Business Skills Training for 220 Spaza Shop Owners
Tue, 23 November 2010
“The training on record keeping has assisted me knowing exactly how much money I spend and on what and how much profit I have made weekly, monthly and for a whole year”. –Mavis Potiyane, Shop Owner
IMPACT REPORT: Triple Trust Shop-Net Programme Spaza Market Development Project
This project provided business support, networking, training and joint buying opportunities to spaza shop owners that boosted local entrepreneurship and aimed to create a fairer market for the informal trading sector. In the long run the project should also benefit township consumers who will get better prices and an improved shopping experience.
Activities and Impact
The target of the project was to train 200 spaza shop owners in four modules namely: * Costing and pricing * Business management * Business health check – 4 P’s * Customer and Shop-Net systems
220 owners were trained exceeding the target by 20. The communities that they concentrated on were: Delft, Khayelitsha, Manenberg, Mithchell’s Plain, Mfuleni, Crossroads and Samora Machel. Each participant was issued with a certificate of attendance at their respective graduation ceremonies.
| Planned Activity | Actual |
| Purchase 4 notebooks | Purchased 5 notebooks |
| Purchase 1 data projector | 1 data projector purchased |
| Develop marketing (brochures, record keeping aids, pricelists) | All marketing materials were developed |
| Print 800 training manuals | 800 manuals printed |
| Recruit and train 200 shop owners | 220 owners trained |
| Prepare training reports | Reports were compiled for each training workshop completed |
| Service owners through follow-up visits to implement systems and assist with challenges identified by owners | 200 received 1st visits; 150 received 2nd visits; 60 received 3rd visits; Owners are also assisted during order taking |
| Administration | Data base developed. All supporting documents filed |
| Recruit Shop-Net members | 169 members recruited |
| Promote voluntary buying | February 2009 to September 2010: Number of clients: 1745; Number of transactions: 5225; Value: R 3 623 999 |
There were two main vehicles through which impact was created: joint buying opportunities and training.
Joint Buying Opportunities: Owners often run their shops alone and are responsible for all aspects of the business, including marketing, purchasing, selling and managing. At times the spaza shops have to close to enable the owner to carry out some of these functions. Individual spaza shops pay high, non-negotiable prices for products. The Shop-Net system was introduced to ensure that:
- The shop owner can order stock items through the Triple Trust Organisation
- Good prices and discounts are negotiated with the wholesalers / suppliers on behalf of the spaza shop owners
- Bulk buying results in cheaper products
- Stock levels improve as there is now a continuous supply of stock-on-hand
- Delivery of stock to the doorstep of the shop is at a minimal fee. This results in the owner saving on not only on transport costs but also the time it would take to collect the stock
- Shops are run efficiently and good systems in place are in place
Training: Before the training, owners did not really understand how to run their shops and were only interested in making money. Generally no records were kept and family members had access to the business' money and stock at any time. A lack of knowledge of how to price products was common and some shops were selling too much of their stock on credit. The training and follow-up visits addressed these shortcomings and the general feeling is that the training had a great impact on how shops were managed.
These are some comments from the shop owners who benefited from this project:
“I was selling products to my customers but could not keep track of transactions in the business because no records were kept. I could not determine whether the business was making a profit or loss.” - Tembinkosi Marwanqana
“Lack of knowing how to price my products made me lose customers. This was caused by the fact that I overcharged them. I used to put a mark-up of R2 on a loaf of bread not realising this was wrong.” - Lennox Xhentsa
“Capacity building has helped a lot in that I am in a position to focus on my business due to planning. Before I used to focus on what my competitors were doing.” -Fezeka Mpetshen
Expenditure
The total cost of the project is R 437 642, which has been paid in full.
| Description | Total Budget | Total Expenses | Over/Under Spend |
| Source and purchase notebooks | 40,000 | 39,942 | 58 |
| Source and purchase data projector | 10,000 | 9,188 | 812 |
| Review marketing materials | 35,000 | 35,000 | 0 |
| Finalization of training materials | 20,000 | 20,000 | 0 |
| Conduct training, recruitment, servicing existing members and client follow up | 227,000 | 470,702 | -243,702 |
| Training materials | 15,000 | 7,253 | 7,747 |
| Venue hire | 16,000 | 3,499 | 12,551 |
| Travel | 37,500 | 35,150 | 2,350 |
| Catering | 10,000 | 12,236 | -2,236 |
| Administration | 27,142 | 26,554 | 588 |
| TOTAL | 437,642 | 659,474 | -221,832 |
Notes: The staff cost element of the project was more than anticipated due intensive recruitment of shop owners for training and follow-up. To counter this, cost-cutting measures were implemented in other budget items. Examples of these measures are in-house printing of the training materials and negotiating favourable, and sometimes free, venue costs.
Challenges
- Communication with the spaza shop owners is an ongoing problem due to insufficient contact details. Triple Trust representatives update the contact details of the shop owners during their visits. There is a further problem as some of the shop owners move without notifying the Triple Trust Organisation which limits contact even further.
- Sporadic xenophobic attacks have affected some of the shop owners.
- Several owners find it difficult to attend training for 3 consecutive days as they lose sales during this time. The Triple Trust Organisation will engage with the owners to find a solution.
- Some shop owners still find it too time consuming to keep record of transactions, as they operate alone having to attend to other activities. Motivation and assistance from Triple Trust reps is ongoing.
- Transport from certain areas to the venue was a problem, especially in bad weather conditions. Some of the Triple Trust Reps offered to assist in transporting shop owners to and from the training venues.
Monitoring and evaluation
The Triple Trust Organisation has worked closely with the spaza shop owners in order to gain insight into each of their businesses. This has enabled the organisation to record the impact of training through the implementation of what the spaza shop owners have learnt.
Reports were compiled for each training workshop. These outlined what was included in the training, who attended and the response from the spaza shop owners to what they had learnt. The trainers were able to raise any concerns they had and were able to report on areas they thought were successful.
Triple Trust representatives visited 200 of the spaza shop owners and assisted them in implementing the systems they had learnt about in training. These reps also helped the owners to identify challenges within their businesses and to find solutions to overcome these challenges. Some of the businesses were revisited to ensure that challenges had been dealt with and that the systems had been properly implemented. This has proved to be a highly effective monitoring and evaluation system as it has given the organisation an opportunity to see the impact for each individual spaza shop owner.
Conclusion
The Triple Trust Organisation has already secured funding to take this project further. They will be using this extra funding to franchise stores, establish a distribution centre and allow some provision for capacity building.
This project has a long term vision which makes it highly sustainable with a good level of impact. The support offered to the individual spaza shop owners is very valuable and is reflected in the successful implementation of the systems learnt during training.
