So when people ask me what I do for a living, I have a really hard time answering that question. If I tell them I own a "computer company" they'll immediately start asking my advice on how to fix some strange thing going on with some strange relative's computer. If I tell them I own a "franchise", they for some reason assume it's McDonald's or something.
The best I can do is explain that my job is helping technology entrepreneurs be successful, which is really what Computer Troubleshooters does. Every day most of my day is spent supporting the 480+ Computer Troubleshooters locations around the world, and the rest of my time is spent working with people who are interested in joining the CT team.
That latter group always has certain questions, as you might expect. After all no one just decides to spend $20k buying a franchise license and jumping into the self-employed lifestyle without doing some research. And that's a good thing, becuase the folks who really dig into the details and do their due diligence almost always decide that Computer Troubleshooters is right for them.
So if you fall into that category, if you're considering starting your own IT solutions business or if maybe you're already in an IT solutions business and you're considering joining a franchise, I want to help you out by answering your two biggest questions:
#1: How Much Money Can I Make?
Yep, this is a popular question. Understandably. But it's also a really hard question to answer, for two reasons. First - I don't know you. Your income in any business venture is fundamentally based on you. If you sit home watching daytime TV your income is likely to be less than that of someone who uses that same time to reach out to potential and past clients, for example. More importantly, the FTC regulates franchising in the US and I can't answer that question unless I can back it up with some good statistics, which is hard for me to do because we aren't a royalty-based franchise and I just don't get good data from a lot of our locations. I can tell you that most of our franchisees came from high-paying IT jobs, and the fact that we're ranked higher than any other technology franchise by Franchise Business Review (based on franchisee satisfaction) should mean something. But I can't give you specifics - nor should you believe me if I do. Franchisors who do provide income guidance are often basing it only on their top performing locations, so it may or may not be indicative of what you'll make.
Now 5 years ago it was pretty easy to guesstimate your income. Almost everything we did was billable by the hour, so if you estimate how many hours your techs are likely to bill on average, and multiply it by your expected bill rate... presto, you've got your estimated revenue. But our business model today is increasingly complex (for good reason), with multiple revenue streams. You'll make money from hourly billing (break-fix) sure, but also from supporting customers on BEST service plans (our version of Managed Services), from commissions on Cloud hosted solutions, from VoIP installations, hardware/software sales, and more.
To help you plan your income I created the attached spreadsheet here. I still can't tell you what you can earn, but you can use this spreadsheet to better estimate how much revenue you expect from the various income streams. Use this, and talk with existing IT solutions businesses (if you're in the CT due diligence process now ask your sales coordinator to send an introductory note to all the CT franchisees in your country so they'll make time to talk with you) to see if they think your figures are reasonable.
#2: Why Should I Join Computer Troubleshooters Instead of Doing It On My Own? (Or Instead of Joining Geeks On Call, Fast-Teks, or CMIT, or Friendly Mobile?)
Also a popular and important question. I asked the same thing before I joined CT back in 1999. Even though we're one of the least expensive franchises on the market, $19,500 (the list price for a franchise territory in the USA) is a lot of money. What exactly do you get for all that, and would you be better off spending $25k on another franchise or better yet save your money and do it all yourself?
You might suspect I'm a little biased on this one, but I do honestly believe you get more for your money by purchasing a Computer Troubleshooters franchise than through any other alternative. And to show you what I mean, I took the time to document each and every benefit you get from Computer Troubleshooters, in nine categories, and put them all in THIS spreadsheet. And I left room where you can enter your estimated costs for any alternative business method - another franchise or the "DIY" option. And even though I entered what *I* think is reasonable as the value for each benefit, I encourage you to go through, think about each one, and change it to what you think is fair. As you can see, you get a LOT for your money in Computer Troubleshooters - especially over the five-year span in the spreadsheet (we look even better over longer periods, but 5 years seemed like a good basis for comparison).
Note that I also left you some blank room on each page where you can add things you think we're missing and that someone else may offer - but let me know if you do, because it may just be that we forgot to list something.
So, how much money can you make as a Computer Troubleshooter? Use the revenue spreadsheet, talk with existing (and former) CT's, and find the real answers for your personal situation. Why join CT instead of doing it yourself, or joining another franchise? Use the comparison spreadsheet to judge for yourself.
Today's economy depends on successful small businesses,and successful small businesses depend on technology. We've worked hard to make Computer Troubleshooters the BEST solution for small business IT support, and we're growing all the time. If you're looking for a franchise opportunity in a growing industry, do the research and check us out.
Chip
Wednesday, August 26, 2009
Being a Mac Guy: The 1-year Review
So about a year ago I ordered a Mac. I've always been a PC guy, from my first 8088-based machine in collge up through the HP notebook I carried around last year. And as a "techie" I think there's still a certain expectation that you're supposed to be a PC guy - after all don't techies enjoy showing off all the obscure Windows commands that other folks complain about? (And, in fairness, I did teach a friend how to Alt-Tab for the first time yesterday, and it was a huge benefit for him).
But I'd heard good things about Mac and wanted to "play with" it, so I bought a used Macbook Pro on Ebay and started playing. A month later it had become my primary work machine, and a few weeks later I was blogging about my experiences as a new convert to the cult of Mac. Still, some of my PC friends were telling me things like "Yeah, yeah, you like it now because it's new and shiny, talk to me 6 months from now and you'll be back to a PC."
Well, it's been a year, and my regular computer HAS in fact changed again - to a brand new MacBook Pro (15", 2.66 GHz Core 2 Duo, 4GB RAM). I think at this point it's official - I'm a Mac guy. I still use VMWare Fusion every day to run my Microsoft Outlook (can't wait for the Mac version of Outlook due next year).
Why the switch? The main reason is that I'm a really busy guy, and using the MacBook Pro saves me at least 15 to 30 minutes every day. On my old Windows notebooks they would always take too long to "wake up" when I move from home to the office, or when I'm trying to get some quick work done in an airport or on a plane. Plus I'd get that frustrating "pause-for-no-apparent-reason" at least a few times a day, interrupting my workflow and just generally bugging the heck out of me. The Mac wakes up in seconds, and mostly very reliably (sometimes Outlook running in the virtual environment can't find the Exchange Server when it wakes up, but I've found an easy workaround). When I'm done I just close the lid and it sleeps - no waiting indefinitely while Windows tries to suspend it's programs. I reboot once a week or so, and in over a year of use I've had maybe 3 system "freezes" that required a shutdown & restart to correct. On my Windows machine that seemed like a daily occurance!
Now not all is perfect in the world of Mac. Apple software in particular has some wonderful features which are often missing from their Microsoft counterparts, like the ability to record a slideshow (Powerpoint) presentation with narration. But some of those features don't work (the audio narration invariably gets out of sync with the slides very quickly), and others only work if you are using only Apple software (like Apple's iMovie only being able to import pictures from iPhoto - which makes it almost unusable for me). Say what you will about Microsoft's Powerpoint and Movie Maker, but at least the features they do have actually work and don't require you to use other Microsoft products!
Still, the pros outweigh the cons, and I find I'm MUCH more productive now on my Mac. Looking at Apple's sales figures I'm obviously not the only one who thinks so, and in fact here at Computer Troubleshooters we've started doing some limited tech training on Mac Support as well (starting with a workshop last February where two Mac-certified trainers showed us the ins and outs of the Mac OS).
So for all my techie friends who still haven't tried the Mac, I'd say this: Try the koolaid, it's better than you might think!
But I'd heard good things about Mac and wanted to "play with" it, so I bought a used Macbook Pro on Ebay and started playing. A month later it had become my primary work machine, and a few weeks later I was blogging about my experiences as a new convert to the cult of Mac. Still, some of my PC friends were telling me things like "Yeah, yeah, you like it now because it's new and shiny, talk to me 6 months from now and you'll be back to a PC."
Well, it's been a year, and my regular computer HAS in fact changed again - to a brand new MacBook Pro (15", 2.66 GHz Core 2 Duo, 4GB RAM). I think at this point it's official - I'm a Mac guy. I still use VMWare Fusion every day to run my Microsoft Outlook (can't wait for the Mac version of Outlook due next year).
Why the switch? The main reason is that I'm a really busy guy, and using the MacBook Pro saves me at least 15 to 30 minutes every day. On my old Windows notebooks they would always take too long to "wake up" when I move from home to the office, or when I'm trying to get some quick work done in an airport or on a plane. Plus I'd get that frustrating "pause-for-no-apparent-reason" at least a few times a day, interrupting my workflow and just generally bugging the heck out of me. The Mac wakes up in seconds, and mostly very reliably (sometimes Outlook running in the virtual environment can't find the Exchange Server when it wakes up, but I've found an easy workaround). When I'm done I just close the lid and it sleeps - no waiting indefinitely while Windows tries to suspend it's programs. I reboot once a week or so, and in over a year of use I've had maybe 3 system "freezes" that required a shutdown & restart to correct. On my Windows machine that seemed like a daily occurance!
Now not all is perfect in the world of Mac. Apple software in particular has some wonderful features which are often missing from their Microsoft counterparts, like the ability to record a slideshow (Powerpoint) presentation with narration. But some of those features don't work (the audio narration invariably gets out of sync with the slides very quickly), and others only work if you are using only Apple software (like Apple's iMovie only being able to import pictures from iPhoto - which makes it almost unusable for me). Say what you will about Microsoft's Powerpoint and Movie Maker, but at least the features they do have actually work and don't require you to use other Microsoft products!
Still, the pros outweigh the cons, and I find I'm MUCH more productive now on my Mac. Looking at Apple's sales figures I'm obviously not the only one who thinks so, and in fact here at Computer Troubleshooters we've started doing some limited tech training on Mac Support as well (starting with a workshop last February where two Mac-certified trainers showed us the ins and outs of the Mac OS).
So for all my techie friends who still haven't tried the Mac, I'd say this: Try the koolaid, it's better than you might think!
Monday, July 6, 2009
Clear Internet - The WiMaxiest
We had a problem in our office. Our T1 stays pretty busy because it handles our phones, internal internet, and one of our FTP servers serving files to franchisees all around the world. The result: sloooow internet. Last year we signed up for Comcast Business Cable, but after several months of wrangling we couldn't get the owners of our adjacent parking deck to give Comcast access rights to run cable to our building.
The only choice we had really was DSL, which means AT&T. To be honest I just dread dealing with AT&T so much (based on past experience) that I kept putting off ordering the circuit. Then I ran across an ad for Clear (aka Clearwire), a new soon-to-be nationwide WiMax service provider. I'd heard about Clearwire in the industry press, but what I'd heard was somewhat skeptical - the "let's see if they can really make a business out of this" sort of thing. But they launched service in Atlanta on June 16, and the price was certainly right ($55/month for 4Mbps downstream and 1Mbps up) so I figured I'd give it a try.
That was two weeks ago. After a great experience at work, I ordered it for my home ($40/month) and set it up tonight. Here's the thing - I've been setting people up on the internet for 15 years now. I know my way around a router, and I've seen about every possible way to get online that's ever been invented. This Clear system is hands down the best I've ever seen in terms of setup. It goes like this:
Coverage can be a problem. You can see a huge speed difference just by moving the modem a few inches left or right, and it's going to work best when it's near an exterior wall or window. The nice thing is there is an easy 5-light indicator on top of the modem that makes it easy to see when it's getting the best signal.
Right now Clear is only available in Atlanta, Las Vegas, and Portland but they plan to roll it out to several more cities this year. For me my $40 Clear bill ($45 with a leased modem) let's me cancel my $100 AT&T home phone & DSL service (since I only use my cell phone anyway). That's a net savings of $55/month or over $600/year - PLUS I don't have to deal with AT&T customer service, which is an extra bonus.
Time will tell, but so far I'm definitely a Clear fan.
The only choice we had really was DSL, which means AT&T. To be honest I just dread dealing with AT&T so much (based on past experience) that I kept putting off ordering the circuit. Then I ran across an ad for Clear (aka Clearwire), a new soon-to-be nationwide WiMax service provider. I'd heard about Clearwire in the industry press, but what I'd heard was somewhat skeptical - the "let's see if they can really make a business out of this" sort of thing. But they launched service in Atlanta on June 16, and the price was certainly right ($55/month for 4Mbps downstream and 1Mbps up) so I figured I'd give it a try.
That was two weeks ago. After a great experience at work, I ordered it for my home ($40/month) and set it up tonight. Here's the thing - I've been setting people up on the internet for 15 years now. I know my way around a router, and I've seen about every possible way to get online that's ever been invented. This Clear system is hands down the best I've ever seen in terms of setup. It goes like this:
- You order the service.
- A box arrives at your door (actually I had to go to Fedex to sign for it, which was pretty annoying)
- You open the box.
- You remove the modem.
- You plug modem into your computer (or router).
- You plug modem into an electrical outlet.
- You are online.
Coverage can be a problem. You can see a huge speed difference just by moving the modem a few inches left or right, and it's going to work best when it's near an exterior wall or window. The nice thing is there is an easy 5-light indicator on top of the modem that makes it easy to see when it's getting the best signal.
Right now Clear is only available in Atlanta, Las Vegas, and Portland but they plan to roll it out to several more cities this year. For me my $40 Clear bill ($45 with a leased modem) let's me cancel my $100 AT&T home phone & DSL service (since I only use my cell phone anyway). That's a net savings of $55/month or over $600/year - PLUS I don't have to deal with AT&T customer service, which is an extra bonus.
Time will tell, but so far I'm definitely a Clear fan.
Monday, April 27, 2009
Entrepreneurship Lessons from the Third World
Last month I had the opportunity to spend 4 weeks in Kenya, Rwanda, and the Democratic Republic of the Congo. And even though most of the trip was not business-related, I couldn't help but notice some significant entrepreneurship lessons in all three countries. These probably won't shock anyone as they aren't really new, but they helped me rethink some of the assumptions I make about my business, so maybe they'll do the same for you.
Right off the bat let me say that the lessons I saw were very clearly divided into two categories, call them micro-entrepreneurship and macro-entrepreneurship. Let me start with the lessons from the micro (individual business) level.
Nowadays we don't tend to refer to places like Rwanda as the "third world", we're more likely to call them "developing countries", and that's very appropriate. Most of the people I met were living perilously close to what we would think of as "just surviving". Incomes - when they had incomes - of $10 to $20 per month were very common, and things like electricity, running water (or clean water), health care, or even a second set of clothes were rare. No one I met was starving - food is plentiful and easily accessible, and things like flour and bananas may be boring but they'll keep you alive. But for people living at this subsistence level, any development that improves in their standard of living can be huge, so even though they may not have formal educations many of these people have lived through a crash course in entrepreneurship.
(a GodCares micro-finance client, who buys charcoal wholesale and sells it on a street corner in Kigali)
I have to admit I've never really understood micro-finance until this trip, so let me share what I learned in case you're in the same boat. Micro-finance programs are typically setup to loan small amounts of money (anywhere from $20 to $200 US) to entrepreneurs in developing countries. So how does this help?
The clearest example of a micro-finance success story I can share was the lady who sells used shoes. Before the micro-finance program she had a small stand in Kigali (capital city of Rwanda) selling used shoes (which is a big thing in a country where many folks don't have shoes). The problem she had was that her inventory was typically only 8 or 9 pairs of shoes, so when customers came by there wasn't much to choose from, and it was unlikely she would have a pair close to their size. The micro-finance program loaned her $40, which was enough to buy over 20 additional pairs of shoes for her inventory. Her monthly sales jumped from an average of 4 pairs to about 12 pairs, tripling her income (from around $8/month to $24/month).
In the village of Buqarama we talked to the residents who were requesting help to be part of a micro-financing program. They're a very poor village. The adults in the village mostly work as day laborers (even though some are way too old to be doing manual labor), and earn anywhere from 40 to 80 cents per day working in someone else's field. But if they could borrow $200 they would be able to rent their own "block" (a section of a field), raise their own crops, and sell them at the market. Instead of earning $50 for 6 months work, they would earn $200 - quadrupling their income, and their standard of living. (For perspective, pens cost 10 cents, and health care for kids is $2/year).
Micro-financing programs, when run properly, are highly beneficial to the recipients, and generally have a 90%+ repayment rate (GodCares reported 98% of their clients were paying back their loans, generally on time). But nothing is 100% successful, and what I noticed was that while GodCares screens the people who receive the funds and loosely checks their idea, they really don't have a good way to verify that the new business venture will be successful. They're counting on these budding entrepreneurs to come up with good ideas for how they will use the money to build a more effective business. Usually that works, sometimes it doesn't.
For example many of the clients we met had chosen some sort of distribution business, often buying goods in bulk and selling them locally. Several ladies in Kigali had setup businesses selling charcoal, which they purchase in bulk from a distribution truck and then sell in small buckets to local residents. That works well, but others in the Byumbe refugee camp had decided food distribution was their best option, so they would purchase rice, flour, or cooking oil in bulk from the nearest market (several days walk away), and resell it to local residents in the camp. Not a bad idea, but because several of them were doing the same business, and the residents of the camp didn't have enough money to support all the businesses, their businesses were unsucessful.
Lesson learned: Find something people need, and will pay you for, and you'll be successful. But keep an eye on your competition, and make sure there is a market for what you’re selling!
(at a gas station in Butare, this kid sells nuts, and does a little dance to get attention)
Kids are natural entrepreneurs, and this is very evident in Africa (and elsewhere). Not in the “lemonade stand” sense of entrepreneurial efforts but more in the “find a skill that brings reward” vein. Begging is an entrepreneurial skill, and is commonly employed by kids in many countries, but we didn’t see much of it in Rwanda. But instead, in the rural villages you’d find kids who had practiced specific english phrases, which they were taught would help them make an income from white visitors. “Give me money.” was not uncommon, but more often I heard “give me pen”, “give me paper”, and “give me bible”. Now the interesting thing when you hear these phrases – which by the way are difficult requests to refuse when given by a pitiful looking child – is that you forget these kids don’t really know english. So no matter how you respond, they don’t know what you are saying. They just hope that your pen, paper, bible, or cash will find it’s way from your hand to theirs. Trying to explain to them that you only have one pen, and you need it, will get you nowhere because they don’t know what you mean. They also ask for empty water bottles – the disposable kind that we throw away every day. In rural villages they’re useful, so much so that they can have a noticeable impact on a family’s standard of living. (Remember they often have to make daily treks to fill up a 5 gallon container with fresh water from a source that may be miles from home).
The reason they ask for pens, paper, and bibles, as was explained to us by teachers at a school in Buqarama, is because they don’t have anything to write with, write on, or read. In school the teachers will fill a chalkboard with information, then wait patiently as the kids stare intently at the board and try to memorize what’s there, then they have to erase it and write the next lesson and the cycle starts again. Having a pen, a simple 10 cent pen, can dramatically change a child’s ability to learn, and so it’s worth all their time practicing “can I have pen?” just in case a visitor might one day give them one. Everywhere we went, whether we were talking to kids or parents or local officials, one thing was clear – the “reward” everyone was most interested in was a better education for the children.
Lesson learned: Investing in your own skills, whether it’s learning a few english words or getting through a difficult education, is the best reward for any entrepreneur.
Finally one thing that really stood out to me about my time in Africa was how much government matters in issues of entrepreneurship. Don’t get me wrong – even in the most inefficient & corrupt countries entrepreneurship can flourish (in fact you could argue that the Somali pirate situation is an example of unchecked entrepreneurship gone bad), but governments have the power to create an environment where entrepreneurship can grow and thrive, and as a result lift the entire economy. I call this macro-entrepreneurship.
Consider Kenya. Long considered one of the more stable African countries (despite last year’s violence), Kenya has advantages that help local businesspeople be more successful. First and foremost, because the government is (relatively) stable, there are some fundamental things that those of us in the “west” may take for granted. Authority, for example, so that crime is limited. A stable and connected banking system, so businesspeople can get loans, deposit money, send and receive money overseas, and even accept credit cards (a rarity among African economies). A fair justice system, so a business’s assets and rights are protected. And a democratic government (though some would argue that point), which means continued improvement because the voters demand it.
More specifically, Kenya’s leadership has recognized that Kenya has some unique assets that could help it’s businesses compete globally. It’s a former British colony, so most people speak english, and the education system is above average (for Africa). This means that outsourcing companies, similar to those that have been such a huge boost to countries like India, Indonesia, and the Phillipines in recent years, could easily setup shop in Kenya and take advantage of very low labor rates. The big weakness there for land-locked Kenya is their internet connectivity: right now everything is via satellite, which makes it very slow, and very expensive. Since 2005 however the Kenyan telecom industry has embarked on multiple projects to bring fiber-optic connectivity to the country, from the middle east (UAE) and from South Africa. When the first links begin operation this summer, the speed of Kenyan internet connections will dramatically go up, and the cost of internet connections will drop. It’s a win-win for any Kenyan with a Facebook addiction, but especially for businesses who will now have a level playing field with other BPO (Business Process Outsourcing) countries. This is expected to stimulate a lot of economic activity in the country, even during the current global recession. (See http://www.washingtonpost.com/wp-dyn/content/article/2009/04/16/AR2009041600941.html and similar articles).
Rwanda’s government is making similar efforts. Recognizing that their country lacks oil or minerals that might be a traditional way to improve their economy, the Rwandan government has decided their best hope for an improved lifestyle will come from positioning their country as the Communications and Technology hub for eastern Africa. Already Rwanda boasts a nationwide 3G cell phone network (very handy for me), which is not uncommon in developing countries – it’s cheaper and easier to build a network of 3G cell towers than to run old-fashioned copper phone lines to each and every village. Rwandan universities are turning out computer science and electrical engineering majors to help build and support tomorrow’s networks, and just in the last few months Rwanda has changed their national language from French to English. This was partly a political move (tension has been high between Rwanda and it’s former colonial powers, France and Belgium, since the 1994 genocide), but also an economic one as Rwanda realizes that English is becoming the world’s business language.
On the other hand you have countries like the Democratic Republic of the Congo. Poor despite possessing great natural wealth in it’s mineral deposits, corrupt at all levels of the government, and with an infrastructure wracked by years of war (5.4 million people have died in DRC since 2002), Congo is not exactly a haven for entrepreneurs (particularly in the east). But even here there are signs of change. Seeing the success of Rwanda to the east, and Kenya to the north, and realizing perhaps that they’re missing out on a better way of living, Congo has seen many signs of improvement lately, especially in terms of government, authority, and justice. Whether it will be enough, and whether the government will have the will to continue along this path is still up in the air, but the people I know there are hopeful that things will continue to get better.
So what does all this teach us as entrepreneurs in the west?
1) In concept, entrepreneurship is easy. Find something you can do that people are willing to trade value for, and do it.
2) In practice, entrepreneurship is hard. Competition, funding, suppliers, and customer loyalty are universal concerns for any entrepreneur.
3) Government can’t make entrepreneurs successful, but it can help create an environment that fosters innovation and growth. To do this requires authority, justice, banking, and infrastructure.
One last consideration: even in the current global recession, African countries are seeing economic growth far above any so-called “developed” countries. Even with a recently reduced forecast, the IMF expects annual growth in Rwanda, Kenya, and the DR Congo of between 4% and 10%. That compares with negative growth in the US and most European countries (i.e. recession). For true entrepreneurs, now is a GREAT time to bet on Africa. (See http://www.ratio-magazine.com/20081113290/News-Analysis/Rwanda-News-Analysis-IMF-Projects-Slowdown-in-GDP-Growth-to-6.html)
Right off the bat let me say that the lessons I saw were very clearly divided into two categories, call them micro-entrepreneurship and macro-entrepreneurship. Let me start with the lessons from the micro (individual business) level.
Nowadays we don't tend to refer to places like Rwanda as the "third world", we're more likely to call them "developing countries", and that's very appropriate. Most of the people I met were living perilously close to what we would think of as "just surviving". Incomes - when they had incomes - of $10 to $20 per month were very common, and things like electricity, running water (or clean water), health care, or even a second set of clothes were rare. No one I met was starving - food is plentiful and easily accessible, and things like flour and bananas may be boring but they'll keep you alive. But for people living at this subsistence level, any development that improves in their standard of living can be huge, so even though they may not have formal educations many of these people have lived through a crash course in entrepreneurship.
This was especially true with the people I met who were clients of (or who wanted to become clients of) GodCares' micro-financing program.
(a GodCares micro-finance client, who buys charcoal wholesale and sells it on a street corner in Kigali)I have to admit I've never really understood micro-finance until this trip, so let me share what I learned in case you're in the same boat. Micro-finance programs are typically setup to loan small amounts of money (anywhere from $20 to $200 US) to entrepreneurs in developing countries. So how does this help?
The clearest example of a micro-finance success story I can share was the lady who sells used shoes. Before the micro-finance program she had a small stand in Kigali (capital city of Rwanda) selling used shoes (which is a big thing in a country where many folks don't have shoes). The problem she had was that her inventory was typically only 8 or 9 pairs of shoes, so when customers came by there wasn't much to choose from, and it was unlikely she would have a pair close to their size. The micro-finance program loaned her $40, which was enough to buy over 20 additional pairs of shoes for her inventory. Her monthly sales jumped from an average of 4 pairs to about 12 pairs, tripling her income (from around $8/month to $24/month).
In the village of Buqarama we talked to the residents who were requesting help to be part of a micro-financing program. They're a very poor village. The adults in the village mostly work as day laborers (even though some are way too old to be doing manual labor), and earn anywhere from 40 to 80 cents per day working in someone else's field. But if they could borrow $200 they would be able to rent their own "block" (a section of a field), raise their own crops, and sell them at the market. Instead of earning $50 for 6 months work, they would earn $200 - quadrupling their income, and their standard of living. (For perspective, pens cost 10 cents, and health care for kids is $2/year).
Micro-financing programs, when run properly, are highly beneficial to the recipients, and generally have a 90%+ repayment rate (GodCares reported 98% of their clients were paying back their loans, generally on time). But nothing is 100% successful, and what I noticed was that while GodCares screens the people who receive the funds and loosely checks their idea, they really don't have a good way to verify that the new business venture will be successful. They're counting on these budding entrepreneurs to come up with good ideas for how they will use the money to build a more effective business. Usually that works, sometimes it doesn't.
For example many of the clients we met had chosen some sort of distribution business, often buying goods in bulk and selling them locally. Several ladies in Kigali had setup businesses selling charcoal, which they purchase in bulk from a distribution truck and then sell in small buckets to local residents. That works well, but others in the Byumbe refugee camp had decided food distribution was their best option, so they would purchase rice, flour, or cooking oil in bulk from the nearest market (several days walk away), and resell it to local residents in the camp. Not a bad idea, but because several of them were doing the same business, and the residents of the camp didn't have enough money to support all the businesses, their businesses were unsucessful.
Lesson learned: Find something people need, and will pay you for, and you'll be successful. But keep an eye on your competition, and make sure there is a market for what you’re selling!
(at a gas station in Butare, this kid sells nuts, and does a little dance to get attention)The reason they ask for pens, paper, and bibles, as was explained to us by teachers at a school in Buqarama, is because they don’t have anything to write with, write on, or read. In school the teachers will fill a chalkboard with information, then wait patiently as the kids stare intently at the board and try to memorize what’s there, then they have to erase it and write the next lesson and the cycle starts again. Having a pen, a simple 10 cent pen, can dramatically change a child’s ability to learn, and so it’s worth all their time practicing “can I have pen?” just in case a visitor might one day give them one. Everywhere we went, whether we were talking to kids or parents or local officials, one thing was clear – the “reward” everyone was most interested in was a better education for the children.
Lesson learned: Investing in your own skills, whether it’s learning a few english words or getting through a difficult education, is the best reward for any entrepreneur.
Finally one thing that really stood out to me about my time in Africa was how much government matters in issues of entrepreneurship. Don’t get me wrong – even in the most inefficient & corrupt countries entrepreneurship can flourish (in fact you could argue that the Somali pirate situation is an example of unchecked entrepreneurship gone bad), but governments have the power to create an environment where entrepreneurship can grow and thrive, and as a result lift the entire economy. I call this macro-entrepreneurship.
Consider Kenya. Long considered one of the more stable African countries (despite last year’s violence), Kenya has advantages that help local businesspeople be more successful. First and foremost, because the government is (relatively) stable, there are some fundamental things that those of us in the “west” may take for granted. Authority, for example, so that crime is limited. A stable and connected banking system, so businesspeople can get loans, deposit money, send and receive money overseas, and even accept credit cards (a rarity among African economies). A fair justice system, so a business’s assets and rights are protected. And a democratic government (though some would argue that point), which means continued improvement because the voters demand it.
More specifically, Kenya’s leadership has recognized that Kenya has some unique assets that could help it’s businesses compete globally. It’s a former British colony, so most people speak english, and the education system is above average (for Africa). This means that outsourcing companies, similar to those that have been such a huge boost to countries like India, Indonesia, and the Phillipines in recent years, could easily setup shop in Kenya and take advantage of very low labor rates. The big weakness there for land-locked Kenya is their internet connectivity: right now everything is via satellite, which makes it very slow, and very expensive. Since 2005 however the Kenyan telecom industry has embarked on multiple projects to bring fiber-optic connectivity to the country, from the middle east (UAE) and from South Africa. When the first links begin operation this summer, the speed of Kenyan internet connections will dramatically go up, and the cost of internet connections will drop. It’s a win-win for any Kenyan with a Facebook addiction, but especially for businesses who will now have a level playing field with other BPO (Business Process Outsourcing) countries. This is expected to stimulate a lot of economic activity in the country, even during the current global recession. (See http://www.washingtonpost.com/wp-dyn/content/article/2009/04/16/AR2009041600941.html and similar articles).
Rwanda’s government is making similar efforts. Recognizing that their country lacks oil or minerals that might be a traditional way to improve their economy, the Rwandan government has decided their best hope for an improved lifestyle will come from positioning their country as the Communications and Technology hub for eastern Africa. Already Rwanda boasts a nationwide 3G cell phone network (very handy for me), which is not uncommon in developing countries – it’s cheaper and easier to build a network of 3G cell towers than to run old-fashioned copper phone lines to each and every village. Rwandan universities are turning out computer science and electrical engineering majors to help build and support tomorrow’s networks, and just in the last few months Rwanda has changed their national language from French to English. This was partly a political move (tension has been high between Rwanda and it’s former colonial powers, France and Belgium, since the 1994 genocide), but also an economic one as Rwanda realizes that English is becoming the world’s business language.
On the other hand you have countries like the Democratic Republic of the Congo. Poor despite possessing great natural wealth in it’s mineral deposits, corrupt at all levels of the government, and with an infrastructure wracked by years of war (5.4 million people have died in DRC since 2002), Congo is not exactly a haven for entrepreneurs (particularly in the east). But even here there are signs of change. Seeing the success of Rwanda to the east, and Kenya to the north, and realizing perhaps that they’re missing out on a better way of living, Congo has seen many signs of improvement lately, especially in terms of government, authority, and justice. Whether it will be enough, and whether the government will have the will to continue along this path is still up in the air, but the people I know there are hopeful that things will continue to get better.
So what does all this teach us as entrepreneurs in the west?
1) In concept, entrepreneurship is easy. Find something you can do that people are willing to trade value for, and do it.
2) In practice, entrepreneurship is hard. Competition, funding, suppliers, and customer loyalty are universal concerns for any entrepreneur.
3) Government can’t make entrepreneurs successful, but it can help create an environment that fosters innovation and growth. To do this requires authority, justice, banking, and infrastructure.
One last consideration: even in the current global recession, African countries are seeing economic growth far above any so-called “developed” countries. Even with a recently reduced forecast, the IMF expects annual growth in Rwanda, Kenya, and the DR Congo of between 4% and 10%. That compares with negative growth in the US and most European countries (i.e. recession). For true entrepreneurs, now is a GREAT time to bet on Africa. (See http://www.ratio-magazine.com/20081113290/News-Analysis/Rwanda-News-Analysis-IMF-Projects-Slowdown-in-GDP-Growth-to-6.html)
Sunday, March 22, 2009
PC Repair, Jungle Style
GodCares, the organization that invited me on this trip to rural Africa, has two volunteers/members in Rwanda, Prosper and Isaac. Between them they have had one notebok computer to use for typing reports and keeping track of things like our micro-financing program. That is until, in Prosper's (translated) words, the notebook was "possessed by the devil". Prosper joined us for a day in Cyangugu yesterday and I asked him to bring the possessed machine so I can work on it.
So last night he arrived at dinner and after dinner while the others met I went to work. It was somewhat urgent because there had been photos on the machine of our projects in Kaliba, and if they were sufficient then we wouldn't have had to try and sneak two of us (Wolfgang and myself) back into Congo today to get new ones.
The notebook itself is a 2004 HP with a Pentium M processor, and when I plugged it in and turned it on the power light and fans would run for about 20 seconds and then go off. No other lights, no video, no audio. This isn't good- I'm guessing it's a faulty mainboard at this point but with no replacement parts within a few hundred miles (at least). At this point I'm kicking myself for not packing my USB-to-harddrive universal converter (which I did seriously consider packing) so I could connect the HP's drive to my MacBook Pro (which Prosper also brought for me, courtesy of my friend Jean). But it's not here so to start I have an all-but-dead machine and no idea if the hard drive is still intact or if it has the photos we need.
I decide I may as well try some things. Reseat hard drive. No change. Reseat memory. No change. Remove memory. No change- and that tells me the mainboard isn't responding correctly because I should have had audio and/or visual error signals when booting with no memory. Not good. I figure there's maybe a 5% chance I can do anything with this here- especially considering I'm in a Catholic Guest House (hostel) without much light and with no equipment to speak of. But 5% is still something, so I decided to disassemble the machine to see if I could find anything fixable.
I'll spare you the details, but it took about an hour to reduce the machine down to component parts. The rest of our team kept circulating by and taking pictures- I always forget that most people, unlike me, probably don't disassemble their own computers just for fun like I do.
When fully disassembled (just a mainboard +cpu left) I plugged it back in and tried again. This time- something different! (When diagnosing different is always good because it let's you triangulate which pieces are having problems). Without a screen there was obviously no video, and there was still no audio, BUT this time the three keyboard lights flashed, then began a slow blink, and this time the power and fans stayed on! (This is normal behavior for a mainboard- the keyboard light flash is an error message that would tell me more if I had enough internet access to look it up). But I felt like a doctor who thought his patient was dead but sudenly has a pulse! Something at least is still working here.
Leaving the computer disassembled I managed to reconnect video and reinstall the memory. Success! We have video! I powered off and added the hard drive. Not good- it went back to just a power light and fans, no video and no flashing lights. Removed the hard drive, still the same.
Long story short I was able to get the notebook working again, but with a weird caveat. The first time you turn it on you usually get the "dead condition" - power light and fan, nothing else, and it powers off after 20 seconds. But if you TAP ON THE CPU before pressing power, it works fine nearly 100% of the time. (Yes, I've removed and reseated the cpu and it's heat pipe several times).
I've had to leave some pieces out (internal braces and the top piece of the keyboard) so that the cpu is easily (?) accessible for "tapping".
My best guess is that there is either a short or electrical problem in the vicinity of the cpu, and that the "tapping" is fixing it enough for the computer to start- for now. I have no doubt that this won't last for long. But for now we were able to recover all the files and reports to a thumbdrive and make our plans for today.
So I've had lots of "firsts" on this trip. First time in Congo, first time kicked out of a country, first time having to use my high school french to get around. And now I can add "my first 3rd world notebook repair". :)
So last night he arrived at dinner and after dinner while the others met I went to work. It was somewhat urgent because there had been photos on the machine of our projects in Kaliba, and if they were sufficient then we wouldn't have had to try and sneak two of us (Wolfgang and myself) back into Congo today to get new ones.
The notebook itself is a 2004 HP with a Pentium M processor, and when I plugged it in and turned it on the power light and fans would run for about 20 seconds and then go off. No other lights, no video, no audio. This isn't good- I'm guessing it's a faulty mainboard at this point but with no replacement parts within a few hundred miles (at least). At this point I'm kicking myself for not packing my USB-to-harddrive universal converter (which I did seriously consider packing) so I could connect the HP's drive to my MacBook Pro (which Prosper also brought for me, courtesy of my friend Jean). But it's not here so to start I have an all-but-dead machine and no idea if the hard drive is still intact or if it has the photos we need.
I decide I may as well try some things. Reseat hard drive. No change. Reseat memory. No change. Remove memory. No change- and that tells me the mainboard isn't responding correctly because I should have had audio and/or visual error signals when booting with no memory. Not good. I figure there's maybe a 5% chance I can do anything with this here- especially considering I'm in a Catholic Guest House (hostel) without much light and with no equipment to speak of. But 5% is still something, so I decided to disassemble the machine to see if I could find anything fixable.
I'll spare you the details, but it took about an hour to reduce the machine down to component parts. The rest of our team kept circulating by and taking pictures- I always forget that most people, unlike me, probably don't disassemble their own computers just for fun like I do.
When fully disassembled (just a mainboard +cpu left) I plugged it back in and tried again. This time- something different! (When diagnosing different is always good because it let's you triangulate which pieces are having problems). Without a screen there was obviously no video, and there was still no audio, BUT this time the three keyboard lights flashed, then began a slow blink, and this time the power and fans stayed on! (This is normal behavior for a mainboard- the keyboard light flash is an error message that would tell me more if I had enough internet access to look it up). But I felt like a doctor who thought his patient was dead but sudenly has a pulse! Something at least is still working here.
Leaving the computer disassembled I managed to reconnect video and reinstall the memory. Success! We have video! I powered off and added the hard drive. Not good- it went back to just a power light and fans, no video and no flashing lights. Removed the hard drive, still the same.
Long story short I was able to get the notebook working again, but with a weird caveat. The first time you turn it on you usually get the "dead condition" - power light and fan, nothing else, and it powers off after 20 seconds. But if you TAP ON THE CPU before pressing power, it works fine nearly 100% of the time. (Yes, I've removed and reseated the cpu and it's heat pipe several times).
I've had to leave some pieces out (internal braces and the top piece of the keyboard) so that the cpu is easily (?) accessible for "tapping".
My best guess is that there is either a short or electrical problem in the vicinity of the cpu, and that the "tapping" is fixing it enough for the computer to start- for now. I have no doubt that this won't last for long. But for now we were able to recover all the files and reports to a thumbdrive and make our plans for today.
So I've had lots of "firsts" on this trip. First time in Congo, first time kicked out of a country, first time having to use my high school french to get around. And now I can add "my first 3rd world notebook repair". :)
Wednesday, March 18, 2009
Africa So Far
OK, I've not been able to update my blog as often as I expected to. I thought I had everything planned - I knew I would have wifi for my first two days in Nairobi, and then either i would buy a USB 3G modem in Rwanda or I would use my blackberry.
The Nairobi part worked, but only barely. Kenya's problem at the moment is that they have no high speed internet connections out of the country except for satellite, which is slow and expensive compared to cables. The good news is that Kenya is getting two fiber-optic backbones into the country this summer, which should make their technology market explode. But for now guys like me have to do what we can on a slow connection, which for me meant staying caught up on emails but no time for blogging.
In Rwanda all I've had is my semi-trusty Blackberry 8830. It's working great, the problem is me: I was so smart, I knew we would be spending days in areas with no electricity so I brought only my USB cable (figuring i could charge up from my notebook when we had power) and my car charger (knowing we'd mostly be in vehicles), plus I bought a fancy solar charger too. Of course the solar charger is sitting on my desk at home, so that's no help. And I didn't want to risk bringing my notebook on the 2 weeks in Congo, so I left it at a friend's house. That leaves the car charger, and there are two problems with it. First, many of the cars here are so old and heavily used that either they long ago used the fuse for the car's cigarette lighter for something else, or they have been rewired so many times that whatever voltage is coming from the car is too bizarre or weak to charge the phone.
The second problem is that our plans have gone awry. The short summary is, the Congo threw us out. Literally! A squad of police "escorted" our luggage onto the border crossing bridge over the Rusizi river. We don't know why, but there qre many theories. We thought for a while that a friend of mine had betrayed us, but today I think this is less likely. But since 95% of our work was in Congo, and the rest is a full days drive away, we're hesitant to drive away while we're still appealing to the UN and DRC gov't to help us find out why we were kicked out and to get us back in.
So for now I beg the nuns at our Catholic guest house to plug my phone into their computer, and they always happily oblige, but then they bring it back a few minutes later thinking it's done. The bottom line is, the blackberry is working fine but I haven't had the battery charged over 5% in at least a week.
Otherwise things are good. The team, who I met for the first time here are truly wonderful people and we get along great. Languages are a challenge- of the 9 of us two speak only German, four speak German and some english (two of those also know a little french and swahili), one speaks only kiswahili, kinyarwandan, kifree, and some french, I speak only english with a little french, and Nelson speaks everything but German. It can be frustrating when we have team discussions and you want to ask a question but you have to wait through two translations, then ask the question and have it translated twice. It takes a while! But it can also be funny, when Nelson (who has great talents for language otherwise) gets confused and translates English to English (e.g. "Ask Isaac what he thinks about that idea", "OK, he wants to know what you think of that idea.", "Nelson that was English", "oh, sorry, kwa m'tana....."
But for now we mostly sit and fill our time with planning and meetings.
I'll update more when I can, and when I can find an english keyboard. Right now I'm at an internet café in Kamembe after ,aking photocopies of the letter we're sending to the UN plus six Congolese government agencies asking for help. I was proud that I managed to tell the taxi driver to bring me here so I can work and pleqse come back for me in two hours, in french. At least I think that's what I said. I guess the proof will be 1 hour and 20 minutes from now!
Also I have hundreds of photos and videos so far, but no way to upload them. I am updating my Facebook status with news as I can, because I can do that quickly and then turn the phone off to save the battery.
So: things are good, albeit frustrating, and everyone is fine. More to come later.
The Nairobi part worked, but only barely. Kenya's problem at the moment is that they have no high speed internet connections out of the country except for satellite, which is slow and expensive compared to cables. The good news is that Kenya is getting two fiber-optic backbones into the country this summer, which should make their technology market explode. But for now guys like me have to do what we can on a slow connection, which for me meant staying caught up on emails but no time for blogging.
In Rwanda all I've had is my semi-trusty Blackberry 8830. It's working great, the problem is me: I was so smart, I knew we would be spending days in areas with no electricity so I brought only my USB cable (figuring i could charge up from my notebook when we had power) and my car charger (knowing we'd mostly be in vehicles), plus I bought a fancy solar charger too. Of course the solar charger is sitting on my desk at home, so that's no help. And I didn't want to risk bringing my notebook on the 2 weeks in Congo, so I left it at a friend's house. That leaves the car charger, and there are two problems with it. First, many of the cars here are so old and heavily used that either they long ago used the fuse for the car's cigarette lighter for something else, or they have been rewired so many times that whatever voltage is coming from the car is too bizarre or weak to charge the phone.
The second problem is that our plans have gone awry. The short summary is, the Congo threw us out. Literally! A squad of police "escorted" our luggage onto the border crossing bridge over the Rusizi river. We don't know why, but there qre many theories. We thought for a while that a friend of mine had betrayed us, but today I think this is less likely. But since 95% of our work was in Congo, and the rest is a full days drive away, we're hesitant to drive away while we're still appealing to the UN and DRC gov't to help us find out why we were kicked out and to get us back in.
So for now I beg the nuns at our Catholic guest house to plug my phone into their computer, and they always happily oblige, but then they bring it back a few minutes later thinking it's done. The bottom line is, the blackberry is working fine but I haven't had the battery charged over 5% in at least a week.
Otherwise things are good. The team, who I met for the first time here are truly wonderful people and we get along great. Languages are a challenge- of the 9 of us two speak only German, four speak German and some english (two of those also know a little french and swahili), one speaks only kiswahili, kinyarwandan, kifree, and some french, I speak only english with a little french, and Nelson speaks everything but German. It can be frustrating when we have team discussions and you want to ask a question but you have to wait through two translations, then ask the question and have it translated twice. It takes a while! But it can also be funny, when Nelson (who has great talents for language otherwise) gets confused and translates English to English (e.g. "Ask Isaac what he thinks about that idea", "OK, he wants to know what you think of that idea.", "Nelson that was English", "oh, sorry, kwa m'tana....."
But for now we mostly sit and fill our time with planning and meetings.
I'll update more when I can, and when I can find an english keyboard. Right now I'm at an internet café in Kamembe after ,aking photocopies of the letter we're sending to the UN plus six Congolese government agencies asking for help. I was proud that I managed to tell the taxi driver to bring me here so I can work and pleqse come back for me in two hours, in french. At least I think that's what I said. I guess the proof will be 1 hour and 20 minutes from now!
Also I have hundreds of photos and videos so far, but no way to upload them. I am updating my Facebook status with news as I can, because I can do that quickly and then turn the phone off to save the battery.
So: things are good, albeit frustrating, and everyone is fine. More to come later.
Monday, March 9, 2009
Fundraising so far
So my least favorite activity of this trip so far has been fundraising - I *loathe* asking for money. But I did ask, and received generous donations from my church family, from Computer Troubleshooters, from friends, and from my business partners at MerryMeeting. One thing I did want to make sure of though is that all the monies donated are spent with total transparency and accountability. So here's where we are so far:
Before I left we had collected $1658.33, which I brought with me in cash (there are no ATM's and almost no places here take credit cards). So far I've spent:
$613.98 on two Garmin GPSMap 60CSx handheld GPS units from Amazon.com. These will be used by ARDR - I found out they had been having to rent these from other companies at a cost of $70USD per day in order to complete some projects. Now not only will they save that money for use in their Rwandan rural projects bu they can be a source of income by renting these to other companies.
$249 plus tax on an Asus EEE netbook. Not sure if this will be for ARDR or GodCares yet, it depends in part on where we allocate the other computers - both organizations have requested computers to help with their projects in Rwanda and Congo.
$200 to provide support for Ivette, the 15 year old girl from Congo currently living as a refugee in Kenya (see my photos on Facebook for more information)
And today I'll be venturing into Nairobi's computer supplier market to purchase $800 in used notebooks and possibly $250 in a used desktop, these also to be allocated between ARDR and GodCares based on need. I expect to pay $100 in freight to get them to Kigali too.
So the total spent so far is $1063, plus the $800 to $1050 I expect to spend today, which will already take us past the $1658 received so far. I'm happy to help from my own funds of course, but I'm also paying all my own travel expenses, which will run around $3000, so I could use more help.
My big concern so far is there's no money raised for the village roofs in Kalingi village. These are people who currently live in mud huts with grass roofs but are making mud bricks to build new, better homes for themselves. We had hoped to raise $700 per house to buy sheets of tin for their roofing so they won't have to use grass thatch again (which provides little protection from rain and wind), and there are 55 homes in the village, for a total cost of around $40,000. It's a huge number, and maybe we can't reach it - but I'm hoping we can try.
If you're able to help us help these folks, please visit my fundraising page at www.godcares.us for more information about the projects and how you can make a donation. Thanks!
Before I left we had collected $1658.33, which I brought with me in cash (there are no ATM's and almost no places here take credit cards). So far I've spent:
$613.98 on two Garmin GPSMap 60CSx handheld GPS units from Amazon.com. These will be used by ARDR - I found out they had been having to rent these from other companies at a cost of $70USD per day in order to complete some projects. Now not only will they save that money for use in their Rwandan rural projects bu they can be a source of income by renting these to other companies.
$249 plus tax on an Asus EEE netbook. Not sure if this will be for ARDR or GodCares yet, it depends in part on where we allocate the other computers - both organizations have requested computers to help with their projects in Rwanda and Congo.
$200 to provide support for Ivette, the 15 year old girl from Congo currently living as a refugee in Kenya (see my photos on Facebook for more information)
And today I'll be venturing into Nairobi's computer supplier market to purchase $800 in used notebooks and possibly $250 in a used desktop, these also to be allocated between ARDR and GodCares based on need. I expect to pay $100 in freight to get them to Kigali too.
So the total spent so far is $1063, plus the $800 to $1050 I expect to spend today, which will already take us past the $1658 received so far. I'm happy to help from my own funds of course, but I'm also paying all my own travel expenses, which will run around $3000, so I could use more help.
My big concern so far is there's no money raised for the village roofs in Kalingi village. These are people who currently live in mud huts with grass roofs but are making mud bricks to build new, better homes for themselves. We had hoped to raise $700 per house to buy sheets of tin for their roofing so they won't have to use grass thatch again (which provides little protection from rain and wind), and there are 55 homes in the village, for a total cost of around $40,000. It's a huge number, and maybe we can't reach it - but I'm hoping we can try.
If you're able to help us help these folks, please visit my fundraising page at www.godcares.us for more information about the projects and how you can make a donation. Thanks!
Sunday, March 8, 2009
Business in Africa - the bright spot
Here's something that I'll bet a lot of folks don't know about Africa: taken as a whole it's one of the fastest growing (and still growing) economies in the world. Up until recently economic growth in sub-saharan Africa (including the three countries I'll be visiting on my trip) was expected to grow by between 6% and 7% in 2009 (compared to economic shrinkage in most western countries, including the US). And even though those estimates recently got revised downwards, growth still continues despite historically low prices for many of Africa's mineral and petroleum exports.
The problem with business in Africa has essentially boiled down to three things: Culture, Violence, and Infrastructure.
While each African country is unique and stereotyping is very unfair, generally speaking Africa is still a land of hunters, gatherers, and farmers. There is a lot of history here - Ethiopia has some of the oldest churches in the world, Egypt is considered the birthplace of civilisation, and Morocco has Casablanca, my favorite old movie - but by and large almost all African villages and most of the population is agriculturally based. Business, in the modern sense of commerce, is a relatively new thing, but is really booming in many ways.
Violence is still an unfortunate part of life in too much of Africa. Last year's violence in Kenya, which was (and still is) considered a highly progressive and strong African country, showed just how deep tribal conflicts can go. There are numerous signs of ongoing problems - the arrest warrant for the President of Sudan, the suspicion of foul play in the wreck that took the life of Kenya's prime minister's wife, and the coup in Madagascar (all of which happened just this weekend). But one thing that can really help reduce violence is commerce: as people's standard of living improves they either care less about the divisions of the past or find new ways to deal with them. Plus they don't support things that can reduce that newly found standard of living - which often means their support of any causes that may lead to violence is greatly reduced. We're seeing this in Kenya and Rwanda today, where the tensions between groups of people is still present, but all sides realize that if they don't find a peaceful way to resolve their differences it can cause long-term harm to the standard of living for everyone. This is part of why Kenyans hope their truce-government holds together, and much of why DR Congo allowed Rwandan and Ugandan troops into their country to help extinguish some of the militias that have plagued eastern Congo and hampered their ability to benefit from their rich mineral reserves for decades.
Infrastructure in some countries is advancing rapidly. Here in Kenya the big news is that their first major internet backbone, between Nairobi and Dubai, will be completed this year. Right now almost all internet traffic in the country is handled via satellite connection, which is slow and expensive. Right now I'm downloading a 60MB file. Back home it would take a couple of minutes, tops. Here it's about an hour, and sometimes just stops for no reason. And it's costing me $20/day for that. And only a few hotels even offer internet. Starting this June that should all change - as Kenyan internet gets exponentially faster and exponentially cheaper, we should see an explosion in IT services (and Computer Troubleshooters will be ready!), which should lead to even more business opportunities. Rwanda and Kenya are two countries that have realized the importance of IT infrastructure, and are investing heavily in it.
So despite the economic downturn you can expect business development in certain African countries to grow much faster than the rest of the world for years to come. And I'm happy to say that Computer Troubleshooters is here riding that wave, thanks to some smart Master Franchises in South Africa, Egypt, Kenya, Nigeria, Ghana, Botswana, and Cote d'Ivoire. And interest is increasing - we expect to open in Democratic Republic of Congo, Rwanda, Zambia, Morocco, Uganda, and Tanzania over the next few years.
Today I had dinner at Galito's, a popular chicken franchise. Two interesting things about Galito's - it's not US-based like so many other food franchises, it's a South African company. And it's biggest competitor is Nando's, another South African franchise. While the KFC's Colonel has nothing to be worried about anytime soon, if they're smart they'll do what a lot of smart businesses are doing today - invest in Africa.
The problem with business in Africa has essentially boiled down to three things: Culture, Violence, and Infrastructure.
While each African country is unique and stereotyping is very unfair, generally speaking Africa is still a land of hunters, gatherers, and farmers. There is a lot of history here - Ethiopia has some of the oldest churches in the world, Egypt is considered the birthplace of civilisation, and Morocco has Casablanca, my favorite old movie - but by and large almost all African villages and most of the population is agriculturally based. Business, in the modern sense of commerce, is a relatively new thing, but is really booming in many ways.
Violence is still an unfortunate part of life in too much of Africa. Last year's violence in Kenya, which was (and still is) considered a highly progressive and strong African country, showed just how deep tribal conflicts can go. There are numerous signs of ongoing problems - the arrest warrant for the President of Sudan, the suspicion of foul play in the wreck that took the life of Kenya's prime minister's wife, and the coup in Madagascar (all of which happened just this weekend). But one thing that can really help reduce violence is commerce: as people's standard of living improves they either care less about the divisions of the past or find new ways to deal with them. Plus they don't support things that can reduce that newly found standard of living - which often means their support of any causes that may lead to violence is greatly reduced. We're seeing this in Kenya and Rwanda today, where the tensions between groups of people is still present, but all sides realize that if they don't find a peaceful way to resolve their differences it can cause long-term harm to the standard of living for everyone. This is part of why Kenyans hope their truce-government holds together, and much of why DR Congo allowed Rwandan and Ugandan troops into their country to help extinguish some of the militias that have plagued eastern Congo and hampered their ability to benefit from their rich mineral reserves for decades.
Infrastructure in some countries is advancing rapidly. Here in Kenya the big news is that their first major internet backbone, between Nairobi and Dubai, will be completed this year. Right now almost all internet traffic in the country is handled via satellite connection, which is slow and expensive. Right now I'm downloading a 60MB file. Back home it would take a couple of minutes, tops. Here it's about an hour, and sometimes just stops for no reason. And it's costing me $20/day for that. And only a few hotels even offer internet. Starting this June that should all change - as Kenyan internet gets exponentially faster and exponentially cheaper, we should see an explosion in IT services (and Computer Troubleshooters will be ready!), which should lead to even more business opportunities. Rwanda and Kenya are two countries that have realized the importance of IT infrastructure, and are investing heavily in it.
So despite the economic downturn you can expect business development in certain African countries to grow much faster than the rest of the world for years to come. And I'm happy to say that Computer Troubleshooters is here riding that wave, thanks to some smart Master Franchises in South Africa, Egypt, Kenya, Nigeria, Ghana, Botswana, and Cote d'Ivoire. And interest is increasing - we expect to open in Democratic Republic of Congo, Rwanda, Zambia, Morocco, Uganda, and Tanzania over the next few years.
Today I had dinner at Galito's, a popular chicken franchise. Two interesting things about Galito's - it's not US-based like so many other food franchises, it's a South African company. And it's biggest competitor is Nando's, another South African franchise. While the KFC's Colonel has nothing to be worried about anytime soon, if they're smart they'll do what a lot of smart businesses are doing today - invest in Africa.
First stop - Nairobi
Hello from Nairobi!
One of the hardest parts about traveling to somewhere like Rwanda or Congo is that it takes forever to get there. There are few if any direct flights to this part of the world, and even when they are they are very expensive. Here are some well known but worth-repeating tips for folks considering similar journeys:
- Use kayak.com. This site is your best friend in booking cheap travel, because it scans most of the common airline and travel sites looking for flights that meet your criteria.
- Book your "from US" travel using a major international airport - usually JFK, LAX, or IAD will get you the best flights to/from Asia, Africa, and Europe, and Atlanta, Miami, and Houston have the best flights to South and Central America. For example if I try to find flights from Atlanta to Kigali, I'll find nothing. But searching JFK to Kigali finds some flights using British Airways, and searching IAD to Kigali finds the best deal on Ethiopian Airways.
- Try to find which airlines serve the airport you're going to, and check their websites to find their flight schedules to the airport. For example Kenya Air flies daily from Nairobi to Kigali, but Ethiopian Air (which has the best rates from the US) only flies to Kigali 3 days a week. So if you use Kayak.com and look for a round-trip flight from IAD (Washington-Dulles), if you pick departure OR arrival dates that don't match with one of those 3 Ethiopian air flights your best rate will be $3000+. If you take the time to match your dates to those 3 daily flights you'll get a rate of under $1500, which is a great deal.
- Layovers are unpredictable. On my trip I was able to include a 2+ day stopover in Nairobi for less than $300 extra, which was useful for me to check on Computer Troubleshooters Kenya and meet with my friend's sister. But a stopover in Ghana, which would have also been helpful, was $1400 - almost as much as the ticket from the US! Airline pricing is magical, and has nothing to do with actual costs and everything to do with the perceived value of the ticket.
- Travel Agents are your friends. For a small fee they can do alot of the searching for you, although I find it still helps to do your own search first so you can know if what they find is really a good deal or not. And often, especially with African airlines, you'll find you cannot pay them except through a travel agent. Major African airlines - Ethiopian, Kenya Air, South African Airways, Egypt Air - do try to take credit cards via their websites, but it's not uncommon for it not to work. For my trip I did manage to successfully pay Ethiopian through their website (first time that's worked for me, out of 4 attempts) but I could not pay Kenya Air - they kept insisting my credit cards were declined, even though all 5 of the ones I tried insisted there was no problem on their side. I had to call in my friendly neighborhood travel broker to pay them through the Sabre system, and I paid them via credit card plus a $35 fee.
- Speaking of money, examine your money before you come. US dollars printed prior to 2004 may not be accepted, nor will torn bills. I ran into this trying to buy my visa for Kenya - one of the $20's I handed the immigration official was torn, and she refused to take it. Fraud is a big problem here, so they're hyper-vigilant about some details.
- On the bright side, most places will take US dollars, although local stores and restaurants may prefer (or in some cases require) local currency. Many places may take Euros and South African Rand as well, but your safest bet is to carry local currency and USD. Keep in mind that panhandling is very common here so keep some small bills or coins ready, and also theft is common so keep your wallet, purse, or whatever close to you. I keep my wallet in my front pants pocket here, because back pockets are too easy to "pick".
- Go with the flow. Airports and airlines are mostly designed to be easy for novice travellers to navigate, so just follow the signs (which are almost universally in english plus the local language, or sometimes in french + local). Be friendly, follow instructions, read signs, and everything will go smoothly.
So after 20+ hours of travel, which included a 8.5 hour flight to Rome where we refuled then continued for 5.5 hours to Addis Ababa (Ethiopian's hub, naturally) and a 2 hour connection flight to Nairobi, I finally arrived. I was very fortunate in that Vincent Njoroge, owner of Computer Troubleshooters Kenya, offerred to pick me up at the airport and take me to the hotel. All I wanted to do was sleep and take medicine (I've had a cold for about a week, which makes air travel even less fun).
I did wake up in time to take a stroll to see some local sights last night. Nairobi is a big city by African standards but would be considered a "town" back home. My hotel is right downtown, surrounded by office buildings and a sea of people (especially on a Saturday night, which is clearly "date night" here too). Adjacent to the hotel is a square where the matutus (local minibuses) all gather to get passengers. It's hard to describe the scene, but imagine 30 or 40 15-passenger minibuses all crowded onto the same street with both a driver and a hawker shouting out their destinations and trying to woo local business. Meanwhile thousands of people walk through the buses looking for one going to their destination, and dozens of street vendors walk around selling cigarettes, flowers, fruit, etc. Diesel exhaust is everywhere, and the art of walking between moving buses and traffic takes some getting used to, but the easy way is just to find someone walking in the general direction you want to go and follow them -closely!
Kenyans are friendly folks, and several tried to strike up conversations with me as I walked around. Since it was 7pm locally I was trying to find a local Nando's which was supposed to be close by for dinner (Nando's is a South African fast food franchise). No luck. But as I walked along a man named John struck up a conversation, about where I'm from, how long am I in Kenya, what do I think of Nairobi, etc. He also helped me to fend off a panhandler on one street, though I did give the guy 500 shillings (about $4), much to John's disappointment. (He said it was for crippled children, not sure if that's true or not but it's hard to pass up.) John asked where I was going, and I told him I was looking for somewhere for dinner. "Are you vegetarian?" he asked, which I thought was strange. "Because if you are not vegetarian, there is a place down there which is good local food." I asked him if he would join me, and he agreed so we headed towards the place he recommended, which turned out to be this little hole-in-the-wall joint. I like local hole-in-the-wall joints, so it looked good.
Kenya is an easy place for Americans to visit because, as a fellow former British colony, English is widely spoken and almost all written materials are in English, which included the menu in this restaurant. Still I only recognized a couple of things which were clearly Indian (Chicken Tika and Chicken Curry), but I chose something called "Beef Fry". It was served almost immediately, and turned out to be some sort of beef-bits in a gravy, with something like spinach, and a large slab of something starchy like polenta or dry grits. It wasn't bad, and I washed it down with some sort of tangerine-soda. (By the way, Coca-Cola, who distributes most soda in Africa including the tangerine thing I had, still uses original Coke formula in glass bottles here - wonderful!).
During dinner I got to know John a little - he has a wife and 3 kids, ages 22, 15, and 11. The 22 year old is a step-son. He does temporary jobs for an Indian contractor in Nairobi, but work has been slow lately. He is often surprised that I know things about Kenya. He expected me to know that Obama's family is from Kenya (and, btw, Obama signs, stickers, and books for sale are very prominent in Nairobi). He was somewhat surprised that I had heard about the violence and problems Kenya had last year. He was completely floored when I said "You mean the violence between Kikuyu and Lua?". I explained that I have many friends who are in Kenya or who have been to Kenya. He found out I was Christian and he asked me about my church, and my mission trip to Congo next week, and told me about his "born again" experience.
He also asked me about America. Does America have panhandlers like we have here? Yes, maybe not so many but we do have them. Do Americans have problems finding jobs like we do? Again yes, but maybe not as bad. Why would America elect a black president from Kenya? Because we felt he was the best choice for the job. Are black people equal to white people in America? Legally, yes, but in reality the situation is more complicated. Do Americans have malaria? No, not like Africa. Do Americans have HIV/AIDS? Yes, but not like Africa.
And then, "Do Americans realize how fortunate they are?". No, I conceded, most probably don't.
After dinner we exchanged email addresses, and parted company. John headed to find a matutu, I walked back to the Hilton. I gave him a few dollars to help with his son's school bills, and he said he would pray for me next week. All in all, it was a great way to start my month-long Africa journey.
Monday, March 2, 2009
The journey begins?
Yesterday I took some friends to lunch at the SunDial restaurant in Atlanta. The goal was to find an interesting place where my friend Paul could get pictures taken of him, his wife, and their kids that he could show to his family back in the Democratic Republic of Congo (DRC). Now any trip to the SunDial is always interesting - for those who don't know the SunDial is the restaurant on top of the tallest hotel in the western hemisphere. It's a rotating restaurant on the 73rd through 75th floors of the Westin Peachtree Plaza hotel in downtown Atlanta, and normally offers gorgeous views of the entire metro Atlanta area over the course of a meal. But Sunday was different. Sunday was snowing. Hard. And since the SunDial's glass elevators are still blacked in after last year's tornado damage, you really couldn't tell we were 73 stories up. All you could tell was we were in a big restaurant with giant windows and a big swirling mass of clouds and snow outside. The SunDial's best asset - it's view - was totally useless.
In a way though that's a good place to start the story of my trip. Becuase the pictures Paul was taking, and is still taking in fact, are for me to bring to his family when I visit them in Kenya, Rwanda, and DRC this month. I'm spending most of March on a mostly personal trip into rural Africa, partly to help an old friend and partly becuase a new friend invited me. Mostly because I feel called to go, and I can't really explain why becuase you'll think I'm crazy. But I do know that what I usually think of as my best assets - my tech skills, and my business skills - are going to be as useless as the SunDial's view when I'm walking through a region with no electricity, no phones, and no businesses.
People ask me why I'm going, and when they do I've noticed there are two very distinct types of question. One is the question asked with a look that clearly indicates the questioner is trying to determine exactly how crazy I am and how much longer they can politely talk to me before they step back into somewhere or some topic that's more comfortable. It's the same way I treated the homeless woman shuffling through a Denver burger shop last month, who included each table in turn in her one-side conversation about how her kids had never been on welfare in Kentucky. "That's good." I told her, as I focused my attention on my french fries. "That's interesting" is the response I get from my uncomfortable friends as they too find something more comfortable to munch on.
The other people ask me why I'm going with a sense of envy and excitement and anticipation. These are the people who I think will seriously consider joining me on this trip next year, and hopefully some can make it work. It's not an easy thing to get away from work and civilization for a month, and I don't know that I'll be able to do it again either. But these are the friends who either understand the need of the people I'll be visiting, or the understand the need to see what life is like for a completely different culture than mine, and they share my excitement and my nervousness and my sense of responsibility, and I appreciate that.
So this Thursday the journey begins. I'll leave Thursday for DC, leave DC Friday morning for Kenya (28 hours from first takeoff to final touchdown, yikes!), and after a couple of days working with Computer Troubleshooters Kenya and buying some supplies I'll head to Rwanda where the real heart of the trip begins. The first week and last week of my 4 week trip will be spent in Rwanda, with my friend Jean's organization ARDR, helping them in their mission to imrove the quality of life for people in rural Rwanda, especially widows and orphans of the 1994 genocide. I was there last year and saw some of the work they do, and it's overwhelming in every sense of the word how much need there is in that part of the world. I met a woman in Rwanda last year who lost her family in the genocide, but still has a banana field. Once a month she cuts down a bunch of bananas, takes them to the market, and sells them for $20, and that's how she lives. Her dream in life is to one day be able to buy a wheelbarrow so she doesn't have to carry the bananas on her head.
The other two weeks of my trip are the ones I'm more concerned about, because we'll be going into areas where the woman with bananas would be considered well off. South Kivu is a province in DRC which has seen more than it's share of war over the last decade. It's relatively peaceful now (unlike North Kivu) but there are no guarantees it will stay that way. I know people from South Kivu, refugees I've met over the last two years who live near me and who sometimes go to my church. The stories they tell are often horrifying to American senses, and I won't repeat them here but suffice it to say that massacres, killing, raping, and starvation are a sadly normal part of their life. Their government is poor, far away, and really unable to care for them. The local armies only care about what they can use from them. The international community is rarely even aware of them. So into this world where injustice and poverty are the norm, a Christian group from Germany is going to show them that even when no one else cares, God cares for them. Thus the name of the group: GodCares. It's one of GodCares principals who invited me, a man named Nelson Mukiza who grew up in this area and is now a Canadian citizen. Nelson invited me, and I realize this is not an invitation that comes along every day, so I am going. I don't know what I'm going to do when I get there - my vision on that is just like yesterday's view from the SunDial, nothing but haze and fog and swirling shapes. But I know that I'm invited, and even if they don't have electricity or businesses to run I know I'll find some way to be helpful.
If you're following my blog, I would appreciate your prayers and support too. I will do my best to keep this space updated while I'm over there, and I've included some photos and other information on my other website, www.godcares.us. If all goes well I'll be back in the US on April 4th, no doubt exhausted and thinner and with many more interesting stories to tell.
In a way though that's a good place to start the story of my trip. Becuase the pictures Paul was taking, and is still taking in fact, are for me to bring to his family when I visit them in Kenya, Rwanda, and DRC this month. I'm spending most of March on a mostly personal trip into rural Africa, partly to help an old friend and partly becuase a new friend invited me. Mostly because I feel called to go, and I can't really explain why becuase you'll think I'm crazy. But I do know that what I usually think of as my best assets - my tech skills, and my business skills - are going to be as useless as the SunDial's view when I'm walking through a region with no electricity, no phones, and no businesses.
People ask me why I'm going, and when they do I've noticed there are two very distinct types of question. One is the question asked with a look that clearly indicates the questioner is trying to determine exactly how crazy I am and how much longer they can politely talk to me before they step back into somewhere or some topic that's more comfortable. It's the same way I treated the homeless woman shuffling through a Denver burger shop last month, who included each table in turn in her one-side conversation about how her kids had never been on welfare in Kentucky. "That's good." I told her, as I focused my attention on my french fries. "That's interesting" is the response I get from my uncomfortable friends as they too find something more comfortable to munch on.
The other people ask me why I'm going with a sense of envy and excitement and anticipation. These are the people who I think will seriously consider joining me on this trip next year, and hopefully some can make it work. It's not an easy thing to get away from work and civilization for a month, and I don't know that I'll be able to do it again either. But these are the friends who either understand the need of the people I'll be visiting, or the understand the need to see what life is like for a completely different culture than mine, and they share my excitement and my nervousness and my sense of responsibility, and I appreciate that.
So this Thursday the journey begins. I'll leave Thursday for DC, leave DC Friday morning for Kenya (28 hours from first takeoff to final touchdown, yikes!), and after a couple of days working with Computer Troubleshooters Kenya and buying some supplies I'll head to Rwanda where the real heart of the trip begins. The first week and last week of my 4 week trip will be spent in Rwanda, with my friend Jean's organization ARDR, helping them in their mission to imrove the quality of life for people in rural Rwanda, especially widows and orphans of the 1994 genocide. I was there last year and saw some of the work they do, and it's overwhelming in every sense of the word how much need there is in that part of the world. I met a woman in Rwanda last year who lost her family in the genocide, but still has a banana field. Once a month she cuts down a bunch of bananas, takes them to the market, and sells them for $20, and that's how she lives. Her dream in life is to one day be able to buy a wheelbarrow so she doesn't have to carry the bananas on her head.
The other two weeks of my trip are the ones I'm more concerned about, because we'll be going into areas where the woman with bananas would be considered well off. South Kivu is a province in DRC which has seen more than it's share of war over the last decade. It's relatively peaceful now (unlike North Kivu) but there are no guarantees it will stay that way. I know people from South Kivu, refugees I've met over the last two years who live near me and who sometimes go to my church. The stories they tell are often horrifying to American senses, and I won't repeat them here but suffice it to say that massacres, killing, raping, and starvation are a sadly normal part of their life. Their government is poor, far away, and really unable to care for them. The local armies only care about what they can use from them. The international community is rarely even aware of them. So into this world where injustice and poverty are the norm, a Christian group from Germany is going to show them that even when no one else cares, God cares for them. Thus the name of the group: GodCares. It's one of GodCares principals who invited me, a man named Nelson Mukiza who grew up in this area and is now a Canadian citizen. Nelson invited me, and I realize this is not an invitation that comes along every day, so I am going. I don't know what I'm going to do when I get there - my vision on that is just like yesterday's view from the SunDial, nothing but haze and fog and swirling shapes. But I know that I'm invited, and even if they don't have electricity or businesses to run I know I'll find some way to be helpful.
If you're following my blog, I would appreciate your prayers and support too. I will do my best to keep this space updated while I'm over there, and I've included some photos and other information on my other website, www.godcares.us. If all goes well I'll be back in the US on April 4th, no doubt exhausted and thinner and with many more interesting stories to tell.
Tuesday, February 3, 2009
Do You Have to be Crazy to Start a Business in 2009?
Earlier this month I knew it was long past time for me to do a webinar for potential Computer Troubleshooters,so I started thinking about content. Normally I'd put together something about all the new features and benefits we added to the franchise over the last year, or some case studies of existing franchisees. But this year, given all the economic news we hear about constantly, I figured I should start with the big question every potential entrepreneur has to ask themselves right now: "Do I have to be CRAZY to start a business this year?".
Having settled on a title, now I had to fill in the details, so I started doing some research. Fortunately we've got a lot of experience with this, since I've personally started four businesses now and two of those were started during previous recessions. I also researched outside sources, including business publications and news articles. And I found some very interesting information - the consensus among all the experts I researched was that a recession is a GREAT time to start a business, but you have to be careful. You need to think about your business, and focus on what it will take to be successful. But if you do build a successful business during a recession, you'll be well poised for even greater success when the economy recovers. And you'll be in good company: Microsoft, HP, Google, Disney, and McDonald's are just a few of the well known companies who were started during a recession.
Why is a recession good for business? Generally speaking there are 8 benefits that any business owner will see in a recession:
But to be successful, we identified 9 principles for business success during a recession:
http://comptroub.com/downloads/webinars/ProspectWebinar1.30.09/lib/playback.html
Having settled on a title, now I had to fill in the details, so I started doing some research. Fortunately we've got a lot of experience with this, since I've personally started four businesses now and two of those were started during previous recessions. I also researched outside sources, including business publications and news articles. And I found some very interesting information - the consensus among all the experts I researched was that a recession is a GREAT time to start a business, but you have to be careful. You need to think about your business, and focus on what it will take to be successful. But if you do build a successful business during a recession, you'll be well poised for even greater success when the economy recovers. And you'll be in good company: Microsoft, HP, Google, Disney, and McDonald's are just a few of the well known companies who were started during a recession.
Why is a recession good for business? Generally speaking there are 8 benefits that any business owner will see in a recession:
- Wages are lower
- Top talent is readily available
- Office space & Retail space is cheaper
- Used equipment & furniture is cheap and plentiful
- Advertising venues are more willing to negotiate prices
- Poorly managed competitors may fail
- Building a strong foundation now can lead to explosive growth when the economy improves
- Forced frugality and tight focus are common in long-term successful companies
But to be successful, we identified 9 principles for business success during a recession:
- Must have a Strong Business Plan
It's that old adage, if you fail to plan, you plan to fail. A strong business plan will guide your actions as you get your new business off the ground, by focusing on who your customers will be, how you will reach them, and how you will make money serving them. - Must use Strong Financial Management (i.e. Waste Nothing)
Success in a recession is all about efficiency. Every dollar you spend needs to do it's part to improve your business - there's no room for waste. - Must Use Smart Marketing
This builds on the financial management principle. Not all marketing is created equal - you want to identify and implement the marketing methods and messages which will give you the most bang for your buck with your target customers. - Must Use Personnel Effectively
The reason why layoffs are so endemic in a recession is because businesses start taking a hard look at which positions truly help them reach their business goals. As a new entrepreneur it's critical that you hire the right people, compensate them fairly, and manage them well. - Must Focus on What Sells
This sounds obvious, but it's often forgotten. What sells well during a recession? Every industry has opportunities, but there are five general categories that do better than others when the economy is on the rocks:
a. "Essentials" (groceries, office supplies, internet connections, pc repair)
b. "Discounts" (dollar stores, thrift stores, pawn shops)
c. "Small Indulgences" (spas, candy, hair salons, massage parlors)
d. "Nesting Accessories" (home entertainment technology, some appliances)
e. "Productivity Boosts" (some training, some software & consulting, websites/SEO)
(And it's worth noting that Computer Troubleshooters fits in 3 of the 5 categories!) - Must Invest In Technology & Tools
Being competitive in a recession means being more efficient and effective than your competition, and that often means better tech & tools. - Must Network
The best marketing in a recession is one-on-one, doing business with people you know. - Must Treat Customers Like Royalty
Self explanatory - customer service always goes up in a recession. - Must Stay Inspired
This one surprised me, but several authors mentioned it in some form, and it makes sense. It's easy to let the daily barrage of bad news get you down, and that's especially true during the challenges of a first-year business. You need a way to stay upbeat and focused on your long-term goals. Mentors, inspirational literature, entrepreneur groups, or franchises can really help you stay positive and stay successful.
http://comptroub.com/downloads/webinars/ProspectWebinar1.30.09/lib/playback.html
Wednesday, January 14, 2009
Opportunities in '09
Whatever else happens, 2009 is unlikely to be "business as usual" for anyone. Some industries are struggling, some regions are struggling, and pretty much every small business is taking a hard look at their expense sheet to figure out where they need to "get lean". Downsizing is rampant, prices are falling, and people in general are just anxious about the overall state of the economy.
For the most part small business IT consulting has not been as directly affected by the downturn as other industries. For me personally I started my computer consulting business during the recession of 1991, grew pretty strongly during the recession of 2001, and the feedback I'm getting from our franchisees is that for the most part things are going well for them in 2008/2009. But there are some challenges, and some opportunities too, so I wanted to take a minute to outline some of the major ones:
For the most part small business IT consulting has not been as directly affected by the downturn as other industries. For me personally I started my computer consulting business during the recession of 1991, grew pretty strongly during the recession of 2001, and the feedback I'm getting from our franchisees is that for the most part things are going well for them in 2008/2009. But there are some challenges, and some opportunities too, so I wanted to take a minute to outline some of the major ones:
- Challenge: Downsizing Everywhere
- Opportunity: New Hiring Opportunities! Many small business technology firms are historically reluctant to hire, especially in areas like sales, marketing, and business management. Most firms, including most Computer Troubleshooters, are started by someone with a technical background who may not feel comfortable managing additional people, particularly in areas that aren't directly income-producing like Sales & Marketing. But there are a LOT of highly qualified people looking for work right now with backgrounds in sales, marketing, management, and accounting, and they're often highly motivated to look at more flexible salary structures (perhaps wholly or partly commission-based) than they may have considered in the past. Why not help them out and let them help you grow your business?
- Challenge: Reduced Business Spending
- Opportunity #1: Higher demand for maintenance, repair, and upgrades! While many businesses, even the ones who are doing well financially, are reluctant to invest in significant new capital projects right now because of an overall lack of confidence in the economy, their businesses still depend on technology. And while spending $4000 on a new server project may be put on hold, spending $500 to upgrade an existing server can be an attractive short-term alternative. Truthfully as a service provider we'll earn just as much for our time performing an upgrade as we would on a new install, so these sorts of short-term alternatives are a win-win for both sides: the customer gets better performance without a huge initial expense, and the service provider gets continued business and income.
- Opportunity #2: SaaS Solutions!
Another similar opportunity is the shift to SaaS or cloud-computing solutions. For a small business who can benefit from new services, for example Microsoft Exchange or calendar & project sharing via Sharepoint or Webex's Web Office, spending $50/month on a cloud-based solution can be much more attractive in the short term than paying $1000 or more to have the same solution configured and installed locally.
The value proposition to shift existing services to "the cloud" is also strong but harder to quantify on a short-term basis: for example shifting a 10-user office to Hosted Exchange would cost maybe $150 per month, and that same solution if already installed and working is essentially costing nothing - right now. But a typical Exchange implementation will cost $2000 every 3-5 years in new software, $1000 every 2-4 years in new hardware, plus on average $1250 per year in maintenance and service costs. Over 5 years the locally hosted solution cost between $9000 and $12,000 or more, plus bandwidth, power, and backup costs, while the SaaS solution is a nicely predictable $9000.
(BTW, Computer Troubleshooter's SaaS portal with 15 cloud-based solutions is launching in February!) - Opportunity #3: HaaS & Leasing Solutions! While businesses want to hold on to their cash, they still need new technology. That's where having a strong financing or leasing program is a huge help - during times like this a small business may balk at a new infrastructure project for $10k, but give them all those same benefits for just $300/month and it's great for everyone. That's why CT is happy to have some great financing partners like our HaaS partners MSP On Demand and our traditional lease partners Popular Equipment Leasing and Wirth Business Credit.
- Challenge: Downsizing puts more demands on remaining staff.
- Opportunity: Technology Solutions that provide REAL Productivity Enhancement. Businesses who must downsize will look to get more work done with fewer people, and the way to accomplish that usually involves technology. Computer Troubleshooters is ramping up support for the productivity solutions we see as being key to this: CRM, VoIP, Search Engine Marketing (more effective and less expensive than traditional marketing if done right), electronic document management, telecommuting, managed service plans, and collaboration tools.
- Challenge: People are cutting back expenditures on restaurants, vacations, and new cars.
- Opportunity: Since they're spending more time at home people are looking for Better Home Technology. This is the classic "nesting" behavior we've seen in past recessions, and it's in full force today too. And it helps that today's recession is coinciding with some really exciting new home technologies, like Windows Home Server, Apple TV, Roku, Amazon Video-On-Demand, and more. Look for the launch of www.ctonline.tv next month to show off our capabilities in these areas. But even basic tech, like setting up a media PC connected to the family big-screen so they can watch YouTube and Hulu.com videos from the couch is something we're seeing a lot of demand from these days.
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