Answer:
A large number of entrepreneurs particularly in the small enterprises fail due to several problems and barriers like:
- Lack of market knowledge
- Lack of technical know how
- Lack of seed capital
- Lack of business know how
- Complacency–lack of motivation and individual spirit
- Unfavorable family ground
- Lack of Education
- Lack of attitude and training
- Influence of Gender, Caste, Custom.
- Inadequate infrastructure facilities.
- Lack of transportation and communication facilities.
- Unavailability of raw material.
- Absence of regular supply of power.
- Absence of Ideal Market conditions.
- Corruption in administration.
- Unstable state government.
- Legal constraints and regulations
- Monopoly and protectionism
All these causes are due to unfavorable socio economic conditions. Karl H. Vesper lists certain entrepreneurial factors that help to reduce the effect of these barriers. The following figure depicts how it happens:
Source: Karl H. Vesper, Entrepreneurship and National Policy (1983), Walter E. Heller, International Institute for Small Business.
Many entrepreneurs may lack managerial skills, marketing capability, or financial resources. Their inventions are often unrealistic, requiring significant modification to be marketable. In addition, entrepreneurs frequently do not know how to interface with all the necessary entities, such as banks, suppliers, customers, venture capitalists distributors and advertising agencies.
Yet, in spite of all these difficulties, entrepreneurship is presently the most effective method for bridging the gap between science and the marketplace, creating new enterprises, and bringing new products and services to the market. These entrepreneurial activities significantly affect the economy of an area by building the economic base and providing jobs. Given its impact on both the overall economy and the employment of an area, it is surprising that entrepreneurship has not become even more of a focal point in economic development
