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?