March 17, 2017
Business is theoretical for most of us. We read about it, we discuss it, we go to school to earn degrees on it but we never actually do business. On the other hand some people do a lot of business without attending ‘ Business School’ or reading any books. Sure there is a balance between the two and I do believe there is something we can learn from both sides. I passed by a food vendor’s kiosk this morning and noticed a few things that can scale. I will call her Yayra for the purpose of this blog post and tell you what I learnt.
Yayra does not pay any rent. Maybe she pays a little money to the Accra Metropolitan Assembly for placing her kiosk where it was but in my opinion by owning her own kiosk she has cut off a certain recurrent cost. Once she covers the initial cost of procuring the cost, she is free. Cutting off unnecessary costs is a valuable business strategy. Her business model does not require an elaborate building (at least not at this stage) so she keeps it simple and owns something that is fit for purpose.
Recent studies have begun to focus on how quickly businesses can adapt to changing environmental factors. I believe there is even a methodology along this line called Agile. Without studying this methodology Yayra is practicing an aspect of it. She can quite easily move her kiosk if need be. She is disaster ready and has a BCP plan, a simple one: too much rain, move the kiosk! Earthquake warning, move the kiosk! Government policy impact, move the kiosk! Simple. It reminds me of last year’s demolition of the market at the Kwame Nkrumah Circle (now Interchange) which put the affected shop owners through many meetings for compensation. Yayra would not need compensation in such a case, she would only need to move the kiosk!
Yayra does not need much advertisement because all her wares are visible through the thin glass that makes up the upper part of her kiosk. Everyone who comes close can see clearly what the menu is: the steam emitting freshly cooked rice, the heap of eggs, the red stew turgid with assorted pieces of meat etc. No need for questions. No need for elaborate explanations because everything is clear. If a product needs to be explained too much then it is probably not in the correct market segment. I can imagine how utterly confused some of her customers would be if they stepped into Holiday Inn! I can imagine how difficult it is to explain to some people why a 70x50ft plot at Appolonia costs $19,000 (currently).
At Yayra’s shop, everyone determines what they want. Rice, three cedis, salad, one cedi, macaroni, one cedi. If you like, Rice, ten cedis, fish five cedis, etc. Very flexible payment plans. It is almost like the model that has become popular in the last decade or two: Pay As You Go! When customers can control their costs, they love the service provider.
What is the optimal number of staff required to run Yayra’s Kitchen efficiently? One! One, yes one! The customers can wait in queues on both sides of the kiosks. She can attend to them personally one at a time. They are not irate, they are willing to wait. This means at this stage, Yayra does not need a queuing system or an ordering system. She does not need an online portal to process orders. She does not need a nice looking reception. She does not even need another waiter, no, not at this stage, maybe later. Yayra knows what she really needs in order to keep her costs down. Do you?
It is amazing the things you can learn when you observe. It can even be more amazing if we can apply to our lives every valuable thing we learn every day. Ownership, Agility, Product/Service Definition, Customer Focus and Cost/Staff Optimization are just a few things we have seen in a slightly different light by passing through Yayra’s Kitchen. I’ll keep my eyes open. I am sure I will see more lessons in the everyday grind of life and when it’s significant, I will share with you. Please share with others.