Day 19

Today we delivered the results of the surveys to La Blanca and La Fidelina. It went well. We discussed what the surveys told us and gave them our recommendations.

La Blanca
Per the surveys, we recommended La Blanca paint its store. Apart from the survey, we discussed cross-selling beverages while people are waiting for their meat. Mario, the owner, thought it was a good idea. We also told him we thought he should pass out some coupons in the morning to try to bring in some new customers. The interesting thing was his response, “none of the butcher shops pass out coupons” so he was not interested. It is really weird to see how they view competitive advantage so differently than we do. They almost act like there is something wrong with differentiation and competitive advantage and there is huge cultural barrier to convincing them otherwise.

This is us giving our recommendations to Mario from La Blanca.


This is the La Blanca very stocked up on meat!


This is the cow hide laying outside of the shop...this is where the meat came from...I still regret not taking a picture of the 8 or so stacked up that we passed on our way to church the first Sunday.

La Fidelina
Per the surveys, we recommended La Fidelina get a sign and add more tables and chairs. We also discussed some of her strengths with her as well. She was very receptive to the recommendations and said she would implement them.

Egg Man
We headed back to the office because we knew the Egg Man was going to stop by to make one of his loan payments. We used the opportunity to get the rest of the cost information we needed to run some numbers on his business.

After lunch, Tim worked on a Net Present Value and enterprise value calculation for the Egg Man while I created an income statement, breakeven analysis, and pricing and net income sensitivity table for A&B Fotocopias. After Tim’s analysis, we quickly discovered what a great business eggs are in this area. We are definitely considering eggs for a business in a box idea.

A&B Fotocopias
At five, we headed over to discuss the numbers with A&B Fotocopias. Byron, the owner of A&B, had increased his prices to Q.20 per copy, Q.05 above the competition. He had been seeing his business decline rapidly over the past 4 months. We discovered that he had included his fixed costs in with his variable costs and he thought his margins were only Q.01 if he charged Q.15. However, after running the numbers, we found out that his variable costs are only about Q.06 per copy. In creating a sensitivity table to generate net income for different prices and sales unit levels, we discovered that he should lower his prices down to Q.15 to optimize his income at the projected sales volume at each price. He was really happy with that analysis and we were happy that he understood the mistakes he had made in his calculations. He told us he was going to lower his prices and do some promotions to let everyone know.

Other

• I saw the biggest spider last night, thought it was a tarantula at first
• Danup = delicious
• Sorry, we were all business today, nothing overly fun or exciting stuff to report