Foundations of Planning

Foundation of planning

A Manager’s Dilemma

In war-torn economies of countries such as Afghanistan, Bosnia, Herzegovina, microfinance has provided much-needed assistance to entrepreneurs and small businesses. Microfinance is the lending of small sums to poor people who would otherwise be shut out of access to capital. In the northeastern Bosnian village of Zivinice, Edina Bukvic is using microfinance to pursue a childhood dream of making wedding dresses like the ones she used to see in magazines.

Edina’s capital funding to start her business came from an initial $900 6-month loan at 36 percent interest from a nonprofit group called Mi-Bospo. Mi-Bospo is a part of Women’s World Banking (WBB), a global nonprofit network of lenders and banks that work with women in Third World and developing countries. On Mi-Bospo’s Web site, it states its purpose as “economically empowering the women because an economically empowered woman can better influence social change and contribute to the better quality of life for her family.” Without her much-needed loan, Edina probably would still be working nights in a restaurant that she and her husband own. But now she doesn’t have to work nights or weekends and usually has her shop open from 10A.M to 2P.M., giving her more time to spend with her two daughters. Edina says, “I love what I’m doing. I have more time for myself and my family now.” And she is making more money as well, netting almost $10,000 a year.

With her loan, Edina started out making the wedding dresses herself, but now finds if easier to buy them. Her inventory of 40 dresses gives customers several choices. And paying a rental fee of only $100 is a lot expensive for the brides-to-be as well. But Edina has plans for the future. She would like an even bigger business and wants to turn the restaurant they own into a large dress store with windows.  She says, “It would be the only wedding dress shop in the Zivinice region.” Edina has obtained another $7,000 2-year loan to buy 25 dresses from a wedding shop owner in western Bosnia who is selling out.

Put yourself in Edina’s position. What types of plans might she need to guide her business as it grows?

What would you do?