Business Training 101
Up on the mountain at Baan Saeng Saiwan the staff have been making grass brooms to sell. This is one of their business ideas and they do it the traditional way. They buy the grass, they make the broom, they sell the broom, they make 30bht, about $1US, minus the their expenses for the raw materials.
This is ridiculously cheap to us of course, but in a country where the average person lives on 300bht/day it’s not actually that bad. Assuming it takes less than an hour to make one broom.
But it could be better.
So how do they take this broom making business to the next level?
How do they make it more profitable and benefit the community?
Last time he was at the home Aaron sat down with them and helped them form a plan.
Step 1. Don’t make the brooms yourselves.
Find 10 families in the village and teach them to make the broom. Once a week go to pick up finished brooms and bring more raw materials. Pay them for each broom that they complete that is up to standard. A fair price would probably be between 20 and 25 bht since they aren’t purchasing materials or selling the brooms.
Step 2. Save Money on Materials by Buying Wholesale.
Now they can lower the material cost per unit by buying in bulk because they are making more brooms.
Step 3. Branding
Create a label, just a simple sticker will do, The Baan Saeng Saiwan Broom. People pay more for things with labels on them. It’s just a fact. Raise the price to 40bht.
Step 4. Expand the Market
Find an outlet in a large city, like Chiang Mai, where you can easily sell many more brooms each month than in the village and it’s small neighboring cities.
This is how to turn making brooms for sale into a thriving cottage industry that helps the orphanage and families in the village.
To the western business person this type of thing is standard fare, but it’s very new to the people here in the village.
There is a lot of entrepreneurship here in Thailand, people work hard and do what they can to survive, but there is very little innovation.
Which brings us to tomorrow’s subject, Risk and 3rd World Business Development. Stay tuned.