A Lot Of People Want To Start A Business But Don’t – Why?

Imagine this: you’re sitting at your kitchen table, cup of coffee in hand, dreaming of starting your own business. Many share this dream, but most won’t act on it.

In a recent study by GOBankingRates, a whopping 42% of Americans have toyed with the idea of entrepreneurship.¹ Going off of the latest census, the math works out to over 108 million business concepts that are brewing in the minds of adults across the nation. To put that into context, there are just over 33 million businesses operating right now, according to the Small Business Administration.²

Yet, despite there being so many people who are interested in starting a business, why don’t they? There were a few reasons that stood out to me in the GoBankingRates survey, where almost 16% of people were unsure about the type of business to start, over a quarter feel strapped for time, and nearly half are held back by financial constraints. While these are relevant, I knew, based on my experience working with small business owners, that there was more missing. Looking for more data, I landed on a recent survey from Samsung, and while somewhat related, in my opinion, they found that more than half lack the confidence to invest time into themselves and their business ideas, and 42% believe that having a mentor could be the key to unlocking their entrepreneurial potential.³

I’ve worked with and have close friends who fall into this loop of having the interest in starting a business and the skills to do so, but don’t take the first step. So, in this article, I’ll dive into these four challenges and maybe provide some encouragement for those standing at the crossroads. Whether you’re grappling with doubts, time constraints, financial hurdles, or simply seeking that spark of confidence, you’re not alone. Let’s explore why these barriers exist and whether these barriers are perception or reality

Don’t know what type of business to start

For many aspiring entrepreneurs, the journey toward business ownership begins with a dream, and this dream starts because they want more than what their career has to offer. Instead of finding a different job, the entrepreneurship bug bites. After all, going this route lets them call the shots, and there isn’t a set limitation as to how much money they can make. The problem here for many people is that there is almost an infinite number of choices, leading to indecision and analysis paralysis. While it’s important to thoroughly consider your options, dwelling too long in the dreaming phase of how great it would be to be your own boss (spoiler alert – it’s not always) can be no different than dreaming about winning the lottery. Fun to do, but essentially a waste of time.

So, if you find yourself in this boat, you’re not alone. You may not find the answer here, but I have a few strategies that may help you navigate through the fog of uncertainty to help find a business idea that resonates with you.

Identify Your Skills, Interests, and Passions

One way to uncover a viable business idea is to look inward. I do want to start by saying that I don’t recommend you fall into the conventional wisdom that your business has to be a passion of yours. If I had a nickel for every time someone who didn’t really understand business spouted Oprah Winfrey’s quote, “Follow your passion. Do what you love, and the money will follow,” to their friend wanting to start a business, I would be a very wealthy man.

Having a business that you are passionate about is great, but in my experience, it is not common. Why? Because, at its core, a successful business is about solving problems for a customer, and since most passions don’t revolve around fixing problems, this may be the wrong place to be looking for inspiration. Instead of finding something you are passionate about, look for things in the business that you are interested in. Instead, consider evaluating your strengths, talents, and what you genuinely enjoy doing. If creativity drives you, look for business ideas that allow for innovation and design. Whether it’s starting a graphic design business, an independent publishing house, or inventing a new product, businesses that rely on creativity can be deeply fulfilling for those who love to think outside the box and create something new. Or, you may be someone who loves tackling challenges and finding solutions. In this case, a business that focuses on problem-solving, such as a tech support service that helps non-tech-savvy individuals navigate the digital world or a consultancy that helps small businesses streamline their operations, could be areas where your problem-solving skills shine.

Related: Why passion is overrated when starting a business

Solve a Problem

Another effective way to create a valuable business is by focusing on a problem to solve. Start by observing your daily life, your community, or the industry you’re interested in. Is there a recurring problem or inconvenience that people face? Your business could offer a solution to this problem. Whether it’s a service that saves time, a product that enhances comfort, or an innovation that addresses a gap in the market, solving real-world issues can lead to a profitable business model.

In this path, understanding the market and gauging market demand accurately is challenging. Many businesses falter by misestimating the appeal of their product or service, and my recommendation is to not just rely on your hunches or assumptions. Diving into industry trends, consumer behaviors, and potential gaps in the market helps to validate there may be an opportunity, a more practical approach is to test your idea. This could mean launching a minimal version of your product (a prototype) or offering your service to a limited audience to gather feedback to see if there is real demand.

Leverage Your Experience

While this can be somewhat related to solving a problem from above, an unfair advantage you may not be considering is your past professional experiences and the knowledge acquired from previous roles. This experience can offer a unique perspective on an industry’s needs or inspire innovative solutions that haven’t been considered before.

Strapped for time

A common excuse I’ve heard from many people wanting to start a business is not having enough time. It’s true that starting a business can require a significant commitment, and for those juggling jobs, families, or other responsibilities, it may seem impossible. However, I’ve personally watched countless entrepreneurs who could have honestly said they were too busy, but they found the time and became very successful. While time is limited for everyone, finding it is often a matter of priority rather than availability.

The reality is that launching a business is challenging and is going to require sacrifices, but it’s far from unattainable. Successful entrepreneurs often share one trait: they make time for their business ambitions, no matter how packed their schedule appears. It’s not about having spare time handed to you; it’s about making something a priority. This can mean dedicating an hour each evening after the kids are asleep or using weekends to plan and execute their startup. For some, it involves cutting back on leisure activities like watching TV or social outings, reallocating those hours to build their dream.

It’s not merely about working harder but working smarter. By identifying and blocking out pockets of time, the seemingly insurmountable challenge of finding time can be overcome by paving the way by taking small, consistent steps. Whether it’s an hour a day or a few hours a week, what matters is the progress you make, not the speed at which you move.

Financial constraints

Navigating the financial hurdles of starting a business is undeniably challenging, perhaps the most difficult obstacle for aspiring entrepreneurs. While tales of quick success as a business owner are often highlighted by influencers and the media, it’s important to approach entrepreneurship with realistic expectations. According to the U.S. Bureau of Labor Statistics, about 20% of new businesses don’t make it past the first two years, meaning success isn’t a given.⁴ Furthermore, the Small Business Administration (SBA) points out that it’s not uncommon for businesses to operate at a loss for the first couple of years before finding their footing and becoming profitable.⁵ This underscores the reality of owning a business and preparing for a journey that may not yield immediate financial rewards.

For those facing financial barriers, I have a couple of tips that may help you navigate these waters:

Improving Your Credit Score

Access to funding is critical when starting a business, and your credit score plays a significant role in this process. A strong credit score can open doors to better funding options with lower interest rates, whereas a poor score may limit your options and result in less favorable terms. If obtaining bank funding is part of your plan but your credit score isn’t where it needs to be, consider taking time to improve your credit first. This could involve paying down existing debt, disputing inaccuracies on your credit report, or simply building a history of timely payments. Improving your credit score is an investment in your business’s future, enabling access to the resources you’ll need on better terms.

Exploring Local Microloan Programs

Local microloan programs are an often-underutilized resource for aspiring business owners. There are local organizations that are set up to support entrepreneurs who may not have perfect credit or the collateral typically required by traditional lenders. Beyond offering financial assistance, many of these programs provide training and mentorship, equipping you with the skills and knowledge to manage your business effectively.

Lack of Confidence & Mentorship

The thought of stepping into the world of entrepreneurship is unfamiliar, especially for those without a family background in business. So, it’s completely natural to experience some fear and doubt when thinking about making the leap. In fact, if the prospect of starting your own business doesn’t spark a little fear, you may want to talk with a therapist

Fear will stop some people in their tracks, but like anything else, someone who was already able to do what you are trying to do. If you could talk to someone and get their guidance, your path would be much clearer. The idea of hiring an advisor might seem like the go-to solution, but it can be prohibitively expensive and raises the question of where to find trusted advice. Fortunately, there’s good news: a wealth of resources is available at no cost, thanks to significant investments by federal and state governments in business assistance programs.

Organizations like the Small Business Development Center (SBDC), SCORE, Women’s Business Centers, and Veteran’s Business Outreach Centers offer a lifeline to budding entrepreneurs. These programs provide access to seasoned mentors who have been in your shoes and have navigated the complexities of starting and growing a business. Whether you’re looking for practical advice on business planning, marketing strategies, financial management, or any other aspect of entrepreneurship, these mentors can offer invaluable insights.

The beauty of these resources is not just in their cost-free nature but also in the tailored support they offer. Each entrepreneur’s journey is unique, and these programs recognize that, providing personalized guidance to help you overcome your specific challenges. From one-on-one mentorship sessions to workshops and networking events, the opportunities for learning and growth are vast.

Wrapping Up

The journey of starting a business is undoubtedly filled with challenges, but it’s also one of immense opportunity and personal growth. The key lies in taking that first step, so let this be a call to action. With the right tools, resources, and mindset, your entrepreneurial dream can transform from a distant vision into a thriving reality. So, take that step, embrace the challenges, and embark on your journey to business ownership.

I would love to hear your feedback. Did I miss a reason that’s holding you back from starting your business, or did any of these speak to you – and more importantly, did they help? Let me know in the comments!

Sources

1. GoBankingRates ︎
2. Small Business Administration ︎
3. Samsung ︎
4. Bureau of Labor Statistics ︎
5. Small Business Administration ︎