Business in the Slums

I have been helping the women of the WEEP program write business plans; it is an enlightening experience. I struggled at first, it was difficult to write plans for businesses I know nothing about in a market I am completely unfamiliar with. I am writing plans for businesses in the slums, the the economy in the slums is radically different from any western market. Business in downtown Nairobi operates in much the same way business in San Francisco or Chicago operates. There are malls, supermarkets, stores, banks, restaurants, and factories.
Business in the slums, however, is very different. There are no stores, people have stalls where they sell the most random hodge podge of goods. It is not uncommon to see a women selling packages of underwear, dried fish, and toothbrushes from a stall. Stalls are trees branches nailed together, they aren't even made from proper boards. Four branches serve as posts and another four branches are attached horizontally to re enforce the posts and to hang goods off of. And stalls are luxuries, the majority of people just sit by the side of the road. In the slums people buy consumer goods in medium sized quantities and then sell tiny portions to consumers. It is not uncommon for a person to buy a bag of charcoal and then sell one or two pieces to consumers. Needless to say it is horribly inefficient; but people don't have enough money to buy a whole bag of charcoal at once so they buy pieces.
Another reality of business in the slums is constant negotiation. There are no fixed prices, you haggle over everything. This has made it difficult to construct realistic business plans. A typical conversation goes like this:
Me: "How much are you going to charge for that?"
WEEP Woman: "It depends"
Me: "It depends on what?"
Weep Woman: "How much the person is willing to pay"
Me: "Is there a range of prices?"
WEEP Woman: "Maybe 50 to 100 shillings"
I have given up trying to formulate break even analysis for their businesses, I just have to trust that they know how much they need to sell an item for in order to make money. And they are certainly interested in making money; they have to survive. I have tried to remind them that they have to not only cover the cost of the good they are selling but they also need to factor in their overhead costs.
Another reality of business in the slums is that every person has to have at least two businesses. Most of the WEEP women plan to, in addition to their main business, tailor and sell vegetables on the side. So far I have written plans for tailoring, fish, tomato, school uniform, banana, milk, and grain businesses.
Many of the women I have been working with plan to enter the fish business. This is mainly because one of the WEEP women, Jane Akini, has been very successful in the fish business. Jane is inspiring, she owns two 'homes' (freestanding rooms) in Kibera. She lives in one and rents the other out. Jane self identifies as a business women. She started selling small dried omena fish by the side of the road, now she sells from a stall and plans to expand her business to sell fish wholesale.
Overall I have been impressed with the WEEP women. They have certainly taught me more than I have taught them. I now have a vague understanding of how business operates in the slums.
The WEEP graduation is on Saturday and I leave for safari on Sunday. I will keep you posted,
Margaret