You might be thinking of being your own boss and running your own business. That’s quite a good course of action, but are you a good entrepreneur?
Business owners take major actions every day, from hiring to reviewing earning reports and handling crises. Business leaders need critical thinking skills to make difficult decisions to make the business grow.
This article will talk about possible troubles you might encounter while running a business as well solutions you could choose from. If you do well in analyzing problems, coming up with the correct answer, you’re one step closer to your entrepreneurial goal!
Imagine you are receiving quite good pay by working for someone. Even though you are receiving a lot, you still find your work unsatisfying. Suddenly, your father’s business back when you are a child pop-out into your head— a bakery.
Feeling like you wanted to establish your own bakery, you ventured out in business, aiming to be the leading producer and seller of baked goods in your city, as well as a famous tourist point of interest. To fund your start-up, you went to a bank and developed your enterprise’s business plan, thinking through its core objectives and business activities, and you devise ways to achieve its goals.
Upon digging deep into the possible streams of income you can get from a bakery, you decided to (1) sell your product daily, (2) and sell coffee products in the bar area with an excellent aesthetic style.
You hired three people to help you manage your business— one is a baker who works at night for your products to be fresh in the morning, the other is assigned for daily delivery of products to restaurants, and the last is a young lady that will work at the coffee area while being the face of your shop.
Eventually, you developed a new marketing strategy that incorporates social media advertising and giving away free samples in malls, which is good for tourism.
After being in the business for eight months, your business is skyrocketing with locals who love your food and tourists lining up to get a taste of your special donuts. Because of this, your three employees were not enough anymore, and some deliveries are getting missed since orders are too many to handle.
Although you want to scale up your business, some boundaries are limiting you from getting more customers. From having three people to work for you, you have to hire more people to help you strategize to scale up your business. If you are responsible for handling taxes and other tasks, it might be a good idea to hire an accountant.
Recruiting one more baker, waitress, and driver for your delivery service will also be a wise move. Although hiring more people will require you to pay more money, it will bring you much benefit, giving you the necessary time to plan for the growth of your business.
Having your food products and coffee shop in the same building makes it easier for products to go from the bakery to the customer area. However, it makes your space limited, prohibiting you from producing more goods and get more customers. This leaves you with two choices:
- Rent another space. Perhaps, there’s a vacant space in a part of your city, similar to the one you currently own. Divide your staff, send one of your bakers and waiters to conquer that part of your neighborhood.
- Rent another two spaces, then separate the bakery from the coffee shop. You could try renting two different places, using one to bake your products, and the other as the coffee shop. Although this gives you a much bigger area to bake and run your shop, this has a considerable downside. By separating the two, there will be a hassle of transporting the products to the bakery every single day. This will cost more money and time every morning.
So, what would be your choice?
Would you rent another place that shares both spaces for baking and sell? Or would you rent another two spaces with different locations, separating the baking and the selling area?
If you’ve chosen to rent another place to both bake and sell, you made a wrong choice.
If you would go back to your initial goal, you wanted to be the leading producer and seller of goods in your entire city. You want to dominate the industry. And you will not achieve this goal by merely putting up another coffee shop as it holds you back from producing goods even more.
Though you only have a small number of employees, if you get a different place to bake, you will produce more of your products. This will enable you to establish a more scalable business, making it easier for you to expand.
The best choice is to rent another two spaces, giving you three locations to handle— one main bakery and two coffee shops.
Now, the cost is getting higher, and you need to get more profit. However, there’s another competition in that area. Even though the products they sell are much different than yours, they could still attract your potential customers. You might live in the shadow of your competition until you run out of customers and money.
What should you do to increase your revenue?
The first choice you have is to generate more sales with restaurants around your area. Even though some restaurants already have providers of their baked products, you might still be able to persuade them to sign a contract with you. Supplying baked goods to restaurants would enable you to earn a pretty steady revenue.
Another possible way to increase your sales is to generate more sales in your coffee shop in the new area. Devise a marketing strategy to beat your competitors. Perhaps, increasing your presence on social media or giving away free samples in your area would help you make a name there too.
In choosing between the two, consider that tourists and restaurants make around 50% of your profit.
Between the first and second choice that was given, which would you choose?
If you choose the first choice, then you are right. Supplying goods for the restaurants around your area is less risky and could guarantee you a stable weekly or monthly income. A steady profit will help you budget your future campaigns. On the other hand, the second choice could only make your business spiral out at any given time.
After eight months, your business is doing good. However, an unexpected virus started threatening the world economy. All of a sudden, restaurants from all over the world began closing down, including restaurants with whom you have signed contracts. Your coffee shop’s profit also declines. What should you do now?
This is for you to think about. Come up with a strategy!
Are you able to choose the correct answers in the instances presented? If yes, you surely are a good entrepreneur!
