The informal entrepreneur:
between efforts
and little wealth
ARNAUD SEGLA
Segla, Arnaud, 1978-, author
The informal entrepreneur:
between efforts and little wealth
ISBN: 979-8443544618
Legal deposit
Bibliothèque et Archives nationales du Québec, 2017 Bibliothèque et Archives Canada, 2017
Book and cover design: Amaru
Cover illustration: © Alistair Cotton
Translation: ldoron – Fiverr.com
admin@thewisemencouncil.com.
Sommaire
Introduction 6
OBSERVATIONS 8
Effort 8
Offer 11
Creativity 15
Random sale 18
ANALYSIS 22
The importance of the mastering of a community marketing strategy: managing the clientele’s interest 22
Regrouping is paying in informal entrepreneurship: optimization of the usage of resources 29
The creation of richness is a question of effectiveness: Lean effort 32
Conclusion 35
In the indifference of powerless looks
The informal economy has always stirred a lot of writing but in fact it’s a human experience to live that consists, most of time, playing an ungratefully, a role of seduction to buyers. The latter are consuming randomly due to budgetary rigor. Therefore, the indifference appears in instead of the primary attitude of communities that must, ideally, show solidarity with their entrepreneurs.
Once again, the recall of the necessity to acquire economic power by Wealth and Pride through ethnic identity will lead popular communities to re-appropriate the course of time towards the accomplishment of their destiny.
“Each Human is
important to the eyes of God.”
Introduction
Whether we are the apprentice, an ambulant vendor, in the market or on a proximity display, we are nourished
with the same intention to earn what we need to afford a meal, the maintenance of an individual, a couple or of a family. Everything begins with the need of household income that lead to informal entrepreneurship. At the favor of historic influences and heritages, external economic models were imposed to Africa and in numerous third world countries. This is done not taking into account the popular realities, if it is not acknowledging the powerlessness to integrate the dynamism of the informal economy into the schemas of the governance of states. The two systems have been coexisting for long now without really seeing the transition of the informal to be an alternative to the dominant and oppressing model of the market economy which serves as an actual reference. Can we however envision that this transition is done by the autonomous development of the informal to become a quality revenue sharing framework? The first step is without a doubt to familiarize yourself with the characteristics of this sector and then to identify its dynamic to finally present a model accessible to all and simply applicable without necessitating a real academic curriculum. The present analysis therefore permits to have a first look from the outside, as much as possible, by taking a step back.
OBSERVATIONS
Effort
The first image that is printed in the retina and then in the mind of the person that observes informal entrepreneurs is the abnegation with which they provide a repeated effort day after day to earn whatever they need to survive, if it is only to survive. For a display seller, it is especially in the patience that the effort lies while for apprentices and ambulant vendors, physical endurance is put to use.
This effort comes from a form of stubbornness that pushes to persist and believe that the following instant will bring good sales. There are good days and bad days but the informal entrepreneur shows proof of consistency in the exercise of his career. What would they otherwise do if it is not suffering the ups and downs of unemployment and exposing themselves to the temptation of criminal drifts? We sense a form of belief that there is an active force above them that brings in the next client. This invisible economic hand or simply this providence always brings back to the unique Source that takes care of lower classes and that many call, God.
Recently, I declared that “Work brings about dignity, but entrepreneurship bring about pride”, but in the case of informal entrepreneurship, activity is at a time a substitute to the job market and is an ersatz of the market system. Which makes me say that, here, informal entrepreneurship preserves identity if not “humanity” of these actors. Dignity is conceded by the consideration of other people and the pride comes from a deep and personal feeling endured in the heart. The identity if not “humanity” is preserved by the informal entrepreneurship that is at a time concerned with the status of the individual but also the value of the community particularly when it serves as a valve to the consequences, that are regrettable, of the deficit in the sharing of revenue. Finally, we can notice that there is here a lack of vision and execution in being actors who reclaim their economic Future.
Whatever may be said, this effort drives towards fewer results compared to the quantity of energy that is inputted.
Offer
The offer of products and services of the informal entrepreneurship is very rich in diversity and volume. There are products for all tastes and styles. As well, there exists, more often, a “season” of this same offer in the same day, throughout the week, the month, etc. Therefore, in big cities, the sale of newspapers can be done mainly in the morning, the sale of water with the appearance of heat as of noon, candy at snack times. As well, certain places are more suitable to certain types of products, for example, congested roads for gadgets or the surroundings of schools and universities for candy or even the downtown cores for clothes, ambulant cafes, etc.
The vendor moves throughout the place that is generally known for the occurring of sales. We are in a logic that is similar to that of the hunting or fishing where flair and intuition push to detect the best catching conditions. This explains the presence of an important number of vendors in certain places in cities that share the traffic in a form of passive competition intercut with moments of confusion and speculative debates to attract the client’s attention.
Most often, the supply of these entrepreneurs of the street come from popular markets where the vendors are practically all integrated in the regular local economy (through retail space royalty fee or fiscal stamp). They and certain service operators act as wholesalers and even employers when they need a simple distribution network and favoring the proximity with the population (resale of telephone credit recharge, selling of non-artisanal ice cream, etc.) The offer consists often of imported low-cost products, of manufactured or prepared products (we will see it further) that correspond to the needs and buying power of the middle and lower classes. The purchase is done as a form of reimbursable loans under delay bound to the sale of the merchandise. That leaves little place to the growth of the business. In fact, after the sales and after having reimbursed the purchase (for the most performant people) there leaves little money for one, knowing that a part of it is used in parallel in personal maintenance and that of the family. It therefore establishes a system of dependency as the purchases of merchandise can be rarely made cash. Little arrives to therefore emerge without the support of a good management or tools such as rotational financing (tontine).
Therefore, the choice of products is often dictated by the capacity of investment of entrepreneurs (with little financial means we can be pleased by buying a limited stock or lowcost products). It is not rare to question the capacity that certain products have to be sold and the pertinence of the choice that dictated their selection. We must take into account the fact that regular merchants sometimes lower the prices to get rid of products at the end of their potential or cycle. This is suitable to feed the offer of informal entrepreneurship where the actors will take with them the effort of conquering the reservations of clients.
Notable point, services (like window washing, or suits, or shoe repairing, etc.) do not completely obey this description in the sense that they provide a know-how for the object or a helping hand for the relief of the client’s duties. In the case of fruits, the risk is more important due to the losses by the unsold.
The offer of informal entrepreneurship is therefore characterized by the volume, the diversity and tendencies of the people’s local market. In fact, it draws its substance as a last link of a filial of products at low prices or of products of first necessity.
Creativity
The offer of the informal economy is not always made up of the purchase and resale of merchandise. In many cases the entrepreneur himself makes the product or learns a short-term job. This is the case notably in artisans and apprentices, creators of artistic objects, or even vendors of snack food and other candy that they prepare themselves. In this case, the marquee fact is the creativity shown by these “producers” or “transformers”. However a dilemma, between diversity and similarity, appears when an important number of creative actors operate in the same conditions, with the same materials, with the same knowledge, etc. Diversity is therefore drowned because of what I call “the creativity of scale” that gives a copying effect and where personalization is only visible at the elementary level.
For a sector that is very in vogue and stable like hairdressing, the weak entry barrier that plays on the number of operators makes diminish the immensity of talent of those where creations differ from one shop to another. We must also take into account the trends and fashion effects that foster creativity without fully limiting it.
In the case of ambulant snack food vendors, products are deliberately the same since they correspond to well-established consumption habits. The goal is therefore to participate in the offer of the product without a particular desire to differentiate if this is not in the selling speech or the presentation.
Certainly, know-how is prior to creativity. Given that we are all in a logic and strategy of specialization of the career and of weak differentiation. The copy of a model is, on the other hand, justified by the success of itself. Up until a pseudo saturation of the market under the form of a conversion in the standard mode of production or output. Under this angle, the impact of innovations is also lessened in the time or space of numerous communities of entrepreneurs if the parameters that led to their occurrence become accessible. There is no real mechanism of protection of intellectual property rights and keeping the secret of winning formulas calls generally to forgery which is another flaw (of creatives or reactives).
Creativity and innovation of an important number of individuals in the same conditions of production gives a genre effect to the career body that they belong to while limiting the contrast in the strategies of differentiation. The perverse effect, in appearance, is that it leads, in paradox, a specialization of the clientele (by proximity or fidelity) instead of those of the products. Therefore, the multiplicity of creative sources bring these entrepreneurs to essentially live at the expense of their nearest community without the potential of long-term expansion.
Random sale
In one day, the efforts put in by informal entrepreneurs bring little fruit. There is no proportionality neither a real correlation between the energy put in and the turnover. Sales are triggered in a random way on the manifestation of interest, weakness or argumentation challenging the client passing along. Your regard and nonverbal language are constantly surveyed and read to trigger a catching process from where we free ourselves most often by the coldness, indifference or a powerless “no!”, it being supplying as it is contemptuous. The experience of vendors bring them to find favorable profiles, places and situations. The skill to conclude, in a few seconds, a sale and to reproduce it the most often possible throughout the day assures a substantial final revenue.
Like we have said, on the side of the entrepreneurs, there is in the prospection, nearby mechanisms of the instinct of hunting or fishing. On the side of the members of the community we are in a schema of ritual or life habits. It is easier to orchestrate the daily spending of a household when we obey to a stable rhythm of consumption justified by the level of income or social class. This imply also social interactions and relationship between community members in these life rituals. Therefore some workers will take their coffee on the side of the road each morning at a deliverer that they know well or in a random choice but with the same regularity. The delivered middle-class will buy their newspaper once they are in a traffic jam to read once they have arrived at their office. The maid will leave at 7 a.m. to buy bread for the household then at 11 a.m. to provision themselves for the preparation of lunch. All of these ceremonials or celebration around life must ideally call the analysis of informal entrepreneurs, that being hunters or fishermen, will choose the right moment to offer their products at the best price.
I talk here of the best price to take into account the price of a market connected to the game and the stake of offer and classic demand throughout time. It is not a dishonest speculation that aims solely to make a big profit for a client that is a not resourceful or not aware of local realities. This question of speculation is very penalizing for filials when each actor goes beyond their margin for an unmerited comfort.
It happens that the purchase is also triggered by a feeling of pity or empathy for the conditions of exercise of entrepreneurs whose aspect is used by the effort or is subject to abatement. It is a commendable gesture even if some will say that if they don’t sell anything, they wouldn’t stay there. The informal sector still has the chance to celebrate the qualities of humanity and not a cold system of indicators of growth, performance, management, etc. to justify the action of actors at the greater sense of the economy. We can even go further by saying that this invisible hand, from Providence, needs the relay of people sensitive to life to construct its daily action.
ANALYSIS
The importance of the mastering of a community marketing strategy: managing the clientele’s interest
As we said just before in this informal logic, the offer or the producers also called entrepreneurs adopt an attitude of fishing or hunting while the demand, consumers or even the clients follow a life ritual guided by the mastering of a budget that is sometimes critical and that does not leave place to a lot of fantasy or shopping on impulse. Putting in place what I call a community marketing strategy comes back to analyze this common ritual to most households and to adapt. There are already some efforts that were made at the level of the season and of product trends. It is desirable to go further and to offer the products when the client has a utility for them for example, selling brooms or bread when the interest for them is optimal, that is, the morning or even lamps near nightfall. Of course the consumers can move around and make their purchase at the moment and place that befits them but to have the possibility of having an offer that moves from neighborhood to neighborhood is more attractive and simplifies life. At this title, southern cultures are not all at the same level of awakening as these practices of promotion of products and services. In Benin and Togo, the ritual is pronounced enough in that it concerns, for example, the offer of a meal or snack in the streets throughout the day. What I least noticed in Dakar where it seems less diversified or exposed. In Gabon it is enriched by the cultures of foreigners that live and operate in big urban centres, if not, is more neutral in distanced cities. Here, the ethnic entrepreneurship (Africans) that develops follows the dynamic of occupancy of abandoned spaces by local populations. “Middle men minorities?”
When the demand does not follow the informal offer, we must « wake up» with bait (repeating seduction or predation like hunting or fishing depending on the ritual of prey; which we can call economical frequentation that can be mutual when the demand need also utilities) without waiting for it to come to us because it has a need. I remind that in a community economy the central point is the accomplishment of the entrepreneur that is put to the service of its community and not the over-fulfilment the consumers’ expectations as is the case generally in the market economy. In practice, this comes to play on three minimum attitudes (out of 7 to this date) : confidence, pleasure and wealth.
Confidence consists in lowering the barriers of perception (reluctances, doubts or inadequacies) towards the product or service thanks to objective arguments. Also the aspect of the display, entrepreneur’s exterior aspect, etc. are criteria to take into account. Here we play on the form or the envelope.
Pleasure consists of recognizing (tasted, touched or read) the quality of the product or service on a sample to reinforce the awareness. Therefore an ambulant vendor of snack food can sacrifice a part of his stock to make people taste on demand and add a selling speech. It is frequent enough for fruits. Here we play on the substance or the content.
Wealth consists of offering in abundance (purchase, participation or enjoyable emotion sharing) to the consumer for him to allow using his power of consumption on the product or service in order to invite him to return. Therefore a food seller can generously charge the plate of the client, or an artisan can offer derived products during an order. It is better to invest in these gifts than to lose merchandise through obsolescence, lapsing or decay. Here we play on the link or proximity.
My model describes 7 Attitudes that enables frequentation:
• Possession desire: target the client when he/she have money and is willing to spend it
• Confidence: present the product, service and sales location well to reassure the client.
• Pleasure: make the quality of the product or service known with a tested or tasted sample.
• Knowledge: learn promotion techniques and trends that are efficient
• Quality: carefully look after and maintain good characteristics of the product or service
• Definition: identify and value the pride of being involve in the success of your project without internal constrain
• Richness: Generously offer to create a relationship and invite to return.
Usually the following is used instead of “possession desire” (especially in liberal system):
• Excitation desire: create the need of spending money targeting the client by using marketing tools
In the Eco Animism model, these attitudes are reciprocal. The consumer can also put them in use in a similar way to trigger the offer of the utility with a means of investment. That why it is more a question here of mutual economical frequentation (frequent action) to share information and money within a community economic Attitude. In those two cases, it does not mean to make reductions, discounts or an auction but to play on the information (empathy vs feeling) to obtain money or utility. We do not aim to solely make a short term profit but to put in place attitudes that guarantee long term wealth. These practices, touching to human nature, are already in application, in a certain measure, in the neo-liberal economy. For what is of the informal world of southern countries, it is a strength to state that this tacit knowledge is not put in words to be shared, improved and to build a proper model. These notions will be more precise and deepened in the corpus of knowledge that is under construction and available for downloading…
Regrouping is paying in informal entrepreneurship: optimization of the usage of resources
It has happened while observing squads of hawks in Dakar and comparing them to the bands of sparrow that I desperately aimed to hit with slingshots that my brother used to make for me during my childhood. There detonates the form of organization in the predation of hawks compared to the messy excitement of the sparrow. This leads me to say that in a logic of hunting or fishing the regrouping or simple solidarity of informal entrepreneurs is preferable to “every man for himself”. It exists already a form of collaboration or a companionship effect but there, I talk again of strategy.
Whether it be for the acquisition of a varied stock or the sale as a group, all of it must be thought of to permit the client to have access, through proximity, to the product or service where there is an utility at the right moment or area. Therefore, a regrouping of vendors, rather than specializing in the sale of a single type of product, can offer an adaptable range according to the conditions or situations. For example, they can buy bread, water and dates together. And come out to sell bread in the morning, water at noon and dates at nightfall. This will permit to always be pertinent in offer throughout the day and by extension throughout the week, month, etc.
Utility is promoted to the community for its proper interest.
Forms of association such as economic interest groups (EIGs) aim too often to offer the same service or to have the same activity. It is true that specialization guarantees expertise with time but differentiation assures flexibility in the portfolio of products, clients and therefore revenue. There exists a mid-term that would be adaptation (by a dynamic strategy) to benefit from flexibility by still being an expert (versatil or transversal). It is all the interest to position yourself as a focal point and to propose a menu or range of product or service. The main advantage of regrouping is not really the only pooling of resources for an economy of scale (capital or mutual functioning funds) but more of an optimization of their usage to obtain the best result possible.
The creation of richness is a question of effectiveness: Lean effort
The essential characteristic of informal entrepreneurship is the effort deployed by these actors. It was first put in our observation. It is, according to me, the product of a force and motor guided by the individual’s faith (whatever it may be). However, the yield between effort, energy consumed, and the result, wealth, stays weak.
The simple expectation of the action of the invisible hand from Providence does not suffice anymore for the creation of wealth in a context of globalization, and then economic oppression, which exacerbate competition on a worldwide scale. This is notably by the migrations of workforce (bringing about cultural micro-shocks) and the lack of alternatives to economic reference models.
There is a uniformity of thought and a means to create wealth without the realities of the people being taken into account.
The choices of different tactics in the framework of dynamic strategy (adaptation) relies on realism (Lean intention) and consequently, pragmatism (Lean effort) to be efficient. This asks to equip informal entrepreneurs with a simple and popular knowledge of entrepreneurship codes and notions. It serves also, at the same time, to sensitize the community to its role of support in this activity sector. The challenge is to join together the target actors through appropriate canals of formation or self-formation that necessitate universities, organizations, or governments engagement to improve managerial qualities and to give, at a term, chances of conversion from the informal sector to an economic Attitude balancing market economy (Attitude vs System).
The prerequisite to all this is the acknowledgement and awareness of the deficit of integration to the local or global society to justify the necessity towards the urgency to dispose a community economic power, then national, to affirm oneself and to preserve one’s identity.
Conclusion
The informal sector is characterised by the dynamism of its activities that come as a substitute of the state social safety net that is almost inexistent or that lies on the family and community structure. In fact, it is hard to talk about economic “growth” but more of the expansion of the sector regarding the fact that the number of neglected people of the local economic system increases and they find ways to survive. The entry barriers are usually weak. We are in an entrepreneurship of subsistence without a real vision of the growth of business projects. However, there is an expressed interest to integrate the informal sector to the local economy. This desire of imposition on the informal sector must, according to me, accompany an investment in the reinforcement of capacities and self-affirmation of informal entrepreneurs by formation so that they can develop sufficiently their structure and that they can integrate durably the local Inc. It is at this condition that their contribution to the GDP will be effective. Examples of conversion and success exist but it is an entire mechanism that we need to intensify the impact. Otherwise said, the transition from informal entrepreneurship will intervene once these individuals or groups of individuals will be sufficiently stable in revenue to officially registrar themselves officially as business or be employable by an economic operator. For the time being, the value (frequentation, power and quality) of the community market preserves identity and humanity by the experience of companionship of informal entrepreneurs and the rich human experience with the consumers. Feelings and empathy. It is questionable to adjoin economic efficiency in the creation of wealth. Money and power. The legality is privileged to increase the legitimacy of the model. In fact, I will note that the curbsiders, to only take this example, are ambulant vendors that operate in these places where conditions are not licit. This corresponds more to the underground economy.
The mechanisms of the informal entrepreneurship influence ethnic entrepreneurship since they are originating the same type of actors put in different places and situations. I therefore put them in the same level in the framework of community economy. The integration of the informal sector has the potential to change the course of the economy as well as the industrial revolution that took place in the West centuries ago. It is therefore a question of the resurgence of a business culture called ethnic at a larger sense (diasporas and popular in the motherlands) that find equivalents or echoes the realities of most “southern countries” such as those in Africa.
Photo: Awa Lake Diop
Arnaud Segla M. Sc., M. Sc. Admin., CAPM. Consultant, Manager and coach in ethnic, informal and corporate entrepreneurship. I organize and animate learning activities and accompany many entrepreneurs in the attaining of the objectives of their business project.
Since 2009 I offer consulting services for ethnic and informal entrepreneurship projects within the economic and identity development for migrant workforces. I associated myself with every helping stakeholder to realize my vision with the business The Wisemen Council.
After the advent of globalization, migration for economic reasons between and within states have increased strengthening ethnic and informal entrepreneurship phenomenon. This raised the question of the installation, integration and the success of these adventurers in search of an El Dorado. We believe that entrepreneurship is a solution for the reclaiming of economic power of the popular classes by creating wealth and value.
Our goal is to improve the performance of ethnic and informal structures and the quality of their outputs. To do this, we define better strategies and projects to improve the competitiveness of our partners and the knowledge of our partners’ customers. We definitely involve our skills to serve the community. This is the meaning of the message: “Every Human is important to the eyes of God.”
Our target clientele is usually divided into 3 major groups:
• entrepreneurs and business incubators;
• universities and entrepreneurial training organizations;
• associations and organizations with a mandate to support entrepreneurs (community projects or development of entrepreneurship;
We invite you to discover our services in order to consider with us a beneficial partnership by leveraging our mutual resources to provide an efficient and quality solution for you and your customers.
The Wisemen Council is a firm focusing in strategic consulting for ethnic projects. Since 2009, it specializes in the implementation of simple management practices, effective and on measures for a better project performance and competitiveness of entrepreneurs and organizations operating in a critical financial environment. The Wisemen Council has developed an alternative method, the Ka Method, that we offer to some economic actors in the context of our Think Tank.
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