Monthly Archives: August 2008

Micro Business – Corn Entrepreneur

This is a typical Indian entrepreneur, Malamma, with her school going daughter next to her.  I met this lady in Lal Bagh at the flower show.  Curious, I had a quick chat about her business and life.  First off, here are the economics:

Fixed Costs:
Coal = Rs. 150 ( 5 Kgs per a day)

Variable Costs:
Corn = Rs. 300 (A bag of 100 kernels)

Revenues:
1 Kernel = Rs. 10 (on a good day)

Gross Profit = Rs. 7

So this lady has to sell about 22 kernels to break even.
On a good day like this she sells 50 odd kernels.  That gives her:

Gross Profit = Rs. 350
Fixed Costs = Rs. 150
Net Profit = Rs. 200 (US$ 4)

(For simplicity, we ignored travel costs, garnish costs – lemon, salt and her opportunity costs)

So she usually sets up shop only on special occasions like these, at fairs and large public gathering.   She picks up a bag of corn from the central market early in the morning (6-7AM) takes it to the location, finds a good location and starts up the coal flames in time for customers. Malamma is great business person, she understands her customers (rainy days are better, men with their girlfriends / wives / kids buy easily) and is extremely positive and motivated. She knows that she has to be smiling and positive.  To stay competitive, she understands, location is key and has a strong voice to shout out and attract customers away from other vendors.

She works 12-14 hours a day.   She wants to build assets for her kids and educate them. Given her hard life, one might expect her to feel sorry for herself.  In fact she is happy and content, despite having  to work hard, travel long distances and bear the heat from the naked coal flame.

Talking to her is energizing, this lady who is so full of life and optimism.  She is not looking for pity or hand-outs but is working really hard to build a future for her kids, give them education and participate in the great Indian growth story.  She did not talk about what her problems were or what she does not have but focussed on what she wants to achieve.

One note: I did not notice a mobile phone with her, so there is still some market left for the operators 🙂

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