The lead entrepreneurs for this group (funnily enough, they're both called Mamata) after they went on a long market research and shopping trip with our project manager, Mr. HK Mishra. We provided them with about Rs. 8000 as initial working capital (~ US$ 140) to buy an initial batch of raw turmeric (for drying, grinding and packaging), sieves and other implements, food grade plastic packaging material, and to go to various local markets and research turmeric (plus other spices, and also flour) prices at both retail and wholesale rates.
In addition we did market research, and went out and bought 2 small pulverizers, a manual foot-pedal operated plastic package sealer, and a large weighing machine. Total costs for the equipment added up to approxmately Rs. 86,000 (~ US$ 1,525).
Entrepreneur Incubation vs. Business Incubation
I see this micro-scale production as an exercise in self-employment training entrepreneur incubation than "real" business set up. Insights will be used to create an enterprise that operates at a larger scale and generate more revenue. I'm hopeful that this way we develop the confidence and business understanding in these female entrepreneurs, such that they are able to successfully take forward that scaled up enterprise.
Self selection of women into our program
For a variety of reasons, our program seems to be mainly involving women at this point. Possibly because:
We're conveying a specific message in this social context:
We represent a learning opportunity and women desire to learn
Timing of our activities
Snippets of our encounters with community women
Women's perceptions of each other
Women's perceptions of each other
A large number of women turned up for the meeting (due to the extensive mobilisation that my team usually does at least a day prior to these meetings), and most of them behaved as we've come to expect - listen with keen attention, say very little, and remain noncommittal.
One of the older women decided to act as spokesperson for the majority, and said that whether it was incense sticks or compost, a livelihoods project would only work if the women were allowed to produce within their homes, and then sell their products to an intermediary who came around doing door-to-door collections. She was convinced that none of the women would leave their homes to go sell their products in local markets, no matter how profitable it might be to dispense with the intermediary.
But another woman disagreed vociferously. She and her husband had jointly owned and operated a corner store, and she said she was ready to go out and do the selling of products herself. I asked her if she had gone around to banks for loans, was familiar with banking processes, and had engaged in marketing activities. She answered in the affirmative to all questions; she had operated all elements of the business in equal partnership with her husband. She then looked at the first woman and said that not all women fit into the stereotypes projected by other women in the community.
Women's perceptions of their own lives
Women without husbands
During one of our first household surveys, I encountered a young girl who seemed very worried about a survey question: husband's name, and husband's home village. Her husband had left her so she didn't know what to fill in. She worried in case this was problematic for us. (She was from the Munda neighbourhood, and had come to Bhubaneswar (Orissa) via a few years in different towns in the state of Jharkhand, and in border areas between Jharkhand and Orissa).
There are so many of these women, I keep happening across their stories. On the day that we had the first business meeting for the spice-making group (see here), one of the women who had kept rather quiet during the proceedings came to meet me afterward.
She asked me if I could allow her to participate in this self-employment group. I said of course, she could discuss it directly with the group and didn't have to seek my permission. But she seemed worried. She said she was the sole breadwinner in her family, and couldn't afford to give up her current job to work at starting a group enterprise. I asked her for details. She said her husband had left her a year ago, that she had a young son, and that she currently worked as some combination of assistant and maid in a college. It took her about an hour to get to the college everyday, using an autorickshaw (shared transport). This provided her with a monthly income of Rs. 4000 (currently approx. US$ 71). I would guess at her transportation costs being at least Rs. 500-800 a month, if not Rs. 1000 (between $8 - $18).
Women who want to "do something of their own"
As I discussed in an earlier post, there is a lot of demand for our services. Even when it wasn't clear (to us or to our beneficiaries) what services we were providing, women were flooding our office with incessant cries of "I want to do something. Something of our own". To be honest, we just haven't been able to figure out what to do with all these willing participants. Mere skilling and training is not our objective, and figuring out which enterprises to start (and how) in order to create successful self-employment is a challenging and time consuming task. It is impossible to do that right away with these many people given that we're not a factory that has just opened shop and is hiring by the hundreds.
Opportunity Costs of Participating in an Entrepreneurship-based Project
Further, what we're doing is innovative and requires extensive business, creative, and market exposure for these individuals. The individuals need to spend time in going along on the field trips we organise, coming to talk to us to brainstorm ideas and discuss resource (or social) constraints, learning skills that could be used for finding wage or self employment, and attending informational workshops on business opportunities / financial schemes / banking processes and so on. Starting businesses de novo requires all of your time, and all of your energy. Starting businesses in an environment as complex (and with as high barriers to entry) as the institutions within which Indian micro-businesses operate, requires one to be very resourceful, spend a long time understanding local market dynamics within a given business sector, and be willing to work long hours.
For the men and women that are already engaged in some economic activity, it is likely too risky to give up what they are doing (having invested some time and money in understanding that activity's local market & creating relevant business networks), whether it be wage or self employment that they are currently engaged in; we don't promise any certain payoffs as our approach is participatory (so far) and we haven't come armed with readymade business opportunities. Further, the men can go work for a few hours most days of the week as construction labourers and get a decent wage in the city (which is rapidly expanding, and where large scale construction is always ongoing).
p.s. Construction work is not a sector that excludes Indian women. On the contrary, women form about 50% of the unskilled construction labour force in India. But the average woman in our current target community (Kargil Basti) in Bhubaneswar doesn't seem to be working as a construction worker (perhaps due to some combination of slightly higher household income levels and social background), so the rates of female unemployment appear to be higher here than male unemployment, with the most common source of male employment being skilled and unskilled construction labour (as revealed by our just about wrapping up community survey).
Hence the opportunity cost of joining our project to train formally in a technical skill (whether tailoring, or electrical repair) and then work with us to set up an individual or group business, is higher on average for this community's men than for its women. So we see women flooding our office, ready to invest time in learning a skill such as tailoring, without necessarily worrying yet about how exactly this learning will translate into livelihood.
But that's all right actually. We're in pilot mode, and experimenting with this self-employment project. As reflected in my advice to the currently employed woman who is debating joining the spice-making enterprise, I'd feel more comfortable in working during this pilot phase with individuals with lower opportunity costs of project participation. Once our model is proved to work and once we have some businesses set up, then we can induce the husbands to join hands with their wives and community women to take the businesses further.
A consulting client
This person above came into my office this past Thursday, wanting help with his business. He lives in Kargil basti, and has a tiny store in one of the main market areas in the city (Bapuji Nagar). The store is one of the smallest I have seen, you can see its size from the picture on the left. It sells cellphone parts, cellphone chargers and batteries, and a random assortment of DVDs and CDs. It's basically a shop set up in the small space between the walls of two adjacent large stores, one an electrical fittings store and the other a phone booth and phone store.
I visited his store that same evening for a preliminary "consulting visit". Bapuji Nagar is the part of the city where all the cellphone stores are clustered - cellphone sellers, cellphone repairers etc. The stores are many, they're all bigger than this store for sure, and the volume of customers in this area is very high.
This particular enterprise owner wasn't quite sure what help he wanted. His store is in a prime location, but it's very small. He said he wanted a bigger store, but honestly, it would be difficult to achieve the size of store necessary to compete with the surrounding stores without a very large bank loan. And that would be excluding costs of buying all the stuff with which to stock this larger store.
The other idea this enterprise owner had was to sell computer parts. I asked him if he understood different aspects of computer hardware. He nodded yes, but then said he didn't want to lie.... he didn't really know much. So then why did he want to get into the sales of computer parts? Because it was just something he'd wanted to do for a while.
I asked him some basic questions, such as how much of what do you sell per day, i.e. what does your inventory look like? He had no idea. He said that if he worked for someone else, of course he'd keep an inventory. But since he was working for himself, why would he bother keeping records? He just knew how much he bought and sold overall.
I asked him if he knew how many of the surrounding stores sold computer parts. He said none, at least not a significant number (in this he was more or less correct, since all the computer and electronics stores are clustered in another part of town). I asked if he had done a quick survey of the stores around him to assess his competition - what were the other really small stores selling that he wasn't? And had he observed if they were doing better business than he was? No.
The string of CD packages hanging on his store front were dusty. They don't sell anymore, so I asked him why he still hung them outside his store. He said yes, he knew he should paint the outside of his store a little bit, spruce it up, take down the CD string, or at least dust it off. A similar story with the 10-15 dust-covered cellphone covers he had stocked in a small glass case on the store front.
There was also a pile of dark yellow, dusty plastic envelopes on one of the shelves to the front. I asked him what those were. He said they were DVDs. I said do they sell? He said yes, every once in a while. How much? He didn't know but maybe about 10 a month. He couldn't say for sure, but he might make about Rs. 200 - Rs. 300 from selling those DVDs ($3-5). We went back to the inventory question again - did he not keep track of how many DVDs he sold, which ones, to whom, for how much? No. Also, I pointed out that it was impossible to browse the DVDs and select one, besides being unattractive, those yellow envelopes were completely opaque. He smiled embarrassedly again and said that one would need to tell him which DVD they wanted, and he would search through the pile for it.
Did he have another store location? He said yes, he used to. He used to have a small roadside store in Kargil basti itself, had converted one of the rooms in his roadside house. He had put a small refrigerator there in which he used to stock beverages such as Pepsi and Coke. His wife managed that little store, but it wasn't lucrative so they closed it. Had he thought of supplying cellphone related demands of the Basti itself? He said yes, but there was already a store doing it, and anyway business wouldn't be so good.
I asked him if he could come meet me for 4 sessions, spread over 4 weeks. We'd work on a plan together, I could have some of our MBA interns take a look at his store and do some market research, and finally we could help him with paperwork to get a small loan to start with, and figure out smart, profitable ways to spend that money. He said yes, he could come by my office on a weekly basis. I asked if he could pay my team Rs. 200 ($3.75) to help him out. His mouth fell open a bit, and he asked, "Rs. 200 per day?". No, of course not, for the entire month. He nodded.
I have thoughts on this of course that have little to do with the actual solutions we will jointly find. Should this person choose to stock computer parts, where can he go in the 2-3 hours he has per day (during the very hot afternoons in the summer, when customer volume is very low and hence when he can shut shop) to learn a bit about computer hardware and the various component problems that potential customers would relate to him? His store is in a prime market location, but in a very sector specific cluster (all cellphone focused). What would happen if we put a bunch of students together to come up with a low-cost way of completely transforming his store front, and making it look unusual enough to attract customers? What would be the effects of making his store focus on selling something completely and startlingly different in that very specific cluster?
What would be the use of an individual transformation of this sort, and what is the larger, underlying problem here? Lack of motivation, information, resourcefulness, resources? What is the difference between him and owners of other similar sized stores in the same sector in that same locality?
Self-organisation post-business exposure session
About a week after the first visit to Nayana Devi - the local entrepreneur focusing on various kinds of foods packaging, handicrafts production, and marketing for local self-help groups (click here to read) - two women came to our office. The two of them are in the foreground of the first picture (top, clockwise) above, shown during our second visit to Nayana Devi's house and production facilities, this time for a focused business meeting.
The two women represented a larger group (about 12-15 women) from the same neighbourhood cluster in Kargil basti, and all of them had decided to work collectively at the production, packaging and selling of spices, flour and other such kitchen staples. Their inspiration had been Nayana Devi's small-scale food processing & packaging facilities that they had visited a week earlier. We decided to have this group meet Nayana Devi a second time.
Business meeting with local business mentor
The goal of our second trip to Nayana Devi was to figure out details about how to structure a group business, how to get started with an initial range of products, and to have interested community members have a face-to-face Q&A session with someone that they regarded as both a peer and a business mentor.
To a large extent, the meeting was hijacked by a single community member, one of the community leaders, and a man who was convinced that he wanted to buy a couple of machines and get into packaging & supply of spices and flour. For nearly an hour, he discussed how he wanted to work with other community members to start up a business and was even ready to pay for the machines himself. His conviction was amazing, but by the end it was clear that he didn't really want to participate in any kind of business planning beyond buying the machines. It also became clear that he didn't really want to work with the other women who had come along for the meeting, which started rubbing everyone else the wrong way.
But we did manage to moderate the meeting finally, and bring the conversation round to the women that had come with the purpose of starting a business together. The women were all from the same neighbourhood cluster in Kargil basti; the 3-4 women that were from a different neighbourhood spontaneously formed a separate group and were far more interested in tailoring.
* * *
Business Advice vs. Motivation
A problem from my perspective was that Nayana Devi primarily offered motivation to the women, not business advice. I tried steering the conversation round to business models, to figuring out the ideal group size for a bunch of first-timers, and other such matters, but I wasn't very successful. Nayana kept bringing the conversation back to "Yes you can. I could and so can you". Etc. Etc. This was inspiring, but I was hoping for more concrete guidance given that this was her third interaction with the same group of people.
What this means is that especially in the case of grassroots entrepreneurs that have made it on the basis of an intuitive feel for business, I may have to ask a long series of probing questions before I can facilitate a tangible discussion about viable business strategies. Since it is exactly information of this sort that would be invaluable for micro-enterprise owners who want to scale up, I need to figure out a strategy.
My team and I met with this group of women couple of days after the above business meeting. The women filled out general application forms for our business centre, and sat together to talk about business organisation, financial assistance with procurement of machines, and concrete next steps toward getting started.
The addition to this meeting was the turmeric supplier who lived in the same community (but in a different neighbourhood) and whom I briefly mentioned in a previous blog post. Since this person had already created a turmeric supply chain and the women were interested in processing & packaging turmeric, I thought this might be a mutually beneficial community linkage.
Organisational Structure of the Group Business
While discussing business models, I presented the women with a few different options. First, options with the supplier:
Next, options regarding group structure:
Finally, my team and I left the room and allowed the women to finalize business structure among themselves. About a half hour later (during which we all overhead loud, heated debates), the women called me into the room. Here is what they had decided, and what they finalized after a joint discussion with me:
As for the turmeric supplier:
I am currently a PhD student at the Graduate Institute of International & Development Studies in Geneva, Switzerland. My interest lies in inclusive governance - participatory governance in cities, political participation by women, making local government work better, and community-based approaches to environmental sustainability. You can read the "about" page for more!