Today was the second day of workshops. As I mentioned in my post about the first workshop, today the lesson focused on basic accounting / "is my business making money?" A few of the common issues / problems in this bucket:
- Tracking costs and profits
- Managing inventory
- Separating business money from personal money
In order to touch on several concepts in a short amount of time, I made up a scenario for the group to work through together. The scenario centered on a small clothing business that starts with a 500/s (el nuevo sole is the currency here) loan at the beginning of 2010. This loan is used to buy material for 10 units of clothing.
We traced through the direct and indirect costs of the business and then calculated a unit cost for each piece of clothing. Next, we used the unit cost to determine our target price and unit profit. We continued through to the second month and discussed the various options for investing profit. At the end of the second month, I made sure there would be extra inventory so that we could talk about keeping track of inventory in a systematic way.
Along the way, we discussed the various options one has for investing money, how to think about opportunity cost and the importance of tracking credit terms with materials providers. I gave the women an example "registro" (accounting / bookkeeping sheet) along with the scenario handout so that they can apply the example to their own businesses.
That's it for the workshops. I learned a lot from the women and gained great insight into the challenges they face. Now I will turn the workshops and other ideas into a resource guide for the women. Tomorrow the women are coming to drop of their goods for the market that is on Friday. DiscoverHope buys a certain amount of the goods in order to sell for fundraising in the States. On Friday the market will be open to the general public.
Finally, a few highlights from Peruvian radio. They love the 80's here, especially Bryan Adams. First I heard this in the DHF office then A-Ha, INXS, Bryan Adams, Edie Brickell and and B-52s.