Micro-enterprise – to Survive or Thrive?

by katiedelp on

By Bob Lupton You’ll never meet a group of five more committed, compassionate volunteer women in any church in the land.  They have been on dozens of mission trips, formed personal relationships with poverty-stricken peasants in a remote Nicaraguan village, started a sewing micro-enterprise to help village women earn money to support their families, hired a part-time local Nicaraguan woman to oversee the operation.  But after four years of lugging suitcases full of embroidered dishtowels, using their spare bedrooms as warehouses, selling hand-sewn items to every family member, friend and mission-minded customer they could interest – they were worn out.

“Is there a way to hand this business off to some other group that will run with it?” they asked.  The relationships they had forged with the peasant women were important to them, they were clear about that.  They were not looking for a way to disengage personally.  They just needed to get the weight of carrying the sewing business off their shoulders.

I understood their dilemma.  The board of our Nicaragua ministry was engaged in a similar discussion.  After eight years of attempting to market pottery, wooden bowls, hammocks, purses, woven baskets, Christmas ornaments, aluminum crosses made for melted-down Coke cans, and dozens of other artisan creations, our craft business was far from self-sustaining.  We had trademarked a brand name (Ojala), set up a website, made inroads with shops catering to the tourist trade, even ventured into the US market at the Atlanta Merchant Mart where national retail chains place large orders.  But there were problems.  Only a few of the products had appeal to the tourist market.  Fewer still to the US market.  And then there were the challenges of filling larger orders in a timely manner while maintaining acceptable quality standards.  It’s hard to deliver big quantities when artisans are scattered in different locations doing piecework out of their tiny homes.  But we have tried diligently to make it work – for eight years.

We conducted market research to determine the tastes of tourist and US domestic consumers. We narrowed the product line to the items most in demand.  We organized artisans into guilds so that best practices could be shared. We joined forces with international craft distributors.  But for all our efforts, it was becoming increasingly clear that the cottage-craft approach simply was not progressing into a sustainable (let alone profitable) operation.

It had been our sincere hope that we could connect the considerable talents of peasant artisans to markets that would turn their micro-enterprises into profit-generating businesses.  Nicaraguans survive on these little micro-businesses – everyone hustles to earn a few córdoba a day. They survive but they do not thrive.  In order to prosper, their micro-enterprises must be brought to scale.  That means enlarging their space, hiring workers, mechanizing their production, increasing their output, connecting to international markets – in other words, entering the for-profit world of legitimate business.  For the average artisan, this is a foreign and intimidating world.

So how do five committed volunteer women from an affluent US church convert the sewing operation they have started (and are carrying) into a self-sustaining business that supports their Nicaraguan friends?  How does Ojala enable peasant artisans to prosper?  Well, for one thing, we have probably been asking the wrong people these questions.  We have been asking our ministry-minded friends for their ideas, not business-minded people.  We have been asking our wealth-creators to donate to our charity-driven enterprises, not invest in them.  Investors ask the hard questions, questions about business plans, management experience, marketing research, production capabilities, burn rate, ROI.  Unlike social service types who find heart-warming stories irresistible, investors are invariably drawn to the bottom line.  But then, if our goal is to alleviate poverty, does it not make sense to invite into the mission those who are gifted in profit-generation?

Successful business people understand job creation.  They know that good jobs depend on stable businesses that turn good profits.  But if we ask for their help, they are likely to point out the inefficiencies of our cottage industry approach.  They are likely to mention scale and assembly- line efficiencies.  They will explain that a successful manufacturing operation must have experienced leadership, an adequate facility, proficient production processes, effective inventory management and meticulous quality control.  They will probably advise us that without aggressive marketing and unrelenting R&D a business will not long survive.

That’s the reason we don’t ask them. They complicate things.  They don’t understand that peasant women would rather work in their homes where they can watch their children and adapt their work schedule around household duties.  They don’t see the value of slower pace communal village life. They are always pushing to get things done faster, more efficiently, more cost effectively. They would think nothing of introducing western business practices into an established culture that has survived for many generations.  Yes, there are reasons why we don’t ask business-types to invest in the mission.

So what are the five committed women to do with their sewing operation?  And does Ojala have any future as an economic engine to move peasants out of poverty?  Compassion fatigue has brought us to the moment of truth.  Are these efforts really about poverty alleviation?  Or are they primarily about community building?  Both are legitimate, I suppose.  But when prosperous Americans have the capacity and connections to create businesses that lift people out of a life of grinding poverty, I find it difficult to understand how we can be satisfied doing “relational” ministry built on an artificial economy that offers no way for the poor to rise above survival.

Are there ways that to accomplish both – respect for the indigenous culture while building a profitable business?  I think so.  But it will doubtless be more balanced if both “relational” community developers and business-driven entrepreneurs are teamed together.  (Traditional missionaries historically have a poor record of economic development.)  A well-conceived company can foster a sense of community among its workers.  It can offer on-site daycare for infants and pre-schoolers.  It can provide health care for employees and families.  It can develop skills and leadership that increase employee marketability. It can establish methods of profit sharing that in time can lead to shared ownership.  It can stimulate the creation of ancillary businesses like jitney services and lunch stands.  It can inspire dreams for a brighter future.  In short, a well-designed business can move a culture from surviving to thriving.

How does this happen?  To begin with, there are already some great models out there to inspire the imagination.  Like Bill Malloy’s home furnishing plant in Sabu, Philippines, that began small and has grown to 4000 workers.  It has ignited the economy of an entire region.  And Rob Smith’s Earthwise Ferries business that is reviving a dormant economy around Africa’s Lake Victoria with high-speed, energy efficient ferry boats.  There are countless others.  It is difficult to predict what opportunities entrepreneurs from our churches might uncover if we invite them to go with us on mission trips (let’s call them investment trips).  But first we must recognize that our wealth-producers are not simply funders but are people uniquely gifted with entrepreneurial talents essential to God’s plan for flourishing societies, for Shalom.  They are needed in mission work every bit as much as we need doctors and teachers and, yes, evangelists – in fact they are evangelists (the bearers of good news).

No one is better at creating successful small and medium businesses (SME’s) than Americans.  It’s in our DNA, our cultural make-up.  Which is not to say that other countries, even under-developed ones, are devoid of talented entrepreneurs.  Evan Keller, founder of Entrust Enterprise Development, demonstrates that by pairing up budding small business owners in poverty settings with successful American business owners, the mentoring significantly accelerates growth and profitability.  Keller prefers mentoring relationships over the “business as mission” approach.  “I’m partial to building up the business acumen of people already making a difference in their own communities,” he says. “Intellectual capital transfer (in a long-term relational context) can have an amazing impact, but only with the right people.”  The right people, he states, are those with standard entrepreneurial personality traits, demonstrated business acumen through the creation of a business with five or more employees, and a teachable temperament that embraces change.

If the visions of five committed volunteer women and the Ojala staff are to ever see their efforts bear the fruit of prosperity, wealth-producers must be invited into the process with more than their donations.  Entrepreneurs, whether mentors or business creators, are essential to a successful mission.  The creative tension will be worth the hassle.

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