In managing a business or a project, including in fashion designing, fashion entrepreneurs need to master some skills for them to relate better with clients and prospective ones too.
Dafiji Consults , a consulting agency that provides support and innovative solutions for projects and businesses, recently held a conversation and Question and Answer session on their Instagram live. The session was focused on Risk Management, and how entrepreneurs should find the balance between their peace of mind and profit-making.
Engaging Fola Olatunji-David, who is a business adviser and strategy consultant for Africa focused startups, here are some of the key points that were shared,
Business risk is the exposure a company or organization has to factor that will lower its profit, or otherwise. There are different types of risks in businesses, and some of them are;
Market Risk: This asks the question of who are you selling? When thinking of the risk in your business, you want to ask the question of what your customer looks like. In the post-COVID-19 world, people will be more miserly with their money. You have to understand why your customer patronises you. Whatever it is you were doing initially that helped keep your customers with you is something you should stick to.
Product Risk: This asks the question ‘What are you selling?’ You can either sell an existing product to a new market, a new product to an existing market, or a new product to a new market. The key thing is the trust element you’ve built, build off of what you’ve done before. You don’t want to build a new product for a new market, especially in this period.
Financial Risk: How much does it cost? Everything you do is a transaction. As a fashion entrepreneur, you need to ask yourself how much you’re pricing and how much to price so you don’t run yourself under. You need to apply unit economics to this, as well as adding transport fare, staff salaries, internet bills, and so on so you don’t run at a loss. The importance of understanding the financial risk in your market cannot be overstated, and one way to reduce this risk is to take on a bank loan.
People Risk: Many companies are letting go of staff and this means there’s a lot of fear in people’s minds. When you’re building a brand, it is important that the people you’re working with understand the core of your business. You have to think about who these people are.
Knowing these risks which are involved in businesses is important for any business owner as risks are unavoidable in business. Business owners need to come up with strategies to prepare for and lessen the effect of risks in their businesses. This strategy is referred to as Risk Mitigation.
How can people balance moving ahead and taking risks? How can people mitigate risks?
It’s great to be ambitious and want more from life but as an entrepreneur, however, you need to balance what is attainable and what you have and this comes from being self-aware. You need to be sure of your risk appetite and know how much risk you can handle.
“What is the risk impact?”, “What is the risk likelihood in every opportunity that comes your way?”, these are some of the questions an entrepreneur needs to answer. One can only build on risk appetite by being practical about risks, by being creatively practical as a business owner.
Knowing how to effectively manage risks in business would help a brand or business go a long way! And with this session, and previous ones on Customer Service, Marketing Communication, Financial Management, Dafiji Consults has been able to train entrepreneurs in business growth and various marketing strategies.