As I mentioned in my previous post, I am currently presenting some changes to Fundación Paraguaya to improve their reading glasses sales and to help them recruit more franchisees (despite their vast network of clients, the current number of franchisees is quite small). After interviewing successful vendors (like Elida Sosa) and their asesoras, speaking to VisionSpring representatives, and studying other successful microfranchises, I have come up with a number of proposals.
First, I am suggesting that the organization provide more marketing support to the franchisees and help them develop professional materials. Most of the successful vision entrepreneurs that my colleague, James, and I spoke to had business cards which they designed and printed themselves. Others had posters. The posters enabled them to advertise promotions and generate interest within their communities. In my opinion, marketing is key, especially when one is promoting a specialty product such as reading glasses. Providing the vendors with business cards and nametags will enable them to present themselves as professionals, stay in touch with their clients, and compete in a very distinct market space.Second, I am suggesting a microconsignment model to recruit new vendors. Just like a consignment store, microconsignment shifts the risk away from the seller, enabling him or her to repay the cost of inventory after successful sales are made. With microloans, which have been used thus far by the Fundación to pay upfront for the cost of materials, the vision entrepreneurs assume all of the risk of the new venture. As Tina Rosenberg wrote in a New York Times article in 2011:
“Microcredit puts all the burdens on the borrowers. Debt, of course — but also initiative. Borrowers invent, plan and run their own businesses. Some people will jump at this, but many who lack confidence and business know-how will be terrified….”
Community Enterprise Solutions, a non-profit run by co-founders Greg Van Kirk and George Glickley, is another proponent of microconsignment. The organization was founded with the intention of testing, developing, implementing and expanding what Kirk and Glickley refer to as the MicroConsignment Model (MCM). According to their website, which provides an in-depth look at the genesis, functioning, and advantages of this model, “The MCM delivers essential products and services at affordable prices to the rural poor in the developing world…Through the MCM individuals who lack opportunity and experience, primarily young women and homemakers, can start their own ventures through ‘sweat equity’ and earn profits within the first month.”
Kirk and Glickley actually worked with VisionSpring in 2004 to implement a microconsignment system. According to their narrative, VisionSpring was trying to use microcredit to cover vendors’ start-up costs, but the model was not working. They concluded that a different approach was necessary, one that would address the time needed to train entrepreneurs, create awareness with regard to vision problems, and which would serve to mitigate vision entrepreneurs’ real and perceived financial risk. Kirk and Glickley proposed the MicroConsignment Model, and VisionSpring implemented it. As of August 2012, Fundación Paraguaya is the only partner that is continuing to use a microcredit system.
My third suggestion is to provide additional training and support to the vendedoras, who often have no experience in sales and could benefit from event planning techniques, basic book-keeping skills, and a well-thought-out sales pitch. Although the Fundación does provide an initial capacitación, other microfranchises (and other VisionSpring partners) generally offer a series of trainings as well as ongoing support for their franchisees. This serves to increase vendors’ confidence, helps them confront initial challenges, and teaches them effective selling methods.
Although VisionSpring’s other partners use asesoras to provide this additional training, Fundación Paraguaya’s assessors already have a lot on their plate. Each manages a large number of committees, and all are constantly traveling. It may be too much to add microfranchisee-support to their to-do list (i.e. helping to organize events, introducing microfranchisees to other communities, making sure that they have sufficient inventory and marketing material, etc.), but perhaps with the right incentive scheme, FP’s asesoras would make more of an effort to provide initial assistance as vendors adjust to a new enterprise.
Of course, in designing an incentive scheme, the Fundación would have to offer a bonus large enough to incentivize the asesoras but not so large as to impede the profitability of the microfranchise. Obviously, more research would be necessary to identify the right amount. Perhaps I can pass this off to another Ambassador…