You may think there’s never been a better time to be an entrepreneur. Bruce Hunter begs to differ. As president of Lighthouse 360, a firm that offers advisory services to SMEs, he deals with entrepreneurs on a daily basis. And while he’s encouraged by the increasing interest in entrepreneurship, he has some big concerns.
In this week’s BusinessCast, Hunter shares what he considers to be the three biggest crises facing entrepreneurs today—and shares some insight into what can be done about them.
1. The succession crisis
Across Canada, there are hundreds of thousands of baby-boomer business owners approaching retirement age. And not many of them have a succession plan. This rankles Hunter. “There are very, very few of these people concerning themselves with exit, much less developing a formal plan,” he explains. “That’s a significant issue.” The problem, he says, is that most of these boomers are relying on their businesses to fund their retirements. “And those funds are either going to be totally non-existent or significantly less than if they’d prepared for succession.”
Hunter adds that it can take a long time to polish a business to prepare for sale—longer than most entrepreneurs anticipate—which is why so many business owners will soon be scrambling. “The runway is getting short,” he says. Thankfully, he adds, it’s easy to get started: a simple Google search of “succession planning” or “business exit” will reveal enough resources to help any entrepreneur start the sale process.
2. The mentorship crisis
Entrepreneurship has become a very hip thing to do for young people, especially those straight out of college or university (or those following Mark Zuckerberg’s dropout approach). While Hunter appreciates this movement, he’s concerned that many are getting involved in a world for which they’re not prepared. “You end up with folks in charge with not a lot of experience; they didn’t have deep development,” he comments. “In some ways, it’s the blind leading the blind… A lot of young entrepreneurs have no idea what they’re up against.”
The solution, he says, is to build more robust—and useful—mentorship programs, through one-on-one guidance or peer groups. Fortunately, Hunter points out, “there are a lot of entrepreneurs looking for opportunities to give back.”
3. The time-to-market crisis
“There’s been massive change, sponsored by the internet, related to the globalization of the marketplace,” says Hunter. “That is rapidly increasing the change we see in the market.” This creates some real issues for entrepreneurs, he adds.
“It used to be that an entrepreneur had a lot more time to get out there and test different ideas, to make sure systems and infrastructure were solid before they went out to market. You no longer have that advantage. You don’t know who’s sitting there in a garage somewhere in Russia coming up with a better idea. The collapsing of that timeframe for you to get your product from idea to market is becoming quite a problem.” And that leads to what Hunter calls the “not ready for prime time” effect. “A lot of these businesses are not able to withstand the broadsides of some marketplace events, which also are happening more rapidly,” he says.
The upside of the rapidly changing global economy is that entrepreneurs today tend to think of themselves as citizens of the world, not just citizens of Canada. “I think that’s a good thing,” Hunter says.
For more of Hunter’s thoughts, listen to this week’s BusinessCast, which you can download by clicking on the iTunes logo below:
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Do you agree with Hunter’s list? Why or why not? Share your thoughts by commenting below.