BBull on Nostr: **Expanded Risk Mitigation Strategy** --- ### **1. Currency Risk: Hedging Forex ...

**Expanded Risk Mitigation Strategy**

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### **1. Currency Risk: Hedging Forex Exposure**
**Risk**: Fluctuations in the ETB/USD exchange rate could inflate costs of imported equipment/products (e.g., Korean skincare devices, German hair tools).

**Mitigation Strategies**:
- **Forward Contracts**: Lock in exchange rates for 50% of critical imports (e.g., 1-year forward contract at 1 USD = 57 ETB with Awash Bank).
- **Local Sourcing**: Source 60% of products locally (e.g., besema clay from Sidama, coffee scrubs from Yirgacheffe) to reduce forex dependency.
- **Diversified Suppliers**: Partner with regional suppliers in Kenya (shilling) and UAE (dirham) to spread currency exposure.
- **Dynamic Pricing**: Adjust service prices quarterly if ETB depreciates >5% (e.g., add 3% surcharge on premium treatments).

**Example**:
If ETB depreciates to 1 USD = 65 ETB (15% drop):
- **Without Hedging**: A $10,000 equipment order jumps from 565,000 ETB to 650,000 ETB (+85,000 ETB loss).
- **With 50% Hedging**: Only $5,000 exposed, reducing loss to 42,500 ETB.

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### **2. Market Risk: Piloting Services Before Full Rollout**
**Risk**: Low demand for premium services due to price sensitivity or cultural misalignment.

**Mitigation Strategies**:
- **Phased Launches**:
- **Pilot Salon**: Open one location in Bole (Addis’s affluent hub) for 3 months to test pricing and service acceptance.
- **Service Testing**: Offer 5 flagship treatments (e.g., *Koba Hair Therapy*, *Coffee Ceremony Facial*) at 50% discount to 200 pre-selected clients. Gather feedback via QR code surveys.
- **Pre-Launch Campaigns**:
- **“Glow First” Membership**: Sell 500 pre-launch memberships (2,000 ETB each) for exclusive access, validating demand upfront.
- **Influencer Teasers**: Partner with 10 micro-influencers to demo services and share reviews pre-opening.
- **Agile Adjustments**:
- **Pivot Table**: If bridal packages underperform, reallocate resources to corporate wellness packages (e.g., UN staff discounts).

**Example**:
- **Pilot Results**: Only 40% uptake on premium facials (1,500 ETB) but 80% on mid-tier haircuts (500 ETB).
- **Adjustment**: Expand basic services and introduce smaller facial bundles (3 sessions for 3,000 ETB).

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### **Integrated Risk Management Framework**
| **Risk** | **Action** | **Responsible Team** | **Timeline** |
|-------------------|-----------------------------------|-----------------------|-------------------|
| Currency Volatility | Sign forward contracts for Q1 imports. | CFO | Pre-launch Month |
| Low Demand | Analyze pilot data weekly; adjust menu. | Marketing & Operations | Months 1–3 |

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### **Contingency Plans**
- **Currency Crisis**: If ETB depreciates >20%, shift marketing budget to local tactics (reducing USD-dependent campaigns).
- **Market Rejection**: Liquidate 30% of inventory via pop-up sales and pivot to budget-friendly “Boaz Lite” salons.

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**Conclusion**: By hedging 50% of forex exposure and rigorously testing services in Bole, Boaz minimizes financial and market risks. This agile, data-driven approach ensures resilience in Ethiopia’s dynamic economic landscape.