“…the motor needs complet [sic] servicin [sic]. I can’t continue pushing…will [have] to look 4 a place to park it and continue,” texted Mutala last night at 7pm.
Having pushed the motorbike at least six times in the last two weeks, I realized I needed to decide if I’m going to stay the course or give up on the business. Making a commitment to the business meant investing another $700 to buy another motorbike. I cannot have Mutala pushing the motorbike from any random place in Accra. Giving up means slowly letting our business wither away by not investing in more capital equipment and more inventory.
The fear of protests, riots, and even civil war related to the Ghanaian Supreme Court Decision on August 29 decimated our customer base. As that day approached, more and more of our customers just held their cedis in their wallets and purses. Some took vacations that coincided with the decision so they wouldn’t have to be in the country. As reported in the Daily Graphic, Accra was a ghost town on August 29.
Starting in April 2013, I initiated a sales effort that involved hiring up to 7 salespeople at one time. Though we initially had promising sales in April and May, our progress began to stall in June. By July, our salespeople were lucky to get 5 customers in a month. It was like the proverbial pissing in the wind.
Given this business climate, I have been reluctant to invest more in the business. I laid off all our salespeople except for Mutala, Teresa, and Christiana, the last saleslady. I delayed buying inventory in August. For the last month, I have been resigned to the idea that I will eventually sell a controlling interest in my company.
A Day of Small Victories
In order to make an assessment, this morning I reviewed who was left in our customer base. Turns out many of our reliable customers did disappear for various reasons last month.
If we could recruit them back to our service, then we’d be close to breaking even. Factoring in Christiana’s new sales and some of the returning old customers, Teresa and I determined that should be able to inch toward break-even by next month. I know it’s kind of accounting, but I’d call that my first “small victory” of the day.
Second, Charlotte, the house helper, was able to cook lunch for five on less than 10 cedis ($5). We had bean stew with kelewele. It was quite nice even before factoring in the price.
Third, Sarah, my contact abroad, informed me that she is finally ready to begin sending us more inventory. She was on leave in August and then in the process of finding a new apartment. It’s been two months since we had an update to our stock and our remaining customers will soon be getting restless. I know I’ve been reluctant to buy more stock but I also cannot wait indefinitely for Sarah to get her stuff straight. Her email this morning was another small victory.
Fourth, I may be able to hire an expat salesperson for a song. In a developing country, the disparity between what a local and expat will take is significant. A fresh graduate from University of Ghana, University of Cape Coast, or Kwame Nkrumah University of Science and Technology (KNUST) should be happy to make 700-800 cedis (net of taxes). Most young people are either unemployed or underemployed. If they are working, they may only be making 300-400 cedis.
If I were to pay an American expat with a Bachelors, then I’m pretty sure she would feel I should be lucky to have her for anything less than a 1,000 cedis per month. I do not believe I would get serious effort from her unless she was making 1,500 cedis or more. The cost of schooling in America and Europe is simply much higher so the opportunity cost is also higher.
Lastly, Mutala thinks we may be able to get by with repairs to our current bike. He thinks that if we do replace the bike, then we’ll need to spend $1,000 for another 2.0 L motorbike. He thinks it’s likely that the police will give him trouble if we buy a 1.2 L or 1.6 L bike. They might mistaken him for an okada, a motorbike illegally used as a one-person taxi, and harass him. (Okada are common in Nigeria but Ghana has resisted allowing them on its streets.)
Taking all of these things together, I’m willing to keep making a go of it. If the climate is really improving, then the business has a chance of becoming independent by the end of the year.