Knee-deep in Business Plans

Things are well underway in San Mateo, with Feasibility Studies being the hot-topic this week. These evaluations are meant to give a snapshot of how the business will perform. It is a combination of most business concepts (costs & break-even analysis, 4 P's of marketing, administration & operations) and is something absolutely foreign to our potential clients in Guatemala. I believe this is the heart of a solid micro credit program, avoiding bad habits by the borrowers from the get-go. Basically through these studies we are attempting to see if the women can cover the interest rates on their potential loans and still have some profit to bring home to the kids. We’re having varying amounts of success and I'll tell you about two.

In one case a family seems to have the right mix of experience and motivation where we see the business as such a good idea we want the business to take off right away. This is with Dona Estella, and she wants to raise chickens. She has done it in the past with up to 600 chickens at one time, but the business went under due to an earthquake. Now they want to start again with 100 pollitos. I love people who know as much about their business as Estella and her family. Together the family could answer any questions about costs, operations or how they will administer the money. She is an ideal person for us, with her only real question being when to vaccinate the chickens. Luckily that will be covered in the Vocational training portion of the program.

In another case there's Dona Myrna, she's been making tortillas for about a year and wants a loan to buy a gas "comal" instead of using her wood stove. With Myrna we cannot be sure exactly what her situation is. Her business is mixed in with her house so her family usually eats all the profits in tortillas or burns it in wood instead of gaining hard cash. Either way though it seems that she only makes about 2 dollars a day doing this even with those earnings of what she consumes. From my perspective she obviously needs to raise her prices, this has happened in other cities and for one simple reason - gas prices. But everyone in San Mateo swears that can't happen. People simply wont buy her tortillas if she does that. She is now considering stopping making the tortillas all together. So then the question is what to do when promoting change conflicts with what people are accustomed to in a small village?

Well, people resist altering their daily habits no matter where they live and this has been a common feeling with several clients in San Mateo. As we get more and more into the role of Mentors with the borrowers I bet this will become a constant theme. But that is what the project is aimed towards: getting people to think differently about their business and hopefully plan before action with guidance through the process while implementing it. Either way these plans are getting ready to put into action. I'm just looking forward to having my own source of quality chicken now.