Thursday, October 24, 2013

The Bakery Business and Mama Mimi's

So the biggest and most exciting thing in my life right now is Mama Mimi's. Mama Mimi's is a bakery business with a twist and it really works.
Most Bakeries (especially as developmental projects) fail for the following reasons....
1. They use equipment that is too expensive
2. The equipment needs electricity that is too expensive
3. There are too many bakers leading to low profit margins
4. With the bakers ownership is always an issue and leads to conflict
5. They use containers that are uncomfortable or community centres that are not good venues for bakeries
6. The product is not consistent as they need to mix all ingredients themselves
7. They are not a properly functioning business, and are not managed and run as businesses with proper records etc

Enter Mama Mimi's. Now I am the most sceptical person the planet when it comes to bakeries but this model rocks and I came on board asap. So why does Mama Mimi's work:

1. The equipment is a single wood fired oven
2. The oven is very affordable even for poor women in communities
3. The single women baker makes a great profit that she can control and she doesn't need to share it
4. Mama mimi's can set up 1000's of bakers all over the country even in rural areas
5. The bakeries are at women's homes
6. The product is very consistent as they use a premix sold to them by Mama mimi's ( this is their core business)
7. The businesses function well and are easily managed based on premix sales.

So watch this space as Mama Mimi's is going to literally take over the baking world....and its not going to be bread alone as there is already pizza and cupcakes on the menu.

How can you get involved?

You can fund a oven for R5500 ( $550) to give a woman a great start in a great business. If you need the $550 back the women entrepreneur will make enough money within the first 5 months to do so.

The story of the boiled frog

There once was a frog and he was really comfortable in his cool pond. But then the pond started to warm up just a little, and although he was aware of the water temperature rising he decided to stay. As the water became a little hotter and hotter he realised that it was too late to move and he was boiled.
This is a very famous fable for entrepreneurs and businesses, especially small businesses who often only have one large client. When that client pulls out the entrepreneur is boiled and goes under. Liquidated!
The way to avoid being a boiled frog are:
1. Generate a funnel of potential new business. This funnel should be documented onto paper and new leads followed up all the time. Some of the new leads will become real and sometimes it just doesn't work out. However without the funnel new business will never be created.
2. Strategise about new ways of doing things all the time. A good strategy will translate into new business and new leads, and often a strategy needs to be revised every 6 months.
3. My general rule is that for every 10 new leads 1 will be a success. So to have 10 new clients will mean I need to approach 100. This seems like a lot but the formula does seem to work.
4. If over time new leads don't translate into business then move on. My general rule is a maximum time limit of 6 months.
5. Keep focused on what your business does and don't stray too far from that focus. Many small businesses take on work that is too difficult because it is not part of the core business.
6. You should have many smaller clients as well as a large client. If one small client is lost then its not a train smash.

So the lesson here is important. When you are in a good place, and the water is cool and good you need to work very hard to keep it that way. The only way to do that is to generate a funnel of new business and keep working at it so you don't become a boiled frog one day.

Friday, October 11, 2013

Understanding Megatrends means you never snooze

When a corporate looks to innovate it is important to look at the bigger picture. This is called a megatrend and thanks to my buddy Klaus I believe that megatrends are important to be aware of. Things like technology or nanotechnology or health and obesity as well as ageing are all megatrends. So when you look for new ideas it is vital you look at megatrends as well to guide a possible new idea.
So one of these trends is people are getting older and older. This means that logically all investment products should be sold at birth. Thus an insurance policy or a retirement fund should be sold at birth. Once a baby is born a parent should be purchasing all these products so when a kid reaches university age they can afford it. And when people reach other milestones in their life they can afford that too. Too often people struggle when they get old but if they use the system such as compound interest or long term investment then they should be very wealthy.
The same applies to banks. Most banks and the systems they follow are geared towards" Older" persons but when will someone start a bank "only" for people between the ages of 5-16. Something unique and creative that caters for their needs in every way not just an after-thought from a large institution.
In South African culture most black men need to pay a dowry called a LOBOLA. This dowry can be as high as R100,000 or more. However no financial institution has instituted a system of savings for this niche group of "men" who if they dont have the lobola they cannot marry, often living and having children but not being able to marry even if they wish.
The lesson here is that entrepreneurs can find niche products and services either within corporates or they can develop products and services that they can later sell to larger corporates, as corporates are often quite slow to innovate. This provides some great opportunities.