By: Jax, Chiu Man Lung
My first blog starts with the conversation with Lodi, the owner of the snack shop. Through Lodi’s response, apart from getting insights into the operation model of tiny businesses in developing economies, Angeline and I have figured out the shop’s challenges and opportunities. Last week, we were busy with these puzzles we encountered, trying to complete the whole picture of Lodi’s business. This is what we came for.
Puzzle 1: “Oh! Lodi has soft drinks for sale!?”
“Oh! Lodi has soft drinks for sale?” Hale was amazed. Hale is a loyal customer to Lodi’s shop. She doesn’t know there are soft drinks for sale even though she comes so often with her mum. This can be understood because all cold drinks are put into a refrigerator without any display in the glass-cupboard. It would be a loss because cold drinks are really big in this constantly hot tropical country. Not only drinks, during the observation in customer analysis, we also accidentally found that Lodi sold fried eggs when we saw an old woman asking for an egg for her instant noodle. All these findings provoke our thoughts to make Lodi a menu for her business.
In the very beginning, we wanted to use photos from Google for the menu, but we gave up because they look so different from the actual products Lodi sells. It is inappropriate to give customers fake images which induce expectation gap and disputes. Therefore, we took photos on her products one-by-one (and we had to finish all the food we ordered!).
Targeting the locals, I asked my host families to help me translate the content into Bisaya. We printed out three copies with lamination and put them on the tables. We observed that nearly all customers who sat down in the shop would take a look on the menu, and we did see some cases that people ordered additional food after reading the menu. The menu not only displays all products we are selling, but persuade customers to order more snacks.
Puzzle 2: The shop deserves an office name
I mentioned in my first blog that how hard we found Lodi and her shop. Lodi told us she couldn’t display her shop name or hang a banner because she hadn’t registered the shop name yet. She also said she was too lazy to go to the Department of Trade and Industry (DTI) for the troublesome registration process and make a banner.
We tried to persuade her to get an official name by telling its importance and benefits. We want the shop to own a brand name and reputation. It is easy to be remembered and attract new customers. To reduce her burden and provide her with incentives to register the name, I have designed a banner and save as soft copy. I sent it to her daughter via email so that she can use it whenever she is ready to start the registration.
Puzzle 3: How much do I earn?
Lack of accounting system is a major issue for tiny businesses. Lodi’s shop is no exception as I described last time. She is not sure how much she has sold, spent, and earned because she has no record-keeping habits. Every decision she makes and information she tells is based merely on her memory and experience. Not keeping track of her inventory and account balance leads to inefficient management of business. Therefore, we have designed a record keeping system as simple as possible for Lodi and her staff, Elsa.
We bought two white boards and designed a table on it with a permanent marker. We have listed out all products and the language is in Bisaya so that it is user friendly to local people. What Lodi and Elsa should do is just to mark in the corresponding cell when they sell snacks to customers. We avoid requesting them to write any words because the reason they refuse to do record keeping is that accounting is clumsy and time inefficient for tiny business. We also asked Lodi to calculate the daily revenues (it’s a very simple multiplication and addition and we had taught her about this). The white boards are reusable by clearing all counting entries every morning after jotting down revenue figures.
We also bought Lodi a notebook for marking daily revenues and all expenses and cost. We knew it would be hard for her to start from scratch so we demonstrated on recording some items first.
Puzzle 4: Stand out from competitors
There are four identical shops selling exactly the same products at the same price. Profit is limited if everything is the same in the market. Customers just choose randomly or depend on the relationship with the shop owner. Therefore, we decided to sell new products which do not require so much preparation and time cost. Additional profit can be attained from this without increasing the burden and workload on Lodi and Elsa.
I have discussed with Ann, who is currently working in Vicky Cookies, on cooperation between two shops. We choose cookie as a new product because it is long lasting and need no preparation at all. It also matches the shop that it can form combos or sets with some existing drinks like hot chocolate and Halo Halo (iced milk with fruits). We plan to buy cookies at 75 pesos per package (44 pieces) and sell at 9 pesos for 3 pieces or 12 pesos for 5 pieces.
Angeline is also having a conversation with her host family, who makes processed peanuts, about similar cooperation. Processed peanuts are packed into small bags as snack, which share the same nature as cookie I just said.
There is one week left before going back to Hong Kong. In the coming week, we are going to observe the implementation of the resolutions. If there are some difficulties encountered, we hope to solve them immediately so that Lodi would not give up the plan. We wish a sustainable development and improvement of this tiny business. It seems that Lodi loves the work we have done for her because she looked so delighted when we gave her white boards and the menu. She thanked us with free Halo-Halo (iced milk with fruits) and cake.
The whole working process makes me understand what is going on in a developing economy. I wound not regard this trip as a service trip because what I am doing here is to exchange ideas on operating business but definitely not saving the “poor”. At the same time I am also learning from their practice in business. I think there is no merits and demerits between operation model of developed and developing economies. What really matters is the suitability for the business and local culture.