With unprecedented disruption, running a business has never been more challenging. Each day brings more news that must be factored into the day-to-day life of an enterprise. And for entrepreneurs already pushing hard to build a new business and find a foothold, they can be incredibly daunting.
As 2023 revs up to full speed, here are a few challenges expected this year:
Access to Capital
High interest rates mean that even those who can secure short or long-term business loans will pay more to service them. Investment dollars are also tightening in some fields. These barriers make it harder for entrepreneurs to secure funding to start or grow their businesses. Extended spells without access to capital can force them to delay plans, seek more dilutive capital like crowdfunding, or perform the long slog of bootstrapping. Some may cancel plans altogether.
Increased Competition
Many people start businesses in tight times or a downturn, so there may be more competition for limited resources, customers, and market share. This competition makes it harder for startups to gain traction and differentiate themselves from competitors.
Labor Shortages
There is an acute need for more skilled workers in many industries. This gap is especially true for advanced manufacturing, where technical skills are as highly prized as manual labor to run and troubleshoot advanced systems like IIoT technology. Entrepreneurs may need help finding the workers required to build teams and grow. This tightness of labor drives up labor costs which could threaten the ability of the smallest companies to compete.
Regulatory Changes
Every industry has regulatory requirements. In many countries, significantly tighter regulation in food and beverage, pharmaceuticals, aerospace, and medical can be burdensome. Entrepreneurs need to stay informed of changes that affect their industries, like tax laws, labor regulations, and environmental regulations.
Securing Your Supply Chain
With tariffs, trade wars, global economic unrest, and a high degree of disruption, supply chains are now mission-critical. Many companies will continue to face shortages. As supply chain strategies shift toward adding buffer stocks, many small businesses may find themselves locked out of critical supplies.
Uncertainty
There are always unknowns when starting a company. But in a rapidly changing business climate, uncertainty about the future takes on new proportions. This reality makes it harder for entrepreneurs to make sound decisions and plan for the long term.
How to Address the Challenges Ahead
To overcome these challenges, entrepreneurs must be adaptable, resourceful, and know when to ask for help. They should prioritize their customers, employees, and investors to build brand loyalty and resiliency. Additionally, they can explore alternative funding sources, such as grants or loans, or lean on technology and automation to streamline their operations and maximize efficiency.
There are resources available that can provide valuable guidance and support to entrepreneurs at every stage of their business journey. In the Barrie, ON area, XcelerateNow conducts ongoing workshops and networking opportunities.
There are also programs for immigrant entrepreneurs who face all the same challenges but must navigate an additional list of challenges that present barriers to entry into their business vision.
HBEC Can Help You Succeed
The Henry Bernick Entrepreneurship Centre (HBEC) at Georgian College offers assistance, training, and mentorship in entrepreneurship, R&D, capital networking, and business innovation training.
Don’t let the year get to you. Leverage the experience and expertise of those who can help make your journey less challenging and more inviting.
