My Entrepreneurial Life

Mi Vida EmpresarialProject Overview

Carrie Perdue

Peace Corps Business Advisor

Honduras 2010

OverviewHonduras Overview

Economic Challenges in Corquín, Copán

Project Description: My Entrepreneurial Life

Target Audience

Student Agreement

Core Courses

Microbusiness Creation

Continuous Support

Project Schedule

Project Budget

About Me

About Peace Corps

Honduras Overview

Honduras Overview

• Population: 8.0 million (with an estimated 1.0 million living and working abroad) 1

• Key Industries: Agriculture, Textiles, Forestry

• Third poorest country in the Western Hemisphere (after Haiti and Nicaragua)2

• 24.3% of the population lives on less than $1 a day and 45.1% on less than $2 a day3

• Annual per capita buying power of $2,433 vs. $8,650 in Costa Rica and an average of $7,234 in

Latin America4

• Military coup in June 2009 overthrew sitting president and sparked international outrage, leading

to a sharp decrease in international aid that has still not returned to previous levelsSources: 1. 2.3. 2001 PNUD Statistics4. 2001 PNUD Statistics

Honduras is a country rich in national resources and tourism opportunities but lacking in the economic

infrastructure and rural development needed to prosper.

Economic Challenges in Corquín, Copán

Economic Situation in Corquín, CopanThe residents of Corquín rely on unstable coffee prices for the majority of their income and often travel

several hours to larger cities for many shopping needs. These factors contribute to an environment that

would benefit from increased small business development.

Pros Cons

Corquín produces

and sells more

coffee than any

other municipality

in Honduras

• Although prices may not always be

sufficient there is always demand

from intermediaries

• Source of pride for the citizens of

Corquín

• Volatile coffee prices severely affect

family incomes

• Unlike many other crops, coffee is not

food, so farmers must sell it in order

to have money to feed their families

• Intermediaries buy virtually all of the

coffee from farmers and keep the

majority of the profits for themselves

Residents rely on

nearby larger cities

for many purchases

• Opportunities exist for new

businesses to open in Corquín to

meet some of these needs

• Additional costs are required for

citizens to travel to these cities

• Some purchases (e.g. eggs) can be

damaged during the long trip

Major Challenges to Small Business SuccessEntrepreneurs in Corquín face two major challenges to profitability in their small business endeavors: a

lack of appropriate business training and a lack of available financing at affordable interest rates.

Training Financing

Formal education does not develop entrepreneurs

• Large class size limits interactive learning

• Emphasis on rote memorization stifles entrepreneurial

development

• Even students who do study business often do not

learn key skills like accounting and marketing

Interest rates on loans are prohibitively high

• Banks have annual interest rates of 22-24% and caja

rurales annual rates vary from 26-65%

• Interest rates alone can easily make the difference

between profitability and huge losses for small

businesses

Business students often continue on to college, but

few return home to start businesses

• Students go to college to find a job, not to learn how

to start businesses

• Many college students move to larger cities (San

Pedro Sula or Tegucigalpa) to work after graduation

Caja rurales are only able to provide very small loans

• Caja rurales (small banking and micro-finance

institutions) are alternatives to traditional banks

• When a caja rural is newly formed, it can take several

years to accrue enough money to make loans

• Typically the loans given are very small ($10-$50)

Many existing entrepreneurs have no formal training

• Many entrepreneurs mix their household funds with

their business income and cannot calculate profits

• Accounting, marketing and cost calculation efforts are

often non-existent

Banks are unlikely to give loans to small businesses

• Banks typically only give credit to large, established

customers

• Smaller customers, if offered loans at all, are asked to

make unreasonably high collateral contributions

Project Description

My Entrepreneurial Life: Executive SummaryProject Description

My Entrepreneurial Life is a 12 month business incubation project that is designed to promote entrepreneurialism in the

municipality of Corquín, Copan, Honduras. The program is designed to address the two key challenges facing potential

entrepreneurs today: a lack of training and a lack of financing. Students will spend 6 months in training to learn the key

aspects of starting their own microbusiness. Upon completion of training students will receive interest-free donated funds

to either start their own businesses or improve their existing businesses. After launching the businesses, entrepreneurs

will receive on-going support for a minimum of 6 months. The combination of monitored support and initial course work is

designed to help grow the businesses into successful, sustainable income generation opportunities. This project has

been designed and will be executed by a Peace Corps Volunteer living in Corquín working in conjunction with ODECO, a

local NGO. ODECO personnel will continue this project in future years with new students if the course proves successful.

Target Audience

Who will benefit?

• Coffee growing families in

Corquín, Copan

• Primarily women and

youth, with limited space

for adult male farmers

• Aspiring entrepreneurs

• Current business owners

who want to improve

• Basics of

entrepreneurialism

• Honduran business

environment and laws

• Accounting for small

businesses

• Marketing and promotion

• Production and product

quality

• Customer service

• Business plan creation

• Assess community needs

• Identify target markets

• Conduct market analysis

• Identify microbusiness

opportunities

• Create detailed business

plans and budgets

• Manage start-up funds

• Launch and sustain

successful

microbusinesses

• Participant manual with

lectures, exercises and

homework assignments

• Weekly access to

instructor during the 24-

week course schedule

• Twice monthly in-person

visits from instructor after

microbusinesses launch

• Continuous access to

instructor by phone

• Network of entrepreneurs

Course Design

What will they learn?

Microbusiness

Development

How will they use their

training?

Continuous Support

What support will they

receive?

Project Description: Target Audience

Target Audience – Demographic Profile

Women Youth

Small Farmers

Women

• Traditionally left out of

income generation

• Have more time to

devote to starting a

small business

• Many women currently

have hobbies that they

pursue in order to

generate a small amount

of income, but lack

training to start full-

fledged businesses

Youth

• Increasingly leaving

Corquín to pursue

employment

opportunities in bigger

cities

• Some have basic

understanding of

business concepts

through specialized high

school courses

Small Farmers

• Have more free time during non-harvest seasons

• Suffer most from fluctuating coffee prices

• May possess skills required to start more technical businesses

My Entrepreneurial Life will focus on training women, youth and, to a lesser extent, small farmers, to

become entrepreneurs and create or improve existing microbusinesses to generate income for themselves

and their families.

Target Audience – Economic Profile

Coffee Farming Families

Aspiring

Entrepreneurs

Current

Microbusiness

Owners

Aspiring

Entrepreneurs

• Community members

with a business idea

or general aspiration

to run their own

business

• Desire to start their

own business and are

willing to commit to

attending 6 months of

coursework and

ultimately launching a

new business

Current Microbusiness

Owners

• Emphasis on women

and youth

• Currently own their own

businesses but lack

important business

foundations

• Desire to improve their

business and are willing

to commit to attending 6

months of coursework

Coffee Farming Families

• Deeply affected by unstable world coffee prices

• Will benefit greatly from the additional income stream generated

by the small businesses

The majority of the students selected for the program will be members of coffee farming families. Selected

students will primarily be aspiring entrepreneurs who currently do not own their own businesses. However,

a portion of the students will be current microbusiness owners who want to improve their businesses.

Target Class Profile

70%

90%100%

30%

10%

0%

25%

50%

75%

100%

Women Youth Small Farmers

Aspiring Entrepreneurs Business Owners

The majority of class participants will be women and youth from coffee growing families who are aspiring

to start their own businesses.

Women60%

Youth30%

Small Farmers

10%

Coffee Growers

90%

No Coffee

10%

Project Description: Student Agreement

Student Agreement

Course Participants

• I will arrive at class on time each week

and will pay a fine for being late or for

missing class

• I will miss no more than 3 of the 24

classes and I will personally arrange any

absences with the instructor

• I will complete all out of class

assignments myself and will not copy the

work of other students

• I will participate actively in all classes,

including voicing my opinions and

sharing my personal experiences

• I will, with the help of the instructor and

my business partners (if applicable),

create a business plan for a new

business (or to improve my existing

business) and will use this business plan

and funds from the project to start (or

improve) my own business.

Peace Corps Volunteer

• I will arrive at class on time each week

and will pay a fine for being late

• I will design the schedule so that I will

not miss any of the scheduled classes

without scheduling a replacement

• I will prepare you to start your own

business by providing you with course

materials, in-class lectures and

personal support

• I will guide you through the preparation

of a business plan for your new (or

improved) business

• I will provide you with a portion of the

start-up expenses for your business

and will help you work with banks or

caja rurales to secure the rest

• After launch, I will visit your business

twice monthly to provide support for at

least 6 months

A key component to the success of this project is selecting dedicated students who are interested in

completing the course and starting new businesses. Personal interviews and a strict student agreement will

serve to filter out potential participants who are not willing or able to make a serious commitment.

Project Description: Course Design

Course DesignOver the course of the 24 week in-class portion of the program, students will receive in-depth instruction in

8 different aspects of entrepreneurialism.

1 Basics of entrepreneurialism

• Definition and examples of entrepreneur

• Definition of micro-business and role in the

economy

• Employee vs. Entrepreneur

• Key traits of successful entrepreneurs

• Key traits of successful microbusinesses

2 Business opportunity identification

• Brainstorming business ideas

• Assessment of current business

environment

• Community needs assessment and analysis

of results

• Selection of future business opportunity

3 Accounting for small businesses

• Calculation of costs

• Inventory management

• Break-even analysis

• Basic accounting books

• Cash-flow analysis

4 Marketing and promotion

• Four Ps of marketing

• Market analysis

• Target market identification

• Marketing and promotional plan

• Price setting

• Methods of promotion

• Name and logo creation

Course Design (continued)Over the course of the 24 week in-class portion of the program, students will receive in-depth instruction in

8 different aspects of entrepreneurialism.

5 Production, product quality and customer service

• Production processes

• Production capacity and inventory

• Identify required equipment/ machinery

• Production plan

• Quality control

• Customer service

6 Honduran business environment and laws

• Types of businesses in Honduran system

• Informal sector

• Formal sector

• Registering a business

• Taxation and other business laws

7 Business plan creation

• Marketing and promotional plan

• Production plan

• Organizational plan

• Financial plan

• Project budget

• Start-up calendar

8 Managing start-up funds

• Applying for start-up funds from the

program

• Securing additional funds from other

sources

• Budgeting start-up funds

• Purchasing equipment and raw materials

Project Description: Microbusiness

Creation

Microbusiness CreationStudents will perform a variety of analyses in order to identify and select microbusiness opportunities that

will meet community needs and have the greatest likelihood of future success.

Launch and

Sustain

Successful

Microbusinesses

Start-up Fund Management

• Calculate start-up costs

• Secure start-up funding from project

and/or banks

• Manage funds to launch business

Business Plan and Budget Creation

• Create Marketing Plan, Production

Plan, Projected Financials and

Organizational Structure

• Detailed budgeting

Business Opportunity Identification

• Determine potential businesses that

could meet community needs

• Assess how personal interests and

skills fit with businesses opportunities

Target Market Identification

• Identify the market segments that will

be served by the business

• Assess demographics of members of

target market

Market Analysis

• Analyze competitors currently in the

marketplace including pricing,

reputation and geography

• Conduct SWOT Analysis

Community Needs Assessment

• Conduct interviews to gather

community opinions and feedback

• Form ideas for potential businesses

that will meet these needs

Sample Microbusiness OpportunitiesBased on a brief, initial analysis of the current business climate in Corquín, several promising business

opportunities have been identified.

Hog Farm

• Currently there are a few small hog farmers, but

market appears to have room for more supply

• Initial investment to build pens and purchase a

male pig and females for breeding would be

relatively high but the business would quickly

become sustainable

• Potential clients are restaurants, butchers and

even individual households

Personal Interest/Individual Skills

• There are currently many micro-entrepreneurs in

Corquín who are making cheese, knitting

clothes, pursuing other interests and selling their

products occasionally to family and friends

• There is a larger market for many of these

products that can be reached by starting a formal

business and promoting the products

Hen House

• Residents of Corquín currently drive or take the

bus to another municipality to purchase eggs

• Initial investment to build pens and an initial

group of roosters and hens for breeding would

be relatively high, but the business would quickly

become sustainable

• Potential customers are restaurants, small stores

and individual households

Tilapia Farm

• Fish farms are a way to diversify farm production

and the diets of Honduran residents; no

commercial tilapia farms currently exist in

Corquín

• Investment to build ponds and buy male and

female fish for breeding will be moderate

• Potential customers include restaurants, small

stores and individual households

Project Description: Continuous Support

Continuous Support Participants in My Entrepreneurial Life will receive structured support for the first 12 months of the

course and afterwards will benefit from the informal support of a local network of fellow entrepreneurs.

During Coursework During Coursework After Business Launch Forever

• In-depth coverage of

pertinent material

• Overview of each

lecture

• Key vocabulary for

each class

• In-class assignments

• Homework

assignments

• Each weekly class

session will be led by

the primary instructor

• Classes will also be

attended by an

ODECO técnico

• Instructor and ODECO

técnico will also be

available outside of

class hours to answer

questions and help

with homework

assignments

• In-depth support

during business

launches

• Instructor and/ or

ODECO técnico will

visit each

entrepreneur two or

more times each

month for at least six

months after business

launch

• Instructor/ técnico will

assist entrepreneurs

with any business

issues that arise

• Instructor will also be

available to consult by

telephone whenever

entrepreneurs need

support

• Entrepreneurs who

successfully complete

the course will have a

group of peers to

reach out to for

support

• Entrepreneurs can

reach out to their

peers for help with

specific business

challenges or

potentially to work

together in future

business endeavors

Student ManualWeekly Instructor

Support

Twice Monthly

Business Visits

Network of Local

Entrepreneurs

Project Schedule

Project Schedule

Year 2010 2011 2012

Month 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4

Identify Participants

•Caja Rurales

•Women’s Groups

•University and High School

•Existing Business Owners

Fundraising

•Local Organizations

•Peace Corps Partnership

Course Delivery

•Student Manual

•Business Shadowing

Launch Businesses

•Existing Business Improvements

•New Business Launch

Continuous Support

•Twice Monthly Business Visits

•Additional Advice as Requested

My Entrepreneurial Life is an intensive 12 month program with the end goal of creating successful,

sustainable businesses that will continue to generate income for their owners long after the Peace Corps

Volunteer leaves Corquín.

Project Budget

Project BudgetThe budget for My Entrepreneurial Life will vary based on the number of participants and especially on

the number of businesses started. If participants team up to start businesses in groups of 2 or more

people then the start-up costs will be significantly lower. Please see below for an estimated project budget.

CostPrice per

Unit

Total Cost

15 participants

Total Cost

20 participants

Total Cost

25 participants

Total Cost

30 participants

Printing - Class Manual

(100 pages)L. 300 L. 4,500 L. 6,000 L. 7,500 L. 9,000

Binding - Class Manual L. 25 L. 375 L. 500 L. 625 L. 750

Snack (24 classes) L. 240 L. 3,600 L. 4,800 L. 6,000 L. 7,200

Start-up Cost Loans

(estimate)L.10,000 L. 150,000 L. 200,000 L. 250,000 L. 300,000

Total (lempiras) L.10,565 L. 158,475 L. 211,300 L. 264,125 L. 316,950

Total (USD) $556.05 $8,340.79 $11,121.05 $13,901.32 $16,681.58

About Me

About MeEducation • University of Virginia, McIntire School of Commerce

– Bachelor of Science in Commerce with Distinction

– Concentrations in Information Technology and Marketing

– Beta Gamma Sigma - National business honor society (GPA in top 7% of class)

• Bluefields Indian and Caribbean University, Nicaragua

– Study Abroad - Development of Emerging Economies

Work

Experience

• Deloitte Consulting

– Strategy and Operations Consultant, focused in Pricing and Profitability Management

– Client experience in the Retail, Consumer Products, Chemical and Government industries

• Dell Computers

– Dell Campus Representative for the University of Virginia

– Promoted Dell computer bundles to UVA students and developed a marketing plan for Dell at UVA

• University of Virginia Marketing Department

– Assistant to the Head of the McIntire School of Commerce Marketing Department

– Built and maintained advertising database and taught Excel and Marketing topics

• Women’s Rugby

– Selected to the Under-23 National Women’s Rugby 7s team

– Traveled to Trinidad to represent the US with the All-Star Team Atlantis in December 2006

– Achieved All-American honors as fly-half for the University of Virginia for three straight years (2005-2007)

• Volunteerism

– Director’s Office of the University of Virginia Women’s Center - lead fundraising and event planning efforts

– STRIVE DC - taught chronically unemployed individuals resume writing and job skills

Extra-Curricular

Activities

About Peace Corps

About Peace CorpsMission and Goals

• To promote world peace and friendship by helping:

The people of interested countries in meeting their need for trained men and women

Promote a better understanding of Americans on the part of the peoples served

Promote a better understanding of other peoples on the part of Americans

Volunteers Serve in the Peace Corps to:

• Serve the overseas community

• Develop professionally and personally

• Learn a new language and culture

• Live in another country for two years

• Help others and contribute to world peace through friendship