LCSA Ziweto Blog Entry Number Six
Victor called us shortly after his return from India, where Connect to Grow sent him to explore business opportunities with Indian companies. He was pleased to report that everything ran smoothly at Ziweto while he was away. Byton continued to coordinate operations across Ziweto and their sales and marketing manager came in from Mzuzu to support running the newly set up shop in Lilongwe. Lori was impressed that his team is so well structured — sharing roles and building a good company culture is critical to a firm’s ultimate survival.
Critical Issue #1: Unit sales and profitability
Victor reflected on the last call with Krishi Utsho. Having just closed out the first quarter, Victor could report 42k in revenues from all shops, showing an increase in sales over the prior year. As he reviewed his findings, Victor admitted they hadn’t formalized all of the comparative reporting. Additionally, he was concerned because there were a lot of expenditures in the end of the first quarter, making his bottom line look worse than he had hoped.
Lori shared her perspective that the business isn’t going to live or die by one quarter, and the most important thing is that your sales are increasing. She urges Victor to look at the percent of revenue increase, year over year; how many customers are coming, number of sales per customer. The business will only grow as much as the top line is growing.
Lori recalls working for a multi-millionaire in her younger days, a man from Minnesota with a true rags-to-riches background, and the key lesson he gave her was that you can’t save your way to success. In any business, you can’t take shortcuts, save money, or stop buying, because it won’t make any difference to your long-term success. The only thing you can do is continuously raise your top line. So the first thing Lori does every morning is look at what her business sold yesterday. Because if that’s not the most important thing, the business won’t grow. She recommends that, as the leader, Victor should make sure that each franchise is focused on goals and objectives, such as getting a new customer every day, or selling one more product each day.
Victor says that he believes sales are up 30% from the year before, due to the new Lilongwe store and expansion. He has a clear picture of the company owned shops, but he needs to develop a better system for the franchised shops to measure and report that their top line is increasing on a daily basis. Lori concurs, saying that it is a good use of Victor’s time and energy, and nothing he will ever regret. He should spend some time understanding the goals in numbers, and working with each franchisee to set a goal and develop a plan to meet it. She asks that by the next call, Victor has developed a simple strategy with one or two numbers for each franchise to hit on a daily, weekly, and monthly basis, and a plan for following up and holding them accountable. A one-page report is perfect — Focus on Sales, and the rest will fall into place like magic.
Victor does have sales reports that come in, but admits they haven’t yet used the information effectively to conduct deep analysis and strategies for increasing. He will work with Byton to develop a plan. This will also help with their marketing strategy. On the last call, they heard a bunch of interesting and not-exactly intuitive strategies that Krishi Utsho uses to market to their customers. Lori remarked on the simplicity of the programs used, remembering that today, in 2017, people have short attention spans — and bull horn marketing, while abnormal in the Western World, actually makes sense when you’re thinking about busy people going through their days.
Lori follows up with Victor, asking if he’d continued the Facebook marketing plan. Victor explains that with Hester’s new shipment of Newcastle vaccines, he is going to try another methodology. Since he hopes to capture more business-to-business customers, in the form of other shops and larger farmers and coalitions, he believes that a direct person-to-person marketing experience will best convey the value of this offering. It’s a new market, and he feels it needs a new strategy. Lori simply cautions him to keep track and decide what metrics he will use to ensure it is a good strategy. What is the close ration? How many visits does it take to make a sale? Keep track so he knows what works. Figure out what activities actually work, then keep doing those activities every day.
Critical Issue #2: Capital and Expansion
Overall, Victor’s focus has been tying up relationships with key suppliers and optimizing his supply chain. Locally, he is initiating exclusive distribution contracts with three different suppliers. His trip to India highlighted several other options. First, he met with an import/export company that works with manufacturers to package and ship products to Africa. This opportunity could save money and help with branding, giving Ziweto the chance to repackage products with their own logo. Another opportunity was with an organization called Sanzyme, an alternative livestock medicine producer that uses biotechnology to produce probiotics, enzymes, and hormones that work as a replacement of conventional antibiotics and medicines. While Victor finds this concept interesting, he needs further research to understand the efficacy and safety of this new technology, and fears Malawi’s stringent registration process would impede productivity.
His primary reason for going was to speak with Hester, a poultry vaccine producer in India. Victor was able to tour the facilities, meet the staff, and accomplished his primary objective of securing the contract to become Hester’s exhaustive distributer for their livestock vaccines and other animal health products in Malawi.
This is important to Ziweto’s mission, because the current supplier of the vaccines has been unreliable. The vaccine inoculates against Newcastle disease, which wipes out 80–100% of a chicken herd and is endemic in Malawi. Currently, the type of vaccine they are getting is very temperature sensitive, meaning that Lead Farmers cannot reach the smallholder farms quickly enough for the vaccine to remain effective. Hester’s formulation can tolerate 37 degrees Celsius (98F) for up to ten days. Access to this technology would create jobs for women and young people who could administer the vaccinations, and would result in more farmers having more chickens and eggs to eat and sell.
Victor has already placed an order with Hester as a pilot program, and if the relationship bears well, Connect to Grow may provide a grant to support Ziweto to establish a vaccine cold hub and invest in a refrigerated truck to improve the supply chain of the vaccine with an aim of increasing uptake of the vaccine among smallholder farmers in Malawi if they end up scaling up the project, they will work on a joint venture to invest in a vaccine production unit in Malawi using shared technology. At this point, they are waiting on Connect to Grow’s investment team to review the proposal.
We are excited to hear about Victor’s adventures goal-setting and developing reporting strategies with his franchisees, as well as how the veterinary shops and farmers take to his new shipment from Hester! Perhaps we will even get an update on Connect to Grow’s additional investment! Either way, we are anxiously awaiting our last call with Victor and Lori!
Read the previous Ziweto Blog Post Here
Read the next Ziweto Blog Post here.