Key risks associated with Entrepreneurial Ventures and Characters: case study of local food sellers (I)

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An entrepreneur is any person who takes the necessary initiatives and actions backed with inherent (associated) risks to start (maintain) an economic venture for varied reasons; key among which are for a financial reward, sense of ownership, rendering solution to a need, self-satisfaction, acceptance or fame, and to achieve a stated objective or public good.

Peters & Shephard (2008) define entrepreneurship as “the process of creating something new with value by devoting the necessary time and effort, assuming the accompanying financial, physical, social risks, and receiving the resulting rewards of monetary and personal satisfaction and Independence.

To this effect, we can explain an entrepreneurial venture to mean any economic or valuable business activity that an entrepreneur (individual) engages in for its stated objectives, goals, mission and vision. The ultimate goal and objective of any entrepreneurial venture is to ensure maximum profitability, higher returns on its venture, solve a need and to have high sales of its entrepreneurial venture’s products/services.

Risk(s) is a broad term and used variedly across industries or sectors. Risks to an entrepreneurial venture can be explained as the potential setbacks that result in bottlenecks, constraints, failures, challenges, frustrations, stress and difficulties. Risks is not constant and varies sharply with no bearing to time, location, space, environment and business model (industry/sector).

Hardly will an entrepreneur fully appreciate and benefit from an enterprise or business unless grasping the entrepreneurial processes. I think the case of local food sellers comes in handy because it’s a sharp contrast to known services sectors in Ghana; moreover, the cooking skills of local food sellers is generationally and customarily learnt (transferred) informally.

The entrepreneurial venture processes are: identification and evaluation of opportunity, development of business plan, determination of required resources, and management of the resulting enterprise. How I wish a further research can be conducted to understand how our local food sellers brilliantly manoeuvre around the entrepreneurial venture process with finesse and perfection.

Similarly, I cordially entreat the local food sellers to kindly abreast themselves (read and learn further) on the entrepreneurial venture process as an entrepreneur and put committed efforts toward progressively implementing the entrepreneurial process to engender optimal business prospects for their enterprises or economic activity.

I believe the entrepreneurial venture process is vital and a necessity (plus) for the local food sellers to fully achieve profitability, good market share, problem-solving abilities, multiple task performance to meet timelines, and a strategic long (short and medium) term goal for their enterprises.

Having observed the local food selling sector over a period, the following are but a few of the risks that can be associated with their entrepreneurial venture – notwithstanding the type or variety of dishes/food sold or served. The risks are: founder risk, product risk, market risk, competition risk, and sales risk.

Founder risk is explained to mean losing sense of your personal life. Most founders of an economic activity or business tend to face the risk of creating a life of solitude and solitary confinement. They know only their business and nothing else. What they founded (established) as an entity becomes them, and they become the business entity. They devote their self, being and personality totally to the business. They cut ties, relations and social life with everyone except their business; their drive to make it great and splendid becomes their social life.

To this end, they sacrifice everything to achieve it while living a life of solitude far from social life. Founder’s risk is real with local food sellers. They wake up at dawn, some as early as 3am, and go to bed as late as 8-10pm. Food sellers typically use fire (firewood, logs, charcoal, gas, bamboo and others) for their food-cooking. The routine of preparing their wares (dishes) is cumbersome, mechanical, tiresome and stressful. The food seller most times is the founder and works 24/7 to ensure the food venture survives and has a solid continuity.

This is when extra hands and supporting staff are employed to support/run the food business. In this process of ensuring continuity; the founder risks her vitality and emotional, mental, psychological, social and personal wellbeing to ensure continuous success for the food business. This among others has been a devastating risk to our mothers who are usually proprietors of the local food ventures.

The Chop Bar (Fufu) sellers, Waakye/Beans sellers, Kenkey sellers, Banku sellers, Rice/Jollof sellers, Tuo/Rice Ball sellers are but a few of the local food businesses conversant in the Ghanaian food sector. The Founder’s risk at times affects the landed property, belongings and savings of the owner; thereby making the founder redundant and bankrupt with a long lists of creditors to be settled (refunded/paid).

Product/service risk is explained to mean not solving a real problem with your Product or Service. The inherent risk to most entrepreneurial ventures of our local food sellers is that their intention to start something fresh and new leads them to introduce continental dishes that are already served by well-established food joints, or there is a highly competitive tussle with such well-established joints. By so doing the food startup is dead before arrival.

This generally explains why soon-to-be-opened enterprises in the Ghanaian community tend to never-be-opened. More so, the risk with products or services is real; such that most economic ventures fold-up before they see the sunshine of their efforts.

Product or service risk is a universal and devastating setback faced by most startups or entrepreneurs in Ghana and beyond. They lose focus and direction of what they aspire to achieve. This shatters their drive and delivers their entrepreneurial venture a deadly blow. Products or services risk can make a food-selling business insolvent, and with no working capital to turn over the fortunes of such an establishment. Hence, most food selling ventures fold-up and are no more in operation. The potential product or service risk solely restricted to the local food business is the safety of: preparation, preservation, nutritional benefits and health hazards associated with the food sold (business).

The potential risks of preparation, preservation, nutritional benefits and health hazards associated with the local food are surmountable when food sellers stick to good hygiene, improved/flawless cooking skills, sumptuous nutritious meals; compliance with safety, health and hazard protection measures. I believe our local foodsellers are well abreast of generational (contemporary) changes and the extra challenges it requires of them. I believe with an extra effort, personal responsibility and an open mindset, our local foodsellers will easily overcome this hurdle.

Market risk is The Potential to End up in Massive Debt and Spoilage. I see risk in markets of most businesses with the potential to send the business into massive debt and spoilage. We seldom see startups or entrepreneurs undertake a study of the industry or market they intend operating in. They seem to think they know it all. Yet the market forces and other determinants in the market take them by storm, shredding their hard-work and resources to wastage.

The risk of not making efforts to understand the market is a huge factor that hampers vital business ideas and reduces solid business minds to become doubters and lose self-drive.  Know the environment you intend to or are operating in. Know it to an appreciable level. This will give you control and insight on how to manoeuvre around the other forces (determinants) of production, consumers, distribution channels, sales techniques, competitors and other stakeholders. The inherent market risk of the local foodseller is in relation to their preparation, processing, selling and operational stages.

The preparation stage starting from point of purchase to carriage (delivery) to the traditional cooking and food preparation is fraught with avoidable risks of spoilage, perish and waste of food stuffs (materials).

The processing stage is a critical one, as it’s the point of conveying the final food to the place of sale and ultimate consumption. The safety and healthiness of the food or otherwise to consumers is assured at the stage of processing: any externalities, interference or indulgence might risk the safety and health of the food. Externalities like smoke, dust, odour, insects, detergents/insecticides, environment/location (by gutter/borla), urine/faeces and others risk the food being poisoned and unwholesome for consumption.

The selling stage basically explains the marketing stage proper, because to a large extent it determines the debt (failure) and/or profit (success) of the local food seller. It’s the practice of most of our local food sellers to await buyers and consumers to converge at their selling places. This is the norm, a way of selling food that we are accustomed to and enjoy most. However to boost and up the sales of the local food sellers, this practice should be improved by the seller half-way meeting the buyers and consumers.

For this reason, I’m elated whenever I see the local food vending sellers and think they are meeting their consumers halfway and bridging the customer base/segment/size of the stationed local food sellers. I prefer you go to the buyer than the buyer coming to you; I think it’s a welcoming way to wet the buyer’s appetite and push their desire to purchase. In the same vein, orders and deliveries serve the same or better purpose. Thus, local food sellers should take their orders and deliveries seriously.

The operationalised stage signifies all activities or routines undergone to ensure the preparation, the processing and selling stages are done seamlessly and efficiently. The respective local food seller’s wares are a composition of assorted and variety of food they sell – implying the extent of exposure to risks this stage varies. Importantly, the risk is inherent – which is why each distinct food seller needs to understudy its marketing risks and find good measures to curtail them. A point I need to highlight is the ‘rest and wellbeing’ of the workers or food sellers at the operationalising stage. This is because marketing risk is mostly a factor centred on the person, hence the ‘rest and wellbeing’ of the person should be afforded the required attention.

Competition risk I strongly think can be summarised as overlooking the Small Details. Overlooking the small details occurs mostly when entrepreneurs tend to have a pictorial discussion of their competitors as final and absolute, with no technical competence. This act in itself is pervasive and wrong. Their inability to conduct a competitive market intelligence and competitor’s landscape survey is hindering success for the entrepreneurial venture against its competitors.

That notwithstanding, narrowing it to the local food sellers is interestingly shallow. This is because competition risk – in the local sense of it – is full of superstitions, spirituality, customs, beliefs and suspicions. Identical or substitute local foods or sellers tend to engage in activities and manoeuvres that are peculiar to their beliefs, faith, customs, culture, background, upbringing, religious directions and to an extent superstition.

For instance, Ghanaians ascribe bad omens to giving money with the left hand. In the same vein, our local food sellers tend to sprinkle (spread) water or light a smoking wick for reasons best known to themselves. Some local food sellers also have the belief that when a male/female or fair/dark person buys from you first, it indicates a good omen. It’s no secret that some food sellers prefer morning-hours market to the afternoon, and the reverse is also true.

Among the extremes is the act of pouring urine or splashing faeces on the wares of competitors. These few outlined sets of activities or practices are done with the strongest drive to do better than the next food seller. However, the inherent competition risks that are a huge challenge with our local food sellers are: appearance, location, customer care, interpersonal relationship, and food taste/balance.

The appearance of most local food sellers is not the best. Appearance activates the buyer to want to buy the food being sold. But the dressing, hair-condition, facial expression and general makeup of the food seller easily puts consumers off. The appearance is a key factor affecting the competitiveness of one food seller to the next food seller.

Location is a critical determinant in having a keen competition with other food sellers. Unfortunately, some food seller’s location or environment is not the best. The environment might be near a rubbish-tip, a gutter; not spacious, polluted with dust or smoke; and in some situations not far from a (public) toilet facility. All things being equal, a food seller in the areas or locations stated above cannot compete with a seller in more pleasant and sanitised location (environment). The irony is there is a held belief that food sold around gutters taste better and are sumptuous.

Our customer care as a people (society) leaves much room to be desired. We need to work on improving on our customer care. The local food sellers are no exception and also fall short on their customer care. A food seller with good, welcoming customer care will do better than one with improper customer care.

Interpersonal relationships are key to having a competitive advantage over your competitors. However, we tend to not make much use of them to our advantage. Ghanaians are known to be naturally friendly and affable, yet we fail to translate this to our work or food selling. That is the challenge we need to overcome. Our places of work are where we ought to be more welcoming, friendly, affable, jovial and engaging. By so doing, I believe our local food sellers can better their relationships with consumers for continuity and mutual benefit.

Food taste or balance is competitively right in the local food selling venture. The better the food tastes and the rest of the consumer’s feel-good effects from food bought, the higher the likelihood of that seller outdoing the next food seller. The reverse is also true. Food sellers ought to have a distinct taste, ambiance and balance of their food peculiar to their cooking. This makes the seller uniquely stand out, as well compel consumers to go for their food instead of other food sellers.

NB: This write-up is a study conducted on the local food selling business sector with focus on the risks associated with their businesses and the characters (measures) to help mitigate such risks in their businesses. Kindly expect the final part of the study.

The writer is an international trade enthusiast, social activist and advocate, community volunteer; the zango freelance entrepreneur.

Email:  [email protected] / [email protected]


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