Key risks associated with entrepreneurial ventures and measures to mitigate risks: case study of local food sellers

Local food selling

Sales execution is vital for the continuity and going concern of any entrepreneurial venture, especially the local food selling business. To this effect, I liken sales execution risk to Losing Sales Target and Revenue Shortfalls. The reality is that most startups or entrepreneurial ventures’ sales execution is risky and inefficient. They do not have any sales plans or strategy. If they do have a sales plan, their strategy is often unproductive and ineffective. This makes them miss sales targets and experience a sharp dip in their revenues and working capital.

This is especially true in the local food selling sector, where daily sales determine the following day’s food preparation and sales. The working capital of local food sellers is a huge determinant to the survival of their food selling business. The sales execution risks are well pronounced in aspects of: daily (expected) sales, vagaries of the weather, occasions or festivals, orders and delivery, location and environment, and standing goodwill.

  1. The daily (expected) sales of most local food sellers are greatly influenced by the food they sell in a day. The expected and actual sales of the food they sell per day determines the sales risks they are prone to. The higher the daily sales, the less sales risks the food sellers face in their food business and long-term survival. However, the lower the daily sales, the higher the sales risks the food seller’s encounter.

This is especially devastating in instances where the food seller heavily relies on the day’s sales to make the next day’s food for sale. The weekly and monthly sales targets largely determine the continuity and long-term operations of local food sellers. Thus, the actual weekly and monthly sales directly affect the working capital of the food business, which in turn determines survival or otherwise for the food selling business of most local food sellers.

  1. One important factor that is relevant to sales execution risks is vagaries of the weather that is inimical to the local food selling business. Most local food sellers are largely affected by changes in weather and resulting rainfall, wind, floods, storms and other natural phenomenon. In any instance when it rains or floods, consumers are unable to go for their food at their favorite joints – which ultimately affects the food seller’s sales execution and actual (gross) sales.
  2. There is also an established tradition of a nominal rise in sales of local food sellers when there is an occasion(s) or festivals; the occasions or festivals seem to have a direct correlation to the sales of food sellers. Local food sellers are much aware of the occasions/gatherings and have lengthy plans for how to recoup on their food sales. Some notable occasions are: Easter, Christmas, Independence Day, Eid/Salah, Hajj villages, football matches and others.
  3. Sales execution risks can be ameliorated by the local food sellers when they diversify their sales models and expand their revenue streams. An effective model to diversify the sales of local food sellers is an efficient, prompt ‘orders and delivery’ sales technique. A typical local food or dishes outfit hardly ever does orders and delivery. Imagine the additional revenue stream to be unlocked if local food sellers implemented orders and delivery services. Good examples of this are Kenkey boutique Asanka, and Champion Local Foods.
  4. I think the location of a food joint and its environment of operation are key determinants to increase sales of the venture and minimise any likely sales execution risks. Location and environment are critical factors worth considering by local food sellers to boost their sales target appreciably.

Strategic location and place of food sales can provide an addition to food sellers’ sales. While a covered and isolated location cause a drop to the food sellers’ sales, densely populated areas are better than scattered, underpopulated places for food buying. All things being equal, the higher the population of people in an environment, the higher the sales of food sellers – and the reverse is true.

  1. It many times baffles my mind that consumers by-pass similar food joints and go to far distant places to get the same food with seeming stress. Undoubtedly, the standing goodwill of the food or food seller might be the main reason that urges a buyer take such a challenge in going far for the food.

The standing goodwill of a food seller to a large extent favours their sales, or might intensify their sales execution risks. For this reason, all food sellers ought to take their reputation and integrity seriously; with this, they stand a good chance of creating credible lasting goodwill that stands the test of time and brings them more benefit. The local food sellers have to work on their standing goodwill and improve on it always, because it is a human service institution requiring full focus and daily improvement par excellence.

To mitigate the risks facing entrepreneurial ventures, in particular local food sellers, it is suggested startups or entrepreneurs must have a sense of curiosity that allows them to continuously seek new opportunities by: practicing Structured Experimentation; developing an Adaptability plan and Decisiveness in management; having a Team Building spirit and beibg Risk Tolerant to shocks from market forces; being Comfortable with Failure as a springboard to greatness; and nurturing the spirit of Persistence to achieve their stated objectives.

It is strongly believed that these mitigating measures harness some traits like personal principles and characteristics to guide, minimise or ameliorate the risks associated with economic ventures of the local food sellers. The local food selling industry is unique, heterogeneous and spectacular in their specialisation and dishes. Hence, drafting uniform or homogeneous characteristics or traits is a huge challenge. However, an attempt is made to give an impression of a generalised application with excellent features to safeguard the local food sellers from the devastating effects of entrepreneurial risks confronting their industry and sales (operations).

As entrepreneurs, the local food sellers ought to continuously seek new (better) opportunities. One effective characteristic worth emulating is to have a Structured Experimentation on what principles or best practices fit the business you venturing into. With a structured experimentation, you give yourself an open-mind to accept and welcome counter-suggestions which grant you another excellent perspective that didn’t appear in your original approach.

This is especially true in the food selling sector, where the tastes, nutrition, health and wellbeing of consumers are paramount. By welcoming counter-suggestions by the local food sellers, fresh ideas and principles can be shared and learnt faster – especially from consumers and competitors. This will help to broaden the understanding of issues surrounding the food selling business and avail the food seller great opportunities for solving diverse risks with a myriad of readily available solutions from consumers, the market, competitors and other stakeholders.

Structured experimentation could start from the preparation, processing, selling and operationalisation stages of the food business. At each stage, master the steps of engagement and activities and perfect them seamlessly. This can be made possible through having structured experimentation of all the four stages and ensuring timely remedies to ameliorate any expected or unexpected occurrences. A good example is food-poisoning of customers or consumers on a wide scale. A policy action detailing such an anticipation is a welcome remedy and a timely structured experimentation for favorable results.

As a personal guide for local food sellers, they should nurture a character to develop Adaptability plans and Decisiveness in their operations and food selling style. Food sellers should be ready to adapt, adjust and adopt good ideas. This requires a capacity building opportunities on taste, safety, preservation, health and cleanliness. Moreover, to counter risks local food sellers should be decisive, straightforward and upfront with decision-making. The food selling business is fraught with constant decision-making on pricing, quantity, quality, nutrition, measurement and giving balance. Local food sellers should not delay with taking decisions; they should ensure decisions taken are considered thoroughly by reflecting on all possible perspectives so the optimal choice can made. By being adaptive and decisive, local food sellers develop a strong character to help their startup or food business readily face and mitigate any risks or setbacks (challenges) it encounters.

Startups and businesses should put in place Team-spirit Building structures and ensure a robust system that will secure the entity to be Risk Tolerant to shocks from market forces – internal and external. This is extremely necessary with local food sellers, because their food business requires people and processes (steps). The local food sellers, by ensuring a good team spirit is built with their operation (food selling), will cushion their food business to be risk-tolerant across the various phases of their operation or food selling business. To be tolerant of risks, the local food selling entrepreneurial venture needs to have plans and analyses of various stages for their line of food business in the form of:

  1. market survey for the often purchased staple food in its location of operation; brief feasibility studies to understand the potential and viability of the food business (to be) engaged in
  2. undertake a practical observation of the optimal sales plan to implement, and how to be more efficient
  • the local food sellers should as well embark on personal observations and guidelines of optimal marketing strategies to adopt and implement with its food selling business
  1. local food sellers should also be well-informed of their operation and food sales by being strategic and having a long-term pictorial vision and strategic plans for their food business, so as to be in the food business for the foreseeable future.

This, I believe, will keep in check any possible risks against the food owner and food business for minimal shocks that can adequately be managed by the food seller/owner.

One characteristic I find thrilling is that an entrepreneur or startup should be Comfortable with Failure as a springboard to greatness. This looks or sounds incredible, but it’s a magic measure to keep risks in check and be a direct or indirect springboard to achieve greatness. Imagine the countless risks (challenges/bottlenecks) the local food sellers encounter daily; with their mindset of the countless risks to be encountered as a learning curve, this will ultimately enable them to be imbued with confidence and be comfortable with such risks.

With constant involvement and practice they will become self-motivated to work at achieving their set goals and vision. Just like the statement “I just found 1,000 ways that did not work”, yet pushing all frontiers to make a random chance of a possibility the reality. This characteristic is worth inculcating by local food sellers or startups of fresh businesses. The case of the food sellers is interesting, given the inconvenience and discomfort they face daily.

However, with their selfless strides and efforts in the food making industry, progressively it will serve as a springboard to their greatness in the food business. The setbacks encountered once challenged decisively become a springboard to greatness. The simple message to our wonderful local food sellers is: “Just don’t give up; rather, be comfortable taking risks and keep on pushing to make it great and in grand style”.

The character of nurturing a spirit of Persistence to achieve a stated objectives is worth imbibing in any profession- or career-driven person. Which is why the need to nurture a spirit of Persistence to help achieve your stated objectives is paramount, because it will mitigate the susceptibility to risks for entrepreneurs and fresh businesses. This is enormously true in the case of local food sellers who have a mindset to nurture the spirit of Persistence to stay in their food business and become relevant in their areas of food selling.

To all my local food sellers, I urge you all to let your words, thinking, thoughts, habits, behaviour and character reflect the nurturing of yourself (person/food joint) to be persistent in achieving your set objectives. Once you have set your mind to a thing, do not hesitate or harbour fears; just go after it or for it with all what you can muster. Be determined and you can achieve the impossible; thus making the difficult easy to achieve. The sheer persistence and insistence of our local food sellers to achieve success is worthy of admiration. Our local food sellers indeed need to be recommended for their daily persistence to make food available on our tables, especially for the masses of our population.

To conclude, risks to entrepreneurial ventures – in particular the local food selling business – are heightening in our part of the world. The financial reward aspect of risks is what makes the whole entrepreneurial venture or concept sound like a near-impossibility. The working environment and our system of business is not conducive to entice more youths to want to go into entrepreneurship. This is why when there appears to be a vast number of food sellers hastening to take huge financial risks and are undaunted by the food selling business, it is encouraging and inspiring.

Though day-in day-out a number of food sellers wind up becoming bankrupt, dozens of new food sellers start afresh as well. The reality is that entrepreneurship is not enticing enough to persons who want to start from scratch in contemporary times. Stories making the rounds on entrepreneurship are demoralising and not inspiring enough to strengthen feeble legs to want to keep on doing their best. The few who have made it through entrepreneurship are not shining their lights to brighten (lighten) the touch of infant entrepreneurs who desperately need such inspiration and motivation.

Character ultimately defines who we are, what we stand for, why we want to carry on, whom to look up to, and where to aspire reaching. Character gives you the above and more to hopefully hold onto the rough edges of entrepreneurship and wish to prove everything/everyone wrong. Yes, the road might be rough and dreary but there is a light at the end of the tunnel; trust in God and trust in yourself to march on to greatness and glory. No guts, no glory.

NB: This write-up by Ismail M. Kailani is a study conducted on the local food selling business sector with focus on the risks associated with their businesses and the measures to help mitigate such risks in their businesses. We trust you found this study interesting and useful.  

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