The following are examples of economic challenges that small microenterprises face:
- Security: The theme of security in Honduras from a business perspective is a common concern for many entrepreneurs. The existence and high prevalence of theft carried out by common criminals and gang members is omnipresent, therefore endangering the sense of security of small businesses.
- Price Fluctuations: Honduras primarily imports the goods and services that are abundantly provided in country. Thus as fluctuations in gas prices occur, the prices of general products are consequently affected making it difficult for entrepreneurs to consistently and accurately budget.
- Climate Change: Climate change is a major overarching challenge that disproportionately affects small business owners whose microenterprises relies on agricultural products. With increasing temperature and decrease in annual rainfall; there is a shortage of production in basic grains that circulate the communities such as corn and beans which causes an increase in pricing and therefore less consumption.
- Seasonal Work: Cerro Bonito is a community located in Cantarranas, whose community members rely heavily on seasonal work. But challenges with this type of work include, inconsistent employment and therefore unpredictable sources of income due to a season that only lasts from December to May, working for sugarcane companies. These companies have the capacity to cultivate such a large area of Cantarranas and therefore generates employment but only for six months out of the year. As a result, many community members struggle to find supplemental employment during the off season which puts strain on themselves, their families and the overall economy of their community and its local businesses such as Nimia Bakery.
Despite Nimia Bakery’s presence in Cerro Bonito’s small community for a little over three years now, Nimia’s sales have plateaued and have shown no signs of movement. This perplexing situation has put Nimia at a crossroads in which she must determine if a loan would be beneficial to her business. Her hope would be that she could invest the capital she is loaned into expanding her business’s inventory and marketing and in return this would stimulate an increase in sales. Or, on the contrary, would the loan have no overall effect on sales complicating her business situation further. Through the support of business brigades, Nimia would better be able to discern the next steps of her microenterprise by working alongside young professionals to determine the best course of action.
One of Mrs. Cortez’s notable competitive advantages of her business lies with her knowledge of baking. Having been taught by both her grandmother and mother from an early age, Mrs. Cortez possess many years of experiences as well as numerous types of baked goods that are otherwise more difficult to purchase at competing bakeries. She has perfected her recipes and discerned which products are her best-sellers, all in the effort to improve her business. Even today, she is still the only member of the community that makes a famous sweet bread called Turrones. Her baked good represent the uniqueness she has to offer through all her products and therefore the opportunity she posses to grow her microenterprise even beyond the community of Cerro Bonito.
Mrs. Cortez has identified numerous obstacles that her business faces on a day-to-day basis ranging from educational limitations to economical obstacles. One weakness is the inconsistency in monitoring the business’s cash flow on a daily basis. This is in part due to the lack of access to education when Mrs. Cortez was a child which in turn has led to a lower understanding of basic arthritic. She knows that with increased practice in basic mathematics skills she would be able to improve her ability to monitor and evaluate her sales and expenses, and therefore increase the efficiency of her business. Additionally, another obstacles that impedes the growth of Mrs. Cortez’s bakery is her lack of access to sufficient capital in order to:
- Gain the necessary inventory that would allow her business to grow
- To maintain the assets of her business such as her oven
This is in part, due to the limitations set forth by the community bank in Cerro Bonito, and consequently, it is now in the process of improving its functionality. Lastly, Nimia’s Bakery faces the omnipresent hardship of an unstable economy due to the immense dependence on seasonal work and imported goods causing price fluctuations. Fluctuating costs cause volatility in the prices of raw goods making them more inaccessible to lower income families. Simultaneously, lack of work due to seasonal jobs causes a decrease in cash flow throughout the economy which threaten the wellbeing of local businesses. Overall, Nimia Bakery has been around for upwards of 3 years, and despite the many obstacles Mrs. Cortez faces, she continues to work tirelessly in the effort to overcome them and to watch her business thrive.
The tasks thatNimia Bakery has prioritized are:
Page Last Updated:March 24, 2020