MPI Ecuador's business program has undergone significant changes under the 2010-2011 PD team. Here to outline its current goings-on is Jack. To check up on the work our summer volunteers are doing, please visit the Summer Session 1 tab at the top of the blog!
Since January, the Small Business Development program has been offering free consulting services to various businesses in the communities of Rumiloma and Sangolquí. Over the past several months, we have streamlined our approach to heavily target the finances and accounting of the businesses we encounter. When appropriate, we also advise businesses on any possible opportunities we find, ranging from moving locations to carrying different products.
An important part of this program has been Carlos Rodriguez, a finance student from Quito. Carlos makes a one and a half hour journey out to Rumiloma every Saturday to attend one of our English classes and help us work with local businesses. With his help, we have turned the small business program into a structured operation that we are excited to expand.
About a month ago, we finished working with Rosita, a woman who was operating a two-in-one business: half small food store, half sewing business. Rosita did not practice any accounting, and how no idea how much money she was making. First, we taught her to keep a balance sheet. Next, we helped her figure out the wholesale costs of her store’s products; many of her products were bought in bulk, and only some products included a sales tax. We walked Rosita through the mathematical functions she needed to operate on her calculator. Soon enough, she was calculating her gross income for the first time. We eventually added up her monthly income and compared it against her costs of rent, electricity, phone, and water. Unfortunately, we discovered that Rosita was barely making any money. Rosita had been working 15 hours a day, and only made about $60 a month. That’s 15 hours of work to earn $2. Among other things, the biggest problem was a high monthly rent that devoured her income. Although Rosita was disappointed when she saw the numbers, she was glad that she discovered her business’ financial standing sooner rather than later; she might have gone months or years without having realized that her husband’s income was the only reason her business was staying afloat. Rosita is currently in the process of selling her space (there have already been several interested enquirers) and will continue to offer sewing services from her house. She will also continue to sell her products at the local Thursday Sangolquí market as well as at local popular events, such as soccer games. By shedding the disability of a costly location, she will be able to keep a much higher percentage of her income and have a higher profit.
Since completing our work with Rosita, the small business program has been working on organizing a book-keeping system for the owner of a small bakery and has recently given a consultation to a local fruit and vegetable stand. With only a few months of experience under our belts as pro-bono financial consultants, we are more excited than ever to keep this program improving and gaining popularity in the area.
|Jack and Brock with Rosita in front of her store|
|Pablo and a friend, frequent recipients of MPI's business consulting services, in their store|