I had the privilege of re-connecting with a young Cambodian social entrepreneur we’ve known for some time while visiting clients in Phnom Penh recently. We have known Win (from Winnis Coffee) for many years, as he had been part of the Entrepreneur Life program we ran several years ago when we lived in Cambodia (delivered via our business, Future Now Enterprises Co. Ltd).
Win has a genuine interest & passion for great coffee – a man after my own heart! So, it was a real treat to hang out and talk about how things have progressed with his vision of a coffee business with a strong social purpose. Since the early days, Win has now married, he’s transitioned his business model, received good mentoring inputs, and now both he and his wife run their Winnis Coffee (roasting/wholesale and Cafe) business in Phnom Penh. Their vision is to grow to become a significant sustainable coffee bean sourcing /wholesale and Cafe business in Phnom Penh. Currently, Win sources his coffee beans through a small but trusted network of farmers in Vietnam and Laos – with hopes of setting up his own small farm in Cambodia in the future. Win has is own roasting operation in Phnom Penh already – from here he packages up bags of Robusta and Arabica beans for sale to Cafes around Phnom Penh city. As Win’s continues to develop /refine his business model, he’s finding there are four potential revenue streams emerging:
- Direct cafe sales – hot and cold beverages to cafe customers;
- Sales of pre-packaged roasted coffee beans to business customers and individuals;
- Offering ad-hoc training in coffee management/ barista skills – targeting small Cafe’s in Phnom Penh;
- Event catering – Specialising in events, conferences and weddings.
Interestingly, as we talked with Win he mentioned a number of frustrations that we see as typical of most small businesses on the journey of growth: finding good staff, training staff in quality service, improving marketing & growing sales, managing cash flow, and attracting investors to enable his dream of starting his own coffee farm in Cambodia!
We spoke quite a bit on the issue of investors and whether or not they needed to develop a formal business plan. They asked my thoughts on how best to prepare and attract potential partners/investors and what type of business plan is best. I passed on a few practical tips that I tend to cover off with similar small business clients and thought that it would be worth sharing more broadly! So, what are investors looking for when they’re seeking out potential social entrepreneurs to invest into?
Principally, social impact investors want to fund individuals who can show the right leadership and management capacity to scale up their concept, and who can achieve a level of early stage growth without compromising social outcomes.
Typically, social impact investors will want to answer the following questions:
- Does the founder have the right mindset? Can they lead a business through early stage growth? Do they have capacity & commitment to stay the course?
- Can I work with them? Is there a complimentary fit of values, vision and a strong bias for action?
- Does their business model allow for growth potential? Can the business achieve a realistic return on my investment?
- Can the founder/ entrepreneur attract the right team to deliver on their vision and aspirations?
- Lastly: Show me the money! What consistent revenues be generated to sustain the business? What level of profitability can be expected?
In my view, these days – most impact investors will gloss over a formal / detailed business plan, or at the very least – just “cherry pick” their way through it!. Most impact investors want to go straight to the heart of seeking answers to the above questions and may also want to get more of an impression regarding the calibre of the individual (the primary founder / entrepreneur), as this is all about taking a leap of faith on a trust journey. Although I don’t discourage emerging social entrepreneurs / small business owners from taking the time to develop a formal business plan, I am a big believer that a solid business model, the right leader, capable team and showing you can achieve solid financial performance – are really the keys to attracting impact investors these days.
My time with Win and his wife was really encouraging for both of us. I was stoked to see them still pursuing their dreams (it has been almost 5 years since we last connected!) and encouraged by their passion and commitment to explore new ideas. They were encouraged – gaining some new insights and some down-to-earth perspectives about how they could position for growth. If you’re ever travelling through Phnom Penh city – make sure you check out Winnis Coffee (https://www.facebook.com/WINNISCOFFEE/) – they do an awesome brew!!
If you are a small business owner with a passion and plans for growth like Win – I would love to have a chat with you about how we might be able to assist you achieve your dreams. We offer a FREE 1-hour strategic consultation for prospective clients in the SME or NFP sector. Email: [email protected] OR Call Mark directly: +61 439 221 430.