The pandemic hit the Indian economy hard. In the early days of the pandemic, unemployment in India stood at a record high of 29%. So far, things have improved. As of the end of November, India’s unemployment rate stands at 7.8%. However, the outlook of unemployment in India for the next five years based on economic trends predicts that unemployment will increase by 30%.
In light of these predictions, the government of India has taken up some initiatives that aim to combat the joblessness rate. These initiatives look to encourage a culture of entrepreneurship in India. The ultimate goal is that this will build a business ecosystem that can create jobs with little barriers through an increase in the number of small businesses in India. With the recent improvement in the ease of doing business ranking, the government is committed to achieving these objectives.
You might also be interested to read: In Demand Skills In India
Based on this, it’s only a matter of time before many people begin to quit their jobs to start small businesses in India. The rationale behind this is usually that being one’s boss is better than working at a paid job. However, the realities suggest otherwise. Starting a business or becoming an entrepreneur has plenty of challenges. According to a report by IBM Institute for Business Value and Oxford Economics, 90% of Indian startups fail in the first five years, mainly due to lack of innovation.
Here are some of the challenges of entrepreneurship in India:
Market analysis and hiring
Unemployment in India is causing many people to think of owning a business. While owning a business seem to provide freedom and flexibility, these perks do come with increased responsibilities.
Before starting a business, it’s important to carry out a market analysis to understand how your product or service will perform. In addition to that, new businesses must also hire the right individuals, which is always a struggle with new businesses – hiring the right people means increased expense.
Conducting market research also requires money, which also isn’t available in large quantities. Due to these realities, new businesses go for cheaper alternatives and end up making wrong decisions that lead to the demise of many businesses.
Decision making and implementation
Employees tend to work with plans laid out by management. Even when they’re involved in the planning process, they get to make plans with a bunch of experts from various fields. Planning always involves the various aspects of the organization; hence, the creation of a formidable plan and an effective implementation strategy.
As much as entrepreneurship is needed to improve the economic condition of India, the early days are usually very challenging. As an entrepreneur, starting, planning, decision-making, and implementation will be done individually. Having to handle this at a go can lead to fatal for the business. New entrepreneurs do fall prey to making wrong decisions, poor implementation, or inappropriate timing.
Family relations
Entrepreneurship in India tends to take a toll on the family life of individuals. For example, some individuals, in an attempt to avoid the burden of taking a loan, use their savings to start their business. With little to no yield in the early days of the business, the family bears the brunt of the situation.
Often, this would mean having to find other sources of income, at least until the business kicks off. It can lead to spending less time at home and with the family.
References:
- 90% of India startups fail within 5 years of inception: Study | Moneycontrol News | July 9, 2018
- India’s unemployment rate rises further, employment rate lowest since June | Yogima Seth Sharma | November 26, 2020
- Perks of not being your own boss | Tamanna S | November 24, 2020
You might also be interested to read:
Related Topics:
