Wednesday, August 5, 2009

Home Business

My mom is oblivious to the oncoming economic avalanche. She's a recent divorcee` using the settlement from the divorce to start a wedding cake business. She lives in a small town but is near a medium-sized town (just big enough to have a public airport). Next month I'm going there to visit her.

My question is this: did any bakeries/confectioners/caterers survive the Argentinian collapse? If so, what was their angle? Since she's set on doing this, I am thinking of trying to persuade her to sell "little luxuries" like cupcakes instead of "big luxuries" like wedding cakes.

By the way, I bought your book and enjoyed it. Well, I won't say "enjoyed" it... it scared my toes off... but I appreciated the information in it. Especially your wife's advice at the end. Wish there were more articles on the web from lady preppers.

Best wishes,

Tall Sally

I’ll see if I can convince Ms. FerFAL to write a bit more :-)
I think its interesting because she went from being very naïve in some ways to very realistic of the situation we live in. Maybe not in a gun-ho type of way guys usually relate to more, but seeing things for what they are and just taking a lot of precautions, some of which I never would have thought of.
About your moms business.
Of course we have bakeries and such. In spite of the crisis Argentina is a modern country unlike some of the extremely poor dirt holes sometimes seen in movies. We have almost everything you can find in USA, including many of the luxuries. It’s just more… devaluated in general terms. And there’s of course much more poverty, the zonas liberadas I mentioned (and will post about next) , poor infrastructure outside major down town areas, etc.
Banks, shops, bakeries, and everything you can think of, those business that weren’t solid fell during the collapse or barely managed to keep running. There’s plenty of everything, but many shops went out of business and the more solid, more prosperous ones, those survived.
Which ones survived? The ones that were good at doing business.
Note I’m not saying good at what they did, but good at doing business. Two completely different things.
I know people that are very good at what they do, yet they are poor business minded, and they don’t do as well.
This means knowing the market, how to sell your product, how to advertise it, the niches to provide for, etc.
Maybe your mom knows the area well, maybe people there are sort of upscale and can afford her product, maybe it’s a rather poor neighborhood and aiming for a market with tighter pockets it’s a good idea.
These are times to be very conservative, this means being very cautious about spending money, sticking to low risk, and analyzing the market in full detail before going for it. There’s got to be no doubt in your mind that be business or deal will be successful and telling someone you trust and having his objective view as well wouldn’t hurt.
It’s not just hard work. Hard work not always = making money. People in sweat shops make clothes 15 hours a day, and that’s not making them rich.
Now, if she really loves the cake business she has in mind, then that helps a lot. When you put passion into it, and you use your head as well, sooner or latter you succeed. Sounds corny but its the truth.
Help her out listening to her, analyzing the numbers she has in mind from a different point of view, and helping her come to a decision, how to structure the business so that its more successful.
My wife’s best friend works in something related to that. She cooks for parties, weddings and events. She moves in a higher middle class market ( even if its small compared to 1st world countries) and she does ok. She’s not getting rich but makes a living.



Anonymous said...

Ferfal, since we're on the topic of weddings, did you notice if a lot of women were getting pregnant and having babies during 2002 and 2003 in Argentina? This seems to be a big thing in the US, many many women are now pregnant, and there are even ads on Craigslist and other online classifieds looking for "sperm donors".

A lot of these women seem to be unmarried and even have a couple kids already. The pregnancy boom here has been commented on a lot by internet pundits, and many men have said that it is illogical for women to want a baby during an economic crash, albeit a mild one. Yet women seem intent on getting pregnant.

I know that you and your wife were married soon after the collapse, so it was sort of natural to start a family, but I'm talking about women who have little in the way of steady salary having babies.

The weird thing is that there was a dip in pregnancies during the oil crisis in the 70s, since I was concieved during the 1973 embargo and my school classes were always the smallest, but now there seems to be a pregnancy boom.

Anonymous said...

I should note that one's business clientele isn't always what one thinks it is. I've largely been advertising in left wing and new age religious newspapers, on the theory that they are more creative and less into the technical side of computers.

Today I received a call from an old man to set up a digital camera. I went out there and his car was plastered with army stickers, turns out he's US Army retired and VERY conservative, he listens to right wing talk radio all day and has a radio in a central location in his house for it, the whole time I was there I could hear the radio host he had on viciously denouncing Obama and all things liberal.

He apparently googled "mobile computer repair" because his usual guy is visiting family in his home country, and I popped up. So research is not foolproof. However, my first business failed due to lack of research. Starting one's own business is always good, but there are many variables.

Anonymous said...

Ferfal, What businesses would you say thrived, not just got by as things went downhill? I'm thinking that there had to be some businesses (security?) that did really well.

Thanks and LOVE your blog!

Anonymous said...

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