Day 20 through 22

Day 20
Today I spend some time finishing up a presentation I am going to give to President Donis and Leonel on Friday regarding the proper way to flesh out a good business idea. It is from concepts I learned in my Managing New Ventures class taught by Nathan Furr. Awesome class.

I also spent some time creating a spreadsheet for A&B Fotocopias to use in analyzing their pricing. It included an income statement, a margin analysis, and a sales units to price matrix with profit as the result. When we delivered it to them it went really well. We gave them a copy of the sensitive spreadsheet so they can make adjustments to fixed costs, etc. and it will change the rest of their figures automatically.

I don’t remember what else we did. Should update this every day I guess.


Day 21
Today I spent some time working on our reports and recommendations for CFH and for future interns.

We had to stop by A&B today to use photoshop and they had already implemented our pricing suggestions! They had big signs announcing they lowered their prices from Q.20 to Q.15. It was awesome. They were so happy that we had helped them and so gracious about it.

We also met the owner of Mani Ricas today named Julio. He sells coconut treats as well as flavored peanuts. He was very distressed because another guy has been coming in and stealing all his business. He said the other guy has money from another business, has hired two sales people who are undercutting his prices, and he is going to go out of business.

We started asking him questions about how much he sales at his current price point, what are his variable costs, what are his fixed costs, how much he could sale at various prices, etc. We then ran a demand curve and figured out the optimal price point. Well, it was really interesting because he had refused to drop his prices from Q10 to Q9 because he thought he would not be making enough money. However, we discovered that he would actually be making more income at the Q9 price point. The other big concern though is that the other business will lower its price in an attempt to put him out of business. We strongly encouraged him to work on his branding and gave him some recommendations on how he should do that.

We went to a TAE in Samayak tonight. Afterwards, we had the focus group for La Abuelita. She came with us and prepared the café and then delivered it to the people. Then we kicked her out and held the focus group. We gathered data on each person and then asked if they liked the packing, the taste, would they buy it, for how much, what would they change, etc. It went really well. We have some solid recommendations to give to Norma. Oh, and I bought 2 bags of café de cereales from Norma too.


Day 22
This morning I delivered my Presentation to Donis and Leonel on some concepts learned in my Managing New Ventures class. It went pretty well. The idea is to discover new products the solve market pain instead of just starting “me too” businesses.

We spent most of the day tying up loose ends, working on paper work, and planning follow-up stuff for the office here to take care of.

Going home tomorrow! Can’t wait to see my family!


Other

• We decided if something is cool it is “bien Donis!”
• Grandma Wilson passed away on Wednesday…she was a great lady, I will always have wonderful memories of her and she will be missed greatly but I am glad she is in a better place
• We’ll see if I make another post when I get home…check back...if not, thanks for reading!
  

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
  

Day 16 through 18

Day 16

Antigua
On Saturday we got to take a trip to Antigua. It was really cool. The Spanish made Antigua the third capital of Guatemala in 1543. It is at the base of the Volcán de Agua (Volcano of Water). There are two other volcanoes surrounding the city, the Volcán de Fuego, and Acetenango. Antigua was the capital until 1776 when it was moved to Gutatemala City due to various earthquakes, which had destroyed the town. All of the buildings are very old and in Spanish style. It was really cool, here are some pictures:


Egg Man
On our way back from Antigua, we stopped and visited with a guy who started his business through a loan from the Cause for Hope. He purchased 75 chickens for Q55 each and will sell the Q.80 each. Each chicken should produce an egg each day. They will lay eggs all year. At the end of a year, he can sell them for meat and get Q50 per chicken. We haven’t run the numbers yet but looks like a great business. Produce revenue and profit all year and then recoup most of your initial investment. He figures his margins are about 50% after feed costs, etc.

Day 17
Church today, no earthquakes…

Today at church I understood 99% of everything, which was a really big improvement over the first Sunday here.

Day 18
Big day today, we got a lot done.

La Abuelita
First thing this morning, we went to visit La Abuelita. Tim did some sales training involving customer segmentation and sales goals. For example, if it takes 50 contacts to get 10 people to try the café and for every 10 people, one purchases, so you have to make 50 contacts for every sales. Tim taught her to track the data so she will know the real numbers and be able to set goals for contacts made. And it is all, of course, based on how much she wants to earn. We also talked quite a bit about getting her wholesale division off the ground. Good stuff.


Surveys
After that we stopped by and got the surveys from La Blanca and La Fidelina. They were great! We got 26 from La Fidelina and about 20 from La Blanca. We came back to the office and entered all the data into speadsheets. We found out some really interesting stuff. For example, we tried to tell La Fidelina that she needed a sign. She didn’t want one. However, the main suggestion from her customers is that she puts up a sign. Shocker!

Store on the floor
This afternoon we went to “Store on the floor” to give some suggestions Tim came up with regarding tracking which items are selling and which are not. Hopefully he will try to implement the idea.

A&B Fotocopias
Last, we went and talked with A&B Fotocopias. We spent about 30 minutes discussing all of their fixed and variable costs. The owner really didn’t understand the difference and has been pricing his copies based on a variable cost that includes the fixed costs. We ran a little monthly income statement on the spot and got all the information we need to run breakeven analysis and perform some sensitivity analysis on his revenue and income using different volume assumptions at different price levels.


Other

• I love my Grandma Wilson; I was glad I was able to talk to her the other night and wish I could be with her right now.
• Peter Drucker - "Plans are only good intentions unless they immediately degenerate into hard work."
• Guatemalans drink a lot of stuff out of little bags, a lot of soda pop from the side of the road and even milk from the store.
• The power has gone out each of the last 2 nights, last night for 3 hours, tonight for 15 minutes.
• It rains here every day in the afternoon…it is almost winter here. The rain is worse than anything I have ever seen by far and the lighting and thunder is CRAZY!
• I am starting to say things in English that only make sense in Spanish…like “the food is not falling good with me”
• On Friday, we saw and heard a marching band in Reu playing “beautiful girl” by Sean Kingston...my dad will be happy to know that the people in Guatemala are also fans!
  

Day 14 and 15

Day 14

I feel like being brief for day 14 so here it goes:

Today we visited with La Libertad pharmacy. Got all her revenue figures for the past year and a half. Tim ran a stats program on it to see the trend in her revenue. We will share the results with her and talk about what she can do to improve revenue projections.

After that we stopped by La Fidelina and La Blanca. Neither had done anything yet on the surveys. We decided that we were going to have Leonel go do them.

After that we spent some time planning. We have now visited 13 companies and are actively working with 11 of the 13. The other two really just aren’t interested in us trying to help them. We have mapped out an entire list of things we want to accomplish with each of the 11 companies and we are working to get everything done.

Went to the second TAE (Taller de Autoempleo) or Presentation on Self-employment in Sameyak tonight. It went pretty well. I feel like there are not enough basic business principles being taught in the TAE and we will make some recommendations on that to the Cause for Hope.

Day 15

We stopped by La Blanca to help do the surveys. We decided to leave Leonel there to do them and then have him head over to La Fidelina around lunchtime. It was a good decision because we got almost 20 surveys per business. This should help us make decisions about what can be done to improve their business.

After this, we headed to San Antonio to see the “Store on the Floor” as we are calling it. However, there is a fair in town so his normal spot was taken and we couldn’t find him. This has been another issue we have had to deal with, hardly anyone has a phone so we just have to stop by and hope they are there.

Takalik Abaj
After he wasn’t there, President Donis asked us if we want to see some Mayan ruins. Well who wouldn’t right. So we drove about 15 minutes to Takalik Abaj. It was awesome. The pictures really don’t do it justice. It is way cooler when you can see how all the temples and buildings form a big plaza type area. Much of the upper area is under about 5 feet of dirt that came from a volcano eruption. They have discovered many more buildings and temples and are currently uncovering them. There is also a Mayan sports arena that is being uncovered which we were not allowed to take pictures of. Just about everything the guide showed us was dated between about 300BC and 200 AD. Different statues in the same area were from different eras and people or, in other words, different tribes or groups were occupying the area and would add statues from different cultures or beliefs to the existing area. Pretty crazy. It was extremely awesome to be there and to see it all. The only thing that would have been better is if the tour was in English! It was hard for me to make out some of it, especially when the guide was saying the Mayan words and talking about the hieroglyphics.



Above is a wash area that was used before going into the temple.

Sculpture of a crockodile head in front of the temple.

This is a water chute.


We got back to Mazatenango and ate lunch. After lunch, I called Disory to see about having him design a logo for Granizadas Delicias. He is going to have a work up for us on Monday.

EOQ
Fortunately, shortly thereafter the owner of the “store on the floor” showed up at the office here. He drives to Guatemala City to get the bags of items he sells and we wanted to help him minimize ordering and inventory holding costs. So I spent about 30 minutes getting the information we needed to run an Economic Order Quantity (EOQ) for him. After that, Tim and I ran the EOQ. Currently, he is buying about 30 bags of inventory on each trip. The EOQ told us he should be purchasing about 75 bags each time. When we explained to him that he should try to purchase 75 each time, he explained to us that his little truck could only carry about 40 to 45 bags. Well, we did the work anyway. If he ever gets a truck with more capacity, he will really be able to minimize his costs.

Other

• Howard Stevenson of the Harvard Business School once defined entrepreneurship as "the relentless pursuit of opportunity without regard to resources currently controlled."
• Everyone stares at us everywhere we go and often times the girls are checking us out and sometimes start saying stuff…they must think we don’t speak Spanish…
• I have been sick again, took another bug bomb, don’t feel as bad this time as last
• I am always dehydrated, no matter how hard I try
• We are going to Antigua tomorrow! (look it up)

Day 13

This picture is from yesterday...this is La Fidelina

Datsun circa 1978
This is the car of Leonel...this is the car we were cruising in today! I think I am going to show him how to replace his brake pads tomorrow...to help him out and so we don't die. No seat belts by the way.


Tienda Carmen and the Work
Today we went by and talked to Tienda Carmen about her piñata business. As usual, there are like three other piñata shops in the same little area. On top of that, her location is the worst of the four. Her items look pretty good. She makes them all herself during the day and after hours her son helps her keep working. She sells her piñatas for Q25 (about $3), which seems ridiculously low to me. But I guess that is what happens when you literally have perfect competition. Also, she doesn’t have a sign or a logo or any type of branding. She is only competing on price, which is about the worst situation for a business. We took pictures of all of her inventory, got them printed out, and then made a little picture book of her stuff. We would like her to take pictures of all her different piñatas as she makes them so she will have a full portfolio of her work. That will allow people to choose piñatas for her to make when she doesn’t have them in inventory.

We also worked with Granizadas today on her sales goals and gave her a sales tracking sheet to use for the next week. I feel really bad for her. She is averaging 10 snow cone sales per day which means her revenue is only about Q45 ($5.60) per day. She needs to be hitting about 16 snow cones per day to pay her loan, pay for her business costs and make money to live off of. We are planning to make her a customer loyalty card. We're not sure if it will work or not but figure it is worth a shot.

We spent some time training Donis and Leonel on capital budgeting and net present value calculations. It seemed to go pretty well. To help them implement it for analyzing the businesses before they give them the loan, we are going to make an easy template where the just enter the inital outlay costs, the revenue, expenses, and cost of capital and it will do the net present value calculation for them. Hopefully they will implement it and it can help them.

Torta Cubana
I had the worst food of the trip today. We went to a Cuban/Mexican torta (sandwich) place. I have eaten a fair number of Mexican tortas and they have all been good (usually steak with avocado and cheese). The guy came to our table to take our order and Tim asked him what was the best thing on the menu. That was our first mistake because I have come to realize that Guatemalans tastes on certain things are very different from ours. Anyway, he said the Cuban torta mixtas. We told him to bring us that not thinking too much about what was on it etc. Well, it was a mix (hence the term mixtas which I don’t think is really a word, the word for mix is mezcla) of hot dog, bologna, ham, and chicken, ketchup, tomato and with tons (and I mean seriously half a jar) of mayonnaise. It may have been one of the worst things I have ever eaten. It was the most expensive item on the menu by the way…a whopping $2.00!

Shoe Shine
While we were out today, we were approached by a couple of kids about a shoe shine. How much? Q2 ($.25). Okay, for 25 cents, sure why not right. Get a shoe shine and more than anything, help these kids out. I felt like a pretentious American though while there were doing it. We acually paid them each Q5. They were pretty happy for the big tip!


I couldn't help but think of how ironic it was, this poor kid had the biggest holes I have ever seen in shoes and his little business is to shine shoes. If you click on the picture to open it bigger you will see how bad his shoes are. I felt really bad for them.

Tonight when we went to the Self-employment meeting (the first meeting to help people start thinking of businesses to start), we met a man that is 105 years old named Jaun. Had to take a pic. He didn't shake our hands, he hugged us! He was a little hard to understand but he was the nicest old man.


Other

• Met the rooster lady's daughter today...she said they killed it an ate it yesterday...I was pretty upset ;)
  
• There are giant stink-bug ants everywhere
• A guy fixed our shower and toilet (it was bad), our lives just got so much better
• I am really thankful my grandma's surgery went well today
• I love seeing and talking to my wife and kids on skype!
  

Day 8 through 12

Sorry it took me so long but I'm finally back

Day 8

Last Friday was Labor Day here in Guatemala, which means most businesses were closed. We stayed in and tried to get some work done in the office. It got pretty boring.

Day 9

Today President Donis, Tim and I visited El Lago de Atitlan (Lake Atitlan). We left around 8:30 am and it took about 2 hours to get there. It is a beautiful drive as you climb up the mountains toward the lake. As you get closer, you start to see more and more indigenous people. There are 12 pueblos around the lake that are inhabited by indigenous people. The people here in Guatemala, and most experts (from what I can tell from reading online) seem to think this lake is the location of the Waters of Mormon (see Mosiah 18). The lake is surrounded by 3 volcanoes.

We stopped at two lookout points to see the lake and take some pictures.

At each lookout point, kids and adults selling indigenous handmade items mobbed us. I am either a bleeding heart of a big sucker and they must have sensed it because I got the worst of it by far.
By the way, this is a full-grown woman with a baby in a sling on her back and no, I have not grown substantially since I left.

Anyway, we continued on to the lake. It is really pretty as you drive down. However, I was disappointed to see the trash and pollution in the water once you get closer. Based on Mazatenango and what I have seen here, I was not really surprised.

We sat down to eat lunch and the parade of saleswomen continued. These people are pros, especially a few little girls in particular. I was amazed at how well they sold and negotiated. (It is hard to negotiate with someone when they are selling beautiful handmade stuff for dirt-cheap and you feel bad for them). Anyway, I was the sucker again.

This girl was an amazing salesperson. After she sold me a bunch of things, she is getting all her stuff loaded back up. You would not have believed how much she could get packed onto herself. I bet she could not have been older than 11 or 12.

We then went around to some of the little stores and bought some cool stuff to take home. I won’t post any pictures because I want it to be a surprise for Candy and the kids. The lake totally had a Lake Tahoe feel to it for me. Climbing the mountain to get there reminded me of going up Mt. Rose and then dropping down into the lake. Even around it with the stores and a bunch of white hippies (go figure)! It was like the Latin version of Lake Tahoe, except for the trash in the water. Overall, it was a great experience.

Day 10 – Earthquake!

Ok, so today at church we felt a huge 6.1 earthquake….my first earthquake.

http://news.yahoo.com/s/ap/20090503/ap_on_re_la_am_ca/lt_guatemala_earthquake;_ylt=Ao430Q0t5sjX1HAQxM999pVvaA8F

Apparently it was really deep so it would have been a lot worse. But we were really close to the epicenter, we are guessing within 15 miles of it. It was crazy, first my chair was shaking, then the building was shaking, then I felt an extremely powerful force sort of ripple through the building from my left to right. I was kind of disoriented afterward for 5 to 10 minutes or so. It was powerful to say the least.

Day 11 – Work, another power outage (when we got home from shopping for a week’s worth of food, lasted about 2 hours), raining like crazy, and another power outage later in the evening…

Today I visited La Fidelina and La Blanca to see if they were willing to pass out surveys to their customers. I also spent about a half hour with La Blanca going through some breakeven analysis and a payback period on an electric knife that he was considering buying. So after the analysis, we figured out that he should not buy the electric knife. I figured it would take him an extra Q75K ($9.4K) in sales at his margins (about 11%) or at least 3 years in payback.

Tim went to see a guy who imports and sells toys. Since they decided not to give themselves a business name, we are calling them “store on the floor” because they just have toys strewn about on a tarp. We are working on some ideas for him.

I feel like the organization needs to do a better job training the people before they get their loan. I think they need to spend more time on business name and logo (some don’t have a business name, hardly anyone has a logo), the location, and especially in proving out the market.

Day 12 - I can't get any of the pictures from today to load...maybe tomorrow

We had a pretty busy day today. We stopped in and talked with Disory, worked on getting third party credit set-up for VIP, passed out the customer surveys to La Blanca and Fidelina, stopped by to make sure they were having customers fill out the surveys, stopped by a Photocopy shop (don’t remember the name…B&D Fotocopias?), and stopped by La Libertad pharmacy.

Today we met with Nehemias from Disory. We discussed the five forces with him and explained to him his competitive advantage. We encouraged him to raise his prices. He told us he decided to raise his prices last week and so far there has been no drop-off in sales.

As I mentioned, we also stopped by a photocopy shop. It is actually owned by the family of Leonel, the assistant to President Donis. I noticed that they had an entire glass case in the front. But instead of selling stuff in it, they just have their stuff tossed in there. I told them they should use that space to sell staplers, staples, pens, hole punches, etc. while they have a captive audience waiting for their copies. Obviously pretty basic stuff but could really boost their sales.

Other

• Earthquakes are really cool if there is not damage, injuries or deaths
• Sweating all day is fun for the whole family!
• You are not supposed to leave toothpicks in cake, they could hurt somebody
• Telepizza, despite the name, is good stuff
• There are flying ants landing on my neck and going down my shirt as I type this
• Tim Hart is really good at the air guitar
• Tim Hart is really smart…don’t believe me, just ask him
• Talking in someone on the phone in Spanish is hard

Day 6 and 7

Sick
I started to get sick yesterday morning. However, I thought I started to feel a little better in the afternoon. But yesterday evening, I started to feel sick again. Because of this, I took what I call a “bug bomb” or a pill that is supposed to kill parasites. I don’t know if I just got sicker or if this is how the parasite pill is supposed to work but I got REALLY SICK. I was in the bathroom all night last night (we’ll leave it at that). Fever, achy, weak, dizzy, lightheaded, sweating like crazy. I soaked through my pillow. I woke up extremely weak. I drank Gatorade and finally ate a cup of noodles at 2:30 pm. It appears the worst has passed…we’ll see how tonight goes. My kids think I have the pig flu.

Five Forces
I have to start by saying that any of my fellow MBA classmates are going to laugh at this. But one of our jobs here is to train the local office on how to train the businesses for success and how to decipher a good business plan from a mediocre or bad business plan. From the work we have done, it appears that there are a few businesses that probably shouldn’t have been started in the first place. To help manager in deciding which businesses to fund, we put together a presentation of the five forces. Well, Tim did most of the presentation since I was sick but I also gave input throughout. We also used the five forces to analyze a business plan that was just received by the office as well as a couple of the businesses that already exist. The presentation was a big hit. It was obvious that the manager will be able to use this tool to greatly enhance his ability to analyze business plans. We also spent some time discussing how you he can help existing businesses correct some of their deficiencies through the five forces.

Business in a Box
One of the things we would like to do is create a business in a box. This would be a business that we create that would be turn-key for a local entrepreneur to start. Then we would “microfranchise” it to other offices in the Cause for Hope. Any ideas?

Consulting
We visited various businesses over the last couple of days. Yesterday we visited La Blanca Carniceria, El Comedor Fidelina, and Granadizadas las delicias (a butcher, a prepared lunch little shop, and a mobile snow cone stand). Today we visited VIP, an upscale car stereo and speaker shop selling Pioneer, Infinity, etc. that is imports from the US as well as car alarms and cell phones. We also visited with Venta de Llaves (Sales of Tools...very creative business name) and spent some time brainstorming various ideas for businesses we have visited as well as for the office and the foundation.

Other

• Tim calls the cockroach, Cookie la cucaracha and Tim visits him each night during his midnight snack and they carry on conversations…it’s a weird relationship
• I think I got sick from McDonalds, go figure…
• Imodium, Pepto and 7-up are my new best friends
• There was a lady carrying a live rooster down the street…
• It rained four or five times harder today than any rain I have ever seen
• The culture gap is huge between the US and Guatemala
• Not having TV is kind of nice…but I am missing the NBA playoffs!
• Thank goodness for google video chat
• Guatemalans are not too worried about time...
• We drove to San Francisco (they call it San Pancho) and Samayak today
  
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