Building trust & relationship with Lodi

By: Angeline Hong

Theme: Business Consulting

It’s the third week since Jax and I started consulting Lodi regarding her small snack shop business. Actually we only managed to talk to her for approximately 8 times although we visited the shop almost every day in the first week since we wanted to understand more about the business operations. Initially we thought she is really busy with personal matters, however after speaking to my friend, Hale who visits the shop often, apparently she is shy to speak to us in English. I immediately felt bad since our presence made her uncomfortable. Jax and I figured that we need to build a good relationship with her first before she would trust us with our recommendations. After identifying the issues, we visited her in the second week and with the help of Hale with translation, we managed to convince her to implement our recommendations for the business.

Recommendation 1: Building a Brand

Initially, we wanted to create a banner with an official display name for the shop so that customers can identify the business easily. However, Lodi told us that she needs to register the name with Department of Trade and Industry (DTI) before she can display the name. Hence, we designed the display name for the business and sent the soft copy to Lodi so that she can print it after she registers the name with DTI in the future.

Next, to allow customers, especially first-time-visitors to know every product offered by Lodi, we designed a menu for Lodi. Although Lodi already named every product she offers, we were surprised when Elsa, her employee served fried egg for a customer one day. “Ah, yes, we have fried eggs as well!”, said Lodi, this shows the importance of a menu to prevent loss of sales from customers who does not know the existence of certain products.

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Menu which was printed and laminated. 

Recommendation 2: Simple Accounting System

As Lodi does not keep records of her business previously, she does not know the profitability of the business. To encourage her to utilize an accounting system, we devised a simple recording system for her. As there is less than 15 snacks offered by Lodi, we decided to use a whiteboard to record the daily revenue. We created boxes for each product on the whiteboard with permanent marker and Lodi just have to mark the respective boxes when a product is sold. At the end of each day, she can transfer these figures into a record book we prepared with the layout shown in the photo below. For expenses, we also created a simple layout for Lodi to record, she will record the daily expenses in the same book. Then, she can calculate the daily profit. We hope that the accounting system is able to facilitate the preparation of snacks and provide insights about the profitability of the business.

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Whiteboard to record amounts of product sold. 

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Layout for daily revenue and expenses. 

Recommendation 3: Product Differentiation

In order to create a competitive advantage, we suggested Lodi to increase her product offerings to stand out from its competitors. With only the assistance of one employee, Lodi is pretty occupied with the preparation of snacks. Therefore, we identified snacks that require minimal preparation such as peanuts and cookies. As my host mother has a small peanut business, both the parties have agreed to cooperate and sell peanuts at the shop. On the other hand, since our classmates, Ann and Vish are working with Vicky’s cookies, we purchased cookies from their business. This can increase the revenue for the business without additional time costs.

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Promotion material for new products. 

Implementations

On the day we prepared the menu and materials for the accounting system, we left them in her shop and planned to explain to her the next day since she was not around. When we entered the shop the next day, we saw Elsa, her employee recording on the whiteboard which was already hung on the wall. I immediately expressed my excitement and Lodi said, “We are trying today, we will officially start tomorrow!”. I was happy to see Lodi willing to take the initiative to try even before our explanations. However, she was confused about the accounting system so we explained it to her and she was also enthusiastic to try it.

With the remaining days here, we will keep track of the progress of the implementations and evaluate the effectiveness of our recommendations.

Reflections

When I first learnt about Lodi Snack Shop, I was wondering what can we actually do with a business that only sells less than 15 products. I also pondered upon my ability to utilize knowledge learnt from university in a practical situation. After working with the business for three weeks, I realized that although it is a simple business and our recommendations might not be considered innovative, I believe our plan can bring positive impact to Lodi and her snack shop business. Lodi might be shy to meet us initially, we eventually built a good relationship with her. When she learnt that we will be leaving in a few days, she asked us to come back and visit and we also exchanged contacts to keep in touch. I definitely want to visit again to witness the results of our recommendations!

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