Are You A Good Entrepreneur? Watch this Interactive Video on Decision Making

You live in a big city. And when I say big, I mean one hour commutes home big. You work in an office of a big business. You're just one of those employees that make sure everything runs smoothly. You're a bookkeeper. You deal with numbers and finance all day long. You hate your job. It doesn't challenge you and it's very repetitive. You wake up. You go to work. You're stuck in traffic. You get home. You watch Netflix for the whole evening. Then you sleep. And then you start over and over and over again. Every single day is the same. Right now, you're in the middle of the city. The traffic has stopped and you don't even care why. It's a daily routine. You know you'll be there for a while, so you turn on the radio. Nothing interesting. Same old news. Every time you're stuck in traffic, you get some time to reflect on yourself. And you remember what it used to be like when you were just a kid. You reflect on the fond memories. Life was a lot easier and happier, you recall. Your father used to own a bakery shop where you'd help him make and sell bread. You used to live in a very small town. It had nothing to do with the place you live in right now. You actually loved baking bread. You loved the smell of fresh bread and you enjoyed the process. You're asking yourself what went wrong and why you haven't pursued that path. I mean, you are making good money, but it's just not fulfilling to work for someone else. That night, you decide you want to open a bakery, but not just any ordinary bakery. You want to take it to the next level. You want to be the leading producer, seller, and provider of bread and cakes in your city. That's a pretty big ambition. There are many competitors, many restaurants, and many problems you'll encounter. But you want to break the routine and start an adventure. This is the beginning of your entrepreneurial journey. And this is an interactive video that will challenge your entrepreneurial decision-making. It's simple. You follow along with the story and when certain decisions are to be made, you'll be asked a question and you'll be provided a couple of options. You'll get some time to think about it and then I'll tell you which one is correct and why. This will be very educational and you can't cheat, so no looking through the comments to find your answer. Keep your score and enjoy. So you're just starting your bakery and you're laying down your business plan. You have about $15,000 in savings, which is enough to start a small bakery in a small town. But this is a big city and you want yours to be placed in an area of interest where the location will work in your favor. You estimate that you'll need about $20,000 just to rent the place, get the documentation, and purchase basic equipment for baking your first products. You also need an additional $5,000 for initial marketing and $10,000 to personalize your sitting or dining space. You want it to look good, so you also hire a designer with taste to give it that comfy coffee shop vibe that you're looking for. That'll be another $3,500. Other costs amount to another $5,000, like your first employee and more bureaucracy. So the estimated amount you need to get started is $43,500. You only have about 34.5% of that, so you need a loan from a bank. But there are more costs if you want to invest in a bigger business and get more done. So you need to talk to the bank. Before you can do that, you need a business plan. This will include your vision, all costs, and obviously your strategy. Now, in order to grow, you have two options. Option A. You could start just as an ordinary bakery cafe. You get your goods cooked at night, and you'll sell them in the morning for breakfast and during the day. So you will mainly sell treats, cakes, and coffee to locals. This keeps your necessary capital at $43,500. You already have $15,000, so you'd get a loan for $28,300. B. You could ask for more money and start selling bread to restaurants and other coffee shops. This would drastically increase profits and provide predictable revenue, but on the downside, it requires another $20,000 for the machines, vehicles, employees, and certifications. This would bring your necessary capital to $63,500. Again, you already have $15,000, so you only need a $48,300 loan. So which one will you choose? Start as an ordinary small bakery cafe, which is safer, or sell massively right away, with a higher risk? Done? Good. The correct answer is B. You should get a $48,300 loan, assuming that you know what you're doing. The market is very unpredictable, but when you get some deals with restaurants and other shops in your city, you basically get a guarantee that someone will purchase your products. For example, you might make a contract with a restaurant to provide them with fresh bread every morning for $10,000 a month. This would make it easy to make a profit on all your costs, and since you're in a big city, you could find a bunch of potential clients that would boost your revenue by a lot. Now you have your basic plan laid out, but there's one important thing missing. What type of products will you serve? You live in a young city, a modern community, with a lot of trendy shops and areas that are popular all over social media. Being trendy and interesting is important, and that's why you're going to hire a designer to help you out with style. But what about the actual food that you'll sell in the cafe part of your bakery? You've got two options again. Option A, sell all main bakery products, muffins, brownies, all widely known cakes and bread. Or option B, sell hyper-specific products with basic selling points like gluten-free or flour-based. So, what will you choose? Before you answer, consider that you live in a big city with a lot of people, tourists, and competition. What have you chosen? The correct answer is B. Let me explain why. If you have a lot of competition, this means that all the main bakery products are already being sold by other bakeries. You can't succeed selling the same things because you'd have no competitive edge. Also, if you become very specific and interesting, you'll get the attention of tourists which will come to your cafe to try something new. And that might be anything from making chocolate-only products for breakfast to only cooking gluten-free products. A couple of months go by and you decide to quit your job. You got your loan, you got your location, and the bakery is almost ready. The designer is working on the last couple of details. However, you still need to hire some people to help you with your delivery service and cafe part. You need to hire three people. One of them will help you bake your products, the second will take care of delivering bread and products to restaurants and shops on time every morning, and the last one will serve the cafe. You, on the other hand, are going to do a little bit of everything. You post the job opportunity everywhere on the internet. You even attach some flyers around town. You want to get as much choices as possible, so you interview almost everyone, independently of their experience. A friend of yours will help you with the delivery. You trust him and you'll give him this job. Then you also find the baker who's going to work at night for the products to be ready in the morning. Now, you need someone young to be the face of your bakery cafe, and you narrow it down to two choices. Two beautiful young ladies, same age but different characteristics. A. The first one has already worked as a maid in a hotel, and has worked summer jobs in cafes before. This means that she has some experience, so you won't need to train her. She's looking for a full-time job, so you'll get some good experience for your money. She doesn't have social media. B. The second young woman has no experience whatsoever. She's never had a job, but she is very ambitious. She runs a YouTube channel on cooking, and she wants to become a chef one day. Right now she's looking for a job to sustain all her expenses. She also has a mediocre social media presence. Now, before you choose, you must consider that this is a big, trendy city. It is fast-paced, the coffee shop might be challenging to manage at times, even if it is small. This is a very important role, as the person that you choose will have a strong impact on your image, your brand, and how likely people are to return to your cafe bakery, which will make up about half of your profits. Take your time. Done? Good. The right choice is B, again. The reason is simple. Even if she doesn't have any experience, she can easily learn how to manage a small bakery. However, you can't learn attitude and aspiration, so the first lady might not be the best choice if you're looking for progress. Also, the second person has a social media presence, which is very important, especially since the city is trendy and full of tourists all the time. This will help you with marketing. This is your last decision for this video. You're almost ready to get started. You got the staff, the place is ready, and you have about $6,000 left for your marketing campaign. In a big city like yours, that's not a lot of money, so you're trying to choose between a disrupting mall type of campaign or a social media campaign. The first one is basically handing out flyers and free samples of your products in a mall. This will cost you a lot of money, but a lot of people will know that you exist. The second option is an Instagram advertising campaign, where you'll tell people that are in your city to come and try out your baked products. So the options are, option A, handing out free samples and flyers in a mall, and option B, social media marketing campaign. Well, the thing is, there isn't a very specific answer to this one. Both will work in different ways. With the first strategy, you'll be known by the locals, while the second one will mostly reach tourists and people that are passing by. In the long run, option B might be better because people will probably share pictures and their experience in your restaurant on Instagram, where they found you, which will generate a lot of credibility with time. But there are a lot of marketing strategies that you could apply to make the bakery cafe a success. If you have any other ideas, I'd love to hear them. Also, let us know how many answers you got right and if you liked this format, and also if you'd like us to make another one. Now you need to watch this video, Why Take The Risk? Job Security vs Entrepreneurship. This will give you a deeper perspective on entrepreneurship and why you should pursue it while keeping it real, since it isn't easy. Then this one, The Entrepreneurial Journey of Richard Branson. Well, I hope you guys enjoyed the video, and if you did, give it a thumbs up. If you are new to the channel, here on Practical Wisdom, we post great informative videos every other day on topics such as finance, entrepreneurship, business, self-improvement, and so much more. So subscribe if you are interested. With that said, have a great day you guys, and I'll see you all in the next one.