Edmonton Business Coach | Business Plan Risk Reduction Strategies
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If you look hard enough, there’s always trends that are presenting opportunities and there’s always trends that are making it more challenging. So we look at that first and then we’re going to look at the competitors. Do you know if you have lower and easy competition, that’s one thing. But if it’s, you know, stiff competition, that’s another thing. It’s going to change those risk factors dramatically. Yeah, I can see why with the two I can be [inaudible] cause it’s not. Hi, thanks for joining us for another episode of ask [inaudible] CPA Today Day as the empty business coach, we’re talking about business plan, risk reduction strategies, business plan, risk reduction strategies. I Have Laura from our office here again today. Lauren, how, how long have you been with us now? Uh, about a year. I bought a year or when’s that anniversary date? Do we know? August 13 August. So Rick coming up on a year like two more weeks. Right on. So the quote that we have here today to zig Ziglar quote, when he says, when you stop planning and preparing, you stop winning. And Industry Canada tells us that 15% of all businesses fail in year one. 30% of all businesses will fail by year two and 50% of all businesses will fail by year five. And you know, when it comes to risk reduction strategies as story that we see are most businesses that are either walking around with these rose colored glasses, you know, they, they’re thinking that business risk failure, you know, it doesn’t apply to them or they’re so terrified at the risks that they don’t look at the risk critically in develop logical risk reduction strategies with a Edmonton Business Coach!
So they don’t become one of those statistics. Now more, what are the questions that these business owners, you know, as it pertains to risk reduction strategies, what should they be asking? Do you like to examine the risks, effort, or examining the market trends and competitors? Yeah, yeah. So the first thing we like to do is, you know, first thing we want to do is what are the trends in this industry? You know, where is this thing going? Where are the opportunities and what are the challenges? Always both in every industry. It’s never one or the other. If you look hard enough, there’s always trends that are presenting opportunities and there’s always trends that are making it more challenging. So we look at that first and then we’re going to look at the competitors. You know, if you have lower and easy competition, that’s one thing. But if it’s, you know, stiff competition, that’s another thing. It’s going to change those risk factors dramatically. Is it practical to look at all the risks or do you examine the most significant risks? Yeah, there is no risk free strategy. There is no way that we can look at every risk and mitigate every single risks of what we want to do is we want to focus on the ones that are the most significant. You know, I like to ask clients is what are the things that keep you up at night? Those are, that’s what we really want to see is what are the things that actually keep you up at night? And that’s what we’re going to focus on because it’s impossible to tackle every risk. So let’s at the ones that are significant, how can you mitigate profitability? And cashflow risks.
So when it comes to the, you know, profitability and cashflow risks, a lot of times it’s just assembling reasonable projections, which are in essence, the reasonable projections become your budget and you have that budget with you can now stick to, as a business owner, you don’t want it. It comes through if we said it’s going to cost $100,000 for a new piece of equipment or to build out a leased space, we can’t spend $150,000 on that piece of equipment, piece of equipment. Um, you know, if we have a certain amount earmarked for office administrative help, that is our budget and we have to stick to it. So, you know, s mitigating those profitability and cashflow risks primarily come down to assembling reasonable projections, which is one thing, probably about one third of the battle. But then two thirds of the battle is sticking to those projections are here to help you as a Edmonton Business Coach.
What’s your, in essence, your budget? How can you mitigate the risks associated with being an inexperienced owner? So when it comes to being a experience owner, and this is hard to take as a lot of people who are starting businesses are, have a tremendous amount of experience in the industry that they’re starting a business in. That’s the common thing is, you know, they’ve been an electrician for years. They’ve been a plumber for years. They’ve been a dentist for years. But when you look at it critically, if you could have an honest discussion with yourself, a lot of times you’ll find out that although you’re very experienced, uh, in the, you know, technical aspects of your business, you are in fact in an experience owner. And you know, there’s a number of ways that we can do, we can mitigate those risks. Primarily it’s, you would still have to be learning, you know, people who are good at business or good at business because they are always learning a, they are always trying to learn what a Edmonton Business Coach can do for you!
And then you don’t want, another one at [inaudible] is coaching, coaching works, business coaching works. You know, um, you know, hiring a business coach. Sometimes that is the key. The best business owners in the world have coaches. Um, you know, the, the, the top level CEOs have coaches, top athletes have coaches, but often business owners, especially inexperienced business owners, are a little too stubborn to hire coaches and that’s what they need. So it’s, you know, primarily focused on learning, uh, continually learning and often having that objective outside of the business voice, uh, that keeps you focused and holds you accountable. How can you mitigate the risks of not being able to acquire enough customers? So in terms of acquiring customers, people, they’re always, you know, looking for a fat, you know, we’re gonna turn on the inflow of customers one month when we need it and turn it off. And, and that’s just not how it works in terms of generating business. It’s a longterm approach. You pick market initiatives and you pick market initiatives that are based on facts from people who have actually, you know, built businesses in, then we’re going to execute those marketing initiatives over time. You know, a lot of effective marketing strategies, even we’re talking about building out to an internet marketing campaign all of the Times. It’s gonna take six months or a year to get that thing and we’ll get all those wheels in that process turning that we’re generating consistent amount of leads from that. Um, so in terms of, you know, mitigating the risks of acquiring enough customers is often, you know, picking proven strategies and then, um, basically executing them consistently over time and not stopping and starting them. Make a point to call us now at 780-665-4949 as soon as you can! Also check out spurrell.ca when you are ready!
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How can we mitigate the risks of losing customers and pricing pressures? Yeah, that’s always going to be one, you know, customers [inaudible] in absence of value. Price is the only consideration. So if, you know, what was value, you know, Ken, years ago might not be as valuable today. There’s technological improvements. Your competitors are always getting better. So the only way to truly avoid those pricing pressures or losing customers is to always increase that value proposition that you’re giving customers. You can never rest on. You know, what the way you did it before. Um, you have to be working on the business and developing new templates, new checklists, new processes, new wow moments for your customers to build that value. Um, so the, you know, the, someone can’t just come along and offer them a cheaper price and they’ll jump ship. How can you mitigate legal and regulatory risks? Yeah. Legal and regulatory risks. They can be big and a lot of times what we have to do is, um, you know, we have to have proper legal advice. Often there’s contracts or agreements that we, you know, we want to send to a, uh, a corporate lawyer for review and give us some, um, you know, input on, on how we can structure our agreements and our day to day business operations to guard against those risks. Um, sometimes a lot of businesses have a, a high degree of, of um, injury and, you know, if they’re in some sort of sport or they’re running a gym or something like that, what can we put it on the terms of a membership that makes sure that if there is an injury that’s eventually inevitable due to the nature of the business, that the loss is not going to be catastrophic Edmonton Business Coach needs. Um, you know, having the, the proper insurance in place and sometimes diversifying against, uh, you know, certain regular certain income streams that are maybe really susceptible to a regulate regulatory change, making that revenue stream, you know, unworkable.
How can you mitigate product and service risks? So when it comes to like the product and services is more like both the, the obsolescence. Think about your product. You know, one day it’s not going to be uh, used anymore because a lot of times it’ll things with technology or um, style changes, people just don’t want it anymore. You talk about the, the guys who they used to put, you know that a coke bottle stucco on houses, I don’t know if you’ve ever seen that where they have that coke bought any of your shards of the bottle in the house. We ever thought this was a good style idea. But imagine if you’re that guy and all of a sudden you just resisted the fact that everyone is putting vinyl siding on houses and you never got into the vinyl siding. Well eventually you’re going to be obsolete. So you have to be continually improving your product, staying on top of identifying those market trends and you know, moving towards those market trends. You know, so we’re not, it’s not necessarily you’re flipping the switch and you’re going, you know, this way a hundred miles an hour and all of a sudden next year going this way, but it’s more you gotta be steering the ship. You know, the guy who probably that, you know, the successfully, he didn’t go from all bottle caps, you know, stucco to vinyl siding overnight. But slowly he started offering that in his product line. And then when that became completely out of fashion, he already had that other product line developed. And you know, that business probably transitioned very well. Uh, but you can see all this competitor who know, we’d only install the ball cap up. They have nothing to do anymore. They’re completely out of Edmonton Business Coach.
How can you mitigate supply chain? Yeah, supply chain risks are real tough and they come up quite often. More often business owners think, you know, let’s, let’s think about, um, if you’re a, a, um, a home builder and you’re not just building common homes, but you’re building log homes and you get all of these log homes from one supplier, now what happens if that supplier jacks up the prices on you overnight and all of your, your contracts are, are unworkable. You can’t make any money on it. And what if they have a fire at their plant? And this isn’t just in construction, a lot of businesses have a specific software that they’re completely dependent on, or they could have a medical product in the medical industry and there they’re selling that product line exclusively and something happens with them that pricing, it’ll sometimes the relationship sours and sometimes it’s just, you know, a complete, you know, we call it the act of God where, you know, they have a fire at their plant or a flood in, in, in a city that’s, you know, uh, three provinces away from you and all of a sudden you lose access to your main source of supplies that you have.
Just one. You need to diversify that. You need to start thinking actively who are the alternatives that I can use and you need to be sourcing them out before you need them. How can you mitigate human resource? So human resource, Ms Risk, it comes through eight. You have to have some, you know, some sort of recruiting strategy. Once you have staff, there is going to be turnover. You can be an absolute all-star in terms of trying to build culture and, and you know, make a, uh, a nice workplace for everybody. But at the end of the day, there’s going to be turnover that’s completely outside of your control. You know, people will decide that they don’t like that industry anymore or you know, you know, they’ll move away. Family circumstances will change. I’ll move away. Uh, people get pregnant, people get sick and, and there’s inevitable amount of turnover that’s going to happen with a Edmonton Business Coach.
So you have to have a recruiting strategy first and foremost. And then you actually have to have strategy in place to actually keep the people. Are you giving them, you know, regular input and feedback on to how they’re doing? Do you have a benefit plan in place? Are you actually trying to train them? So they become, uh, better employees and they can see progress and you know, development in their own career. Um, you have to have those things listed out of exactly what you’re going to do and then you could actually start to mitigate some of those human resources risk. So I think that’s what we have here today in terms of, you know, making risk reduction strategies that on your business plan, uh, as always, please at that like and subscribe button. So we continue to deliver your tips on how to beat the odds at in business. And as always, we love to read any comments that you have below. So even respond back and use your input for your future videos. Thanks very much. Please be sure ot call us now at 780-665-4949 or head over to spurrell.ca when you can!