting-up and operating a business. By enhancing the knowledge and skills of the young entrepreneurs, this group of promising individuals can have more confident when entering into a negotiation process not only with the bank but also with some potential suppliers and prospective clients. Eventually, the process of increasing their knowledge through education, the young enrepreneurs can increase not only their credibility but also their access to funds needed in start-up business. Through learning empowerment and financial support, the young people across the United Kingdom will come closer to having a better opportunity in entering a new busienss venture. All these interventions are necessary in terms of making the young people feel more confident about practicing their entrepreneurial knowledge and skills. References Blundel, R. and Lockett, N. (2011). Exploring Entrepreneurship, Practices and Perspectives. 1st Edition. NY: Oxford Press. Department for Business Innovation & Skills. (2011, May). 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