Top Tips! Part 1 - Expert Coaches offer Expert Advice
This blog post is a collection of key insights from the pilot session of 'Ask a Coach Hour'.
This is part 1 of 2.
There is nothing more gratifying than sharing your knowledge and experiences with young change makers. Last year, I participated in the first ever livestream coaching event on the Ye! Community website called ‘Ask a Coach Hour’. The livestream turned out to be a healthy discussion on a wide variety of challenges faced by young entrepreneurs.
Below are some of the key takeaways from the discussion. I hope the questions and responses can assist young entrepreneurs around the world to startup and grow their enterprises.
Business should solve problems
Although businesses are for profit institutions, the reality is that they help solve a problem society is facing. In doing so, they add value. For an entrepreneur, the best business is one which combines his or her passion with the needs of society. A business becomes profitable when it is offering a solution or service for which the societal problem is so great that individuals are willing to pay money to solve it. Although many businesses do not break even until year three, this should not deter you from starting up. If the service you are providing adds value in a way that is better than any competitor, the profits will come.
Risk is defined as a situation involving exposure to danger. The frequency of conducting risk assessment varies depending on the size and complexity of the business. Also, risk has various components e.g. political risk, market risk, credit risk etc. The best approach is to layout the risks your business is facing or will face, into clearly identified categories. Most large companies use an "Enterprise Risk Management" (ERM) framework. Here is a link to that framework.
The Importance of Diversification
In order to make a business "weather proof", it is important to diversify the sources of revenue. An entrepreneur needs to have multiple income streams to combat slowdown in one revenue source. This will help weather proof the business. For example, an entrepreneur could provide maintenance services after selling a product. That way, when faced with a slowdown in product sales, ongoing maintenance on products already sold, can help diversify the business. However, entrepreneurs should be careful when diversifying and should not set up multiple revenue streams around services or products which do not support the enterprise’s core competency. A good resource to think about diversification is the portfolio planning model developed by Bruce Henderson of the Boston Consulting Group.
Stayed tuned for Top Tips! Part 2 - Marketing Essentials
Abhishek Kothari is a Banker at Citi as well as a Skydiver and Budding Fixed Wing Pilot. His interests range from sports to entrepreneurship and politics. He is a new member of the Ye! Coaching Community and available to answer all of your most pressing entrepreneurship questions.
Head Image Courtesy of: Pixabay