Archive for the ‘Hunter, Jacquelyn’ Category

by Jacquelyn Hunter

MBA Candidate ‘12

The businesses we work with as Proyecto Salta MBA mentors come in all shapes, sizes and locations.  Some of the businesses are operated directly out of the entrepreneur’s home, while others have multiple store locations. One of the entrepreneurs I work with has a profit of only 80 soles (roughly 25 dollars) per month, while most have sales between 300-1,000 dollars per month. The majority of the entrepreneurs we work with are located in the lower income zones of Lima like San Juan de Lurigancho or Manchay, but I also work with an entrepreneur that lives three blocks away from my apartment in the heart of Miraflores, one of the most popular high income and tourist districts in Lima.

Two of the businesses I worked with during my first month in Lima as a micro-finance mentor were definitely not micro-businesses.  Both of the entrepreneurs, Beatriz and Laura, have businesses that sell over 40,000 soles (roughly 15,000 dollars) per month.  Unfortunately, both of these businesses that are much larger and more complicated share many of the same problems and challenges as the smaller and simpler micro-businesses, such as the lack of an accounting system and formal business training .

Beatriz is the dueña (owner) of an unconventional business for a woman. She rents, sells and repairs construction tools from two store locations, has seven employees and has had her business for twelve years. When I first met Beatriz I was overwhelmed because of the magnitude of her business, the loud welding and drilling noises coming from the workshop, and the constant flow of customers in her store.  Until Beatriz, I had only been working with businesses a fraction of this size. Not only did she sell about 45,000 soles per month, she also wanted to start importing tools and accessories from China.

Laura and her husband own a backpack factory, small warehouse and retail store in a large market. They make thirty different models of mochilas and bolsos (backpacks and bags), have sales of 30-40,000 soles per month, and have eight employees.  Their backpack store is located in Peru’s backpack market, which I toured, that hosts 500 vendors of backpacks all in one location- talk about competition! When I first met Laura and her husband I was surprised when they told me of their plans to travel to China within the next six months to import materials and products. Although I had a great deal I could tell them about China from my recent module abroad in Beijing, I had not anticipated applying my Asia business environment knowledge with the micro-entrepreneurs during the Proyecto Salta internship!

After learning about both businesses, I had a lot of research to do in order to be prepared to help these businesses improve and grow. Most of our Proyecto Salta resources are for businesses in the 25-1,000 dollar per month sales range, but when you are selling over 15,000 dollars per month, like Beatriz and Laura, you need higher level resources.  It was shocking to see that both businesses had no formal accounting system except in the minds of the owners, who are surprisingly good at remembering their sales and costs. Although I was impressed with their memories, I explained that they could only continue the mental accounting system for so long.  Beatriz told me to tell it to her straight, “Jacquelyn- I want your opinion- tell me exactly what I am doing wrong and what I need to improve. I’m so busy all the time and so stressed out that I haven’t even been able to figure out what I’m doing wrong.”  My first words were, “You need an accounting system to improve the management of your finances, business software to manage your clients and contracts, and your workshop needs to be organized and inventoried- how can you find anything when you need it? Ninguna maravilla que seas tan estresada (No wonder you are so stressed out)!”

Both businesses had the goal of expanding to new markets and increasing sales.  They had the capacity but needed help with planning and marketing.  Before I could help them make expansion plans, they needed help getting organized. I told them that the last thing they want is to grow their business more “desorganizada”.

I really don’t know how Beatriz’s business had grown so large in its current state, but I do know I would be stressed out too if it was my business. So much of Beatriz’s time was spent trying to manage the day-to-day chaos of the business, she had no time for her family or growing the business. I told Beatriz if she wants to be successful and less stressed she needs to make an investment of time- one week to focus on cleaning, organizing, and setting up a business management system in order to create new and organized processes that will allow her business to grow profitably over the next 10 years.
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By Jacquelyn Hunter
MBA Candidate, 2012

Our first day of work as Proyecto Salta MBA Interns in Lima started with an orientation at the office in San Isidro.  While reviewing the important information we would need in order to start our work the next day, we discussed our schedule for the first week.  We would each be working with eight women entrepreneurs for the first month of the project, each with their own unique business.  My first group would include a variety of businesses such as bodegas, a manufacturer of backpacks, and an evening gown designer.  The only business I wasn’t quite sure about was my first appointment, an entrepreneur that was listed as having a “cubre-artefactos” business.  “Hmmmm,” I thought, “what exactly is a cubre-artefacto?”

The direct translation of cubre-artefacto is appliance cover, but unfortunately I didn’t have too much experience with the appliance cover industry.  I have never owned an appliance cover and probably never will, or so I thought.   But thinking back to my experience living in Belize as a Peace Corps volunteer, I did recall seeing some people covering important appliances or electronics in their homes, such as a microwave or stereo, with decorative fabric in order to protect it from the dusty dirt roads in the village. Usually the appliance covers used in Belize were old scraps of fabric that were draped over the appliance, but little did I know that with some creativity and quality craftsmanship a beautiful and funky appliance cover could be just what people need to spruce up their homes while at the same time gaining functional benefits such as protection from dust and damage.

Miriam is an artist, as I could tell from her passion for designing new products and her creatively painted one room home in San Juan de Lurigancho. Mariam learned to sew about 15 years ago and has developed her own products of appliance covers, furniture covers, dolls, curtains, and home accessories.  My favorite products are the pig and duck-in-a-dress blender covers (called “la chanchita” and “la patita”) and the matching kitchen towel holders.  Miriam has a small operation of three sewing machines that she bought with a micro-finance loan and she sells about 850 soles (roughly 300 dollars) worth of her products per month through direct sales to customers and selling her products at three local stores.  Miriam told me her products sell quickly and market stall owners in Lima Centro market had offered to sell her products, but that alone it was difficult for her to produce a large enough quantity to be able to sell in those markets.  Miriam’s dream is to build a workshop and store for her products by constructing a second floor on her home.  In order to build the workshop, she will need to pay off her current loan, increase her sales and take an additional loan to pay for the building supplies.  Miriam’s husband is very supportive and is willing to build the workshop for her if she is able grow her business and support the investment.
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By Jacquelyn Hunter
MBA Candidate, 2012

¿Cuál es tu sueño? is one of the first questions we ask when we meet the women entrepreneurs we will mentor once a week for four weeks. It is a question that usually leads to a long conversation. Most of the women will share ideas of improving and expanding an existing business with the purchase of new equipment or opening another store in a new location, while others have a dream of pursuing education in order to learn new skills that may open doors to new opportunities.

Diana, 27, is a young entrepreneur with a dream to be the owner of a successful business. Diana is happy to be single and with no children so that she can focus all her time on learning and growing her business. When I first asked Diana about her dream I got a twenty minute answer that included about fifteen possible new business ideas. Diana was motivated and full of ideas for the future, but like many people with a strong entrepreneurial spirit, she couldn’t quite decide exactly which idea to focus on.

During our first meeting I learned about Diana’s current business: two small stalls in a market where she sells dried goods such as beans, rice and flour, and also general goods such as toilet paper, cell phone minutes, red bull and toothpaste. I was impressed because Diana is one of the only women I am working with this month that actually has a functioning accounting system in place. I was even more impressed when I saw that she was creating a cash flow statement at the end of each month using the same model taught in the Salta Training.

Finally, I was happily surprised to see that she was paying herself a salary in order to keep the money in her business separate from the money she uses for personal expenses. The concept of separating business and personal money is very challenging for most micro-entrepreneurs due to the low and relatively uneven flow of cash in the business. I reviewed her notebook with her sales records and saw that she was making a small profit each month, but that overall the business was not growing. Despite her exceptional management of the business finances, she explained to me the two challenges of her business:
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