Coffee Consulting

In my site there is a large coffee cooperative.  They grow the coffee in the hills north of where I live and then dry, toast and grind it down the road from my house.  To understand what we’ll be working on, you’re going to need some background on Nicaragua culture.

This is a harsh and huge generalization but Nicas are bad at saving money.  Now I know it’s not their fault; it’s hard to bank money when you’re only making $6 a day.  In addition, not having a physical bank within 30 minutes by vehicle certainly doesn’t encourage the habit.  That being said, it’s also not impossible to save money; there’s a lot of frivolous discretionary spending.  Anyway, I’m getting off track.  Typical behavior indicates that people in my town do NOT buy in bulk.  Again, understandable if you don’t have a refrigerator or just plain don’t have the money.  Example: I need envelopes to mail letters home so I bought a box.  After a couple days the humidity and temperature sealed all the envelopes rendering them completely useless.  Now I purchase envelopes one at a time.  That’s how it works here with everything (except of course our yummy rice and beans).

To tie everything together, that’s how people also purchase coffee.  Nicaraguans never buy coffee in the pound bags like we do.  They buy it in tiny 2oz servings.  Therefore, the coffee coop wants to sell its lower grade coffee in the same single serving size.  The issue is that they cannot match the price of the competitors: $0.15.  They’d like to know if people would be willing to purchase a higher quality in the same size for $0.21.  To find out, we are going to do a market study to find out preference, price sensitivity and brand loyalty.  Next meeting is the 16^th!

Elections Here and There

Nothing exciting to report about the local mayoral election in my town.  There was an impromptu parade and fireworks so I’m assuming the incumbent Sandinista won.  I did submit my absentee ballot for the US election though!  It was easy, maybe too easy…  They emailed me a PDF ballot and I filled it out, scanned it and emailed it back.  I have no fun plans to watch election results since I’m still not permitted to leave my site.  Crossing my fingers that my neighbors let me use their internet!

Tomorrow will be a busy day!  I’m meeting with the head of the coffee cooperative to discuss marketing tactics.  Then I’m going to try to co-plan with 2 of my professors and teach a class (topic TBD).  And finally I’m meeting with the women’s group to see how their strategic plan is going.  At our last meeting she showed me her work on the vision, mission and objectives of the organization, very impressed!  I’ll write another post if anything eventful happens.  Otherwise, this weekend I’m going to visit a friend’s site in Masaya and then eat brunch and watch the NFL in Managua!

(Un)eventful weekend

Last night was the culto.  While I didn’t directly participate, I was still able to observe.  Now as someone who has grown up in Jesustown in the shadow of the Billy Graham Center, I thought I’ve experienced all that the protestant religion has to offer.  But in fear of playing the role of the Pharisees on Pentecost, this event was a little…eccentric.  For several hours people were walking around chanting, spreading holy water and speaking in tongues (in addition to the usual singing and praying).   To each their own?

Today officially begins “Standfast Part II” (a cool way the Feds say “Stay Put”).  Tomorrow are mayoral elections across the country.  While we aren’t anticipating violent protests, I’m stuck in my little city of 5000 people with no bank or supermarket for the next 5 days.  To make this even more enjoyable, the Nicaraguan government has forbid the sale of alcohol today and tomorrow.  What a bunch of wet blankets, huh?  I’ll let you know if anything exciting happens!

Regional Comp, check!

Tuesday was Madriz’s (where I live) and Nueva Segovia’s (the “state” north of me) regional competitions.  There was 10 teams from 6 different cities and the business plans were mostly foods: yogurt, avocado popsicle etc.  Unfortunately, none of my 4 teams qualified for the national competition.  They were pretty bummed about it but, like a true Cubs fan, there’s always next year!  Except they will be flying solo because I’ll be back in the US of A!  The national competition is the day before thanksgiving.  I’m excited to see who wins!

Today is some sort of religious holiday.  I’ve been invited to participate in the culto (literally: “cult”).  That is what we call the evangelicals aka anyone who isn’t Catholic.  Anywho, they are having a worship service on my patio from 7pm until 1am…  This will be interesting.

Unrelated, now that I have more time on my hands I can put more effort into my cooking!  Last night I made teriyaki noodles with soy meat and veggies and this morning I ate scrambled eggs with Bombay potatoes!  (Thanks mom)

Pedro the consultant

I have begun doing some business advising with one of my counterpart teachers, Francis.  She is a seamstress and makes school uniforms and various articles of clothing for people in my town.  Even though Francis is in her final semester in undergraduate studies for marketing (she already holds a biology degree) she has not applied any of her knowledge to her own business.  Her enterprise uses zero marketing (not even a sign that says she’s a seamstress), accounting (she estimates her costs and prices) or planning (no steps to take in the future).  Although this is not surprising as it is the usual in Nicaragua, it seems silly not to use her new skills to help grow her business.  Therefore, I’ve started helping Francis put this knowledge in action.  Yesterday we discussed supply and demand for her products.  In general, Francis has more demand than she can handle since the business is comprised of only her and her aging mother.  So we came up with three potential solutions: increase production by hiring an employee or buying an industrial grade machine; or decrease demand by increasing her prices.  While this all seems fairly basic, it is difficult to make a decision about one’s business and measure the success of it without any sort of performance indicators.  Therefore, bring on the accounting!  We created statement of cash flows in Excel to monitor the income and expenses of Francis’ business overtime.  (For those of you who think financial statements are a different language, it is a spreadsheet that includes the date, description of transaction, starting balance, money entering or leaving and ending balance.)  I even made it fancy by including formulas to automatically do the mathematics so all she has to do is enter the numbers (are you proud mom??).

I’m going to meet with her next week to evaluate how she is spending her money and dig deeper into, yup you guessed it, fixed and variable costs!  How exciting!