India is filled with micro-entrepreneurs who provide a host of products & services. Most of these folks tend to have immigrated to urban centers like Bangalore and find ways to use their skills to earn a living. To a large extent their daily existence depends on their business and they really work hard to make ends meet. It is so easy to miss them and their stories as you see a lot of them in every day life. But each person has some thing unique about her/him and it is often inspiring to see how they got to do what they are doing and their approach to their business.
This is Krishnappa, he is originally a farmer from a small village near Mysore (120kms from Bangalore). He migrated to Bangalore 30 years ago and has been selling various things since to earn a living. He has no education and has had no vocational training. He has two kids, who has supported through school and, as with most others I have met, he is very clear that education is extremely important for his children to get a better life.
Krishnappa works from 8am in the morning when he picks up his produce from the market. He usually buys a sack of fruit, here he has guavas as they are in season. He then organises his products on the bike and walks all over Malleshwaram area till about 9pm selling the fruits. He has a small packed lunch from home and on days he can afford it, he has a cup of tea.
The economics of his business:
Sack of fruit (guavas) : Rs. 800 for 350 fruits
His variable cost / fruit = Rs. 2.2
He typical selling price is Rs. 3 / fruit
His average net take is Rs. 100 / day and assuming he goes through 12 inventory turns (12 sacks / month).
He usually borrow money for working capital at 5% from a local lender.
For 12 turns he borrows approximately 9600 and pays Rs. 480 / month in interest
A great candidate for micro finance – Here is hard working guy who barely is able to make ends meet and is losing 60% of his capital every year. Imagine if the interest was dropped to 30% (still high by any standard), he would have Rs 240 in additional cash every month – that is 10% in extra income for him.
I bought some fruit from him- 3 fruits for Rs. 10. Here is the best part, after our conversation, he added another fruit to my bundle and reminded me to buy from him again. Very touching and also nice to see how he was building customer relationships.