Self-employment and Entrepreneurship: Opportunities & Challenges
Published February 03, 2022
The job market will go through significant changes in the near future owing to drastic technological advancement. This changing landscape will provide a great opportunity for enterprising people interested in self-employment and entrepreneurship. These people work for themselves, run their own businesses or market a new piece of technology. But, how would you know if self-employment or entrepreneurship are for you? Learn with us in this article!
What's The Difference Between Self-employment and Entrepreneurship?
A self-employed person and an entrepreneur are often seen as similar, but there are significant differences in both roles. An entrepreneur organizes and operates a business by taking greater financial risks. In comparison, a self-employed person works for oneself as an owner of the business or a freelancer.
An entrepreneur generates funds for one's business, diversifies the interests, and typically focuses on wealth creation. On the contrary, a self-employed person focuses on a single business and expects a good earning or regular salary.
Despite the differences, self-employment, and entrepreneurship benefit individuals in several possible ways:
- Teaches life skills
- Boost leadership qualities
- Prepares individuals for uncertain future
- Makes them confident, creative, and goal-oriented.
Thus, young minds are always encouraged to explore these options.
This article lists everything one needs to know before starting the self-employment or entrepreneurial journey. Keep reading!
Is entrepreneurship growing in the US?
The COVID-19 pandemic has brought a boom in startups. It has been seen that last year’s indicators have been surpassed by the new companies, not just in the U.S. but all over the world. Here we have listed some facts about the massive surge in entrepreneurship in the United States. Have a look:
- 14% of the U.S. adults are reportedly pursuing TEA (the early-stage entrepreneurial activity).
- The U.S. entrepreneurs have contributed 18% to the Information Technology and Finance sectors.
- The rate of profitability is increased by 25% for both men and women entrepreneurs.
- More than 36% of the U.S. entrepreneurs have developed innovative products even as their base offerings.
How can self-employment and entrepreneurship overcome unemployment?
Unemployment is one of the most significant challenges being faced by the economy. It has branched not only the uneducated but also the educated sectors. The United States has a significant chunk of the youth population, and to empower this segment of the population, the right set of opportunities are needed.
Self-employment and entrepreneurship are essential weapons to deal with the issue of unemployment. While being self-employed, people get to work on multiple things and handle different roles, eventually turning them into better individuals and leaders.
Additionally, entrepreneurship allows people to explore various options such as new ventures, alliances, businesses, etc. It opens the door to employment opportunities for many people as well. For instance, when an investor agrees to put money in a startup, the entrepreneur automatically gets a chance to expand the team by providing job opportunities to other people.
What are the top challenges faced by entrepreneurs and self-employed?
Starting a self-employment or entrepreneurial journey brings many benefits but running it successfully is not easy. You might need to face many challenges, and if you understand them beforehand, you'll be much better prepared to face them and take your startup to the heights of success.
Here we have listed some common challenges you may face :
Lack of knowledge and skills
If you are starting your first business venture, it is unlikely that you know the business's process. Lack of knowledge leads to mistakes that could cost you a loss in your business. It would be best to learn about each critical area like marketing, finance, and sales to overcome this. You should also absorb every little information about the industry trends and your targeted customers.
Competition is one of the biggest challenges one can face during the business. Especially for online ventures, the competition is most formidable. So, to survive such fierce competition, your startup also needs to play aggressively to gain much-needed recognition and customers.
Poor financial management
If your spending is higher than the generated revenue, your business might not succeed. So, to make a profit, it is vital to understand the costs your startup needs. Since poor finance planning eventually results in business failures.
It is super challenging to survive online security threats in this digital age, especially for the small startups operating online. Hackers are presented everywhere over the web, and they can take advantage of even a tiny loophole within your system. You can safeguard your crucial data and files through a virtual private network (VPN). It offers encrypted security and restricts unauthorized access.
You might not know the best way to market your services or products. It could be online, print, mobile, advertising, etc. At this point, to maximize the return on investment, you will need a core marketing plan. So, first, you should understand your audience to ensure the marketing activities that motivate their purchases.
What is the self-employment assistance program?
The self-employment assistance program (SEAP) allows people to start their businesses while collecting unemployment insurance benefits.
You can apply to this program if you are:
- At least 18 years old or above.
- Eligible to receive 13 weeks of unemployment insurance (UI) benefits
- A recipient of an invitation letter by the Department of Labor
- New to the SEAP (not already enrolled in the past)
Criteria to get business approved:
- Your proposed business should be located in either of these states: Delaware, Mississippi, New Hampshire, New York, and Oregon
- You must be willing to work full-time
- You have to be an active owner of your business
- You should have a clear business plan, and it cannot be previously owned
- You will be able to work full-time on your business while receiving Unemployment Insurance (UI) benefits
- Money earned from the business will not be deducted from the UI benefits
- You will get various opportunities to launch your business
What are the programs offered by the US government for entrepreneurs?
The federal government provides monetary assistance to entrepreneurs through many programs. Here are a few:
Women-Owned Small Business (WOSB) Federal Contracting Program:
The goal of this program is to provide equal opportunities to women. The Office of Women’s Business Ownership supports women entrepreneurs by offering business training and access to credit and capital.
Amazon’s Black Business Accelerator Program:
If you're a seller in Amazon's store, you may be eligible for the Black Business Accelerator Program. This program was created to support Black entrepreneurs, and it offers financial support, business advice, and promotional support.
Do You Fellowship Program:
This exclusive program was started in 2020 and continues to provide benefits to 10 Black and Latinx women. The innovators are awarded a $5,000 investment in their business and various mentorship opportunities.
Go. Be. Elevate Fund:
It was formerly known as the Good Work Network, which aims to help entrepreneurs by providing a Grant of up to $4,000 toward any project.
NGLCC XLR8 Certified LGBT Business Enterprise (LGBTBE) Capacity Development Program:
The National LGBT Chamber of Commerce (NGLCC) has extended applications for LGBT entrepreneurs. This program will provide funds, training, and business knowledge to the selected members.