It’s Not Good Business if you Loose Money

Before we say anything let us say this, MaderaVerde is one of the best NGOs we’ve seen in Honduras, and we’ve seen a lot. Like any business, thought, they’ve had their challenges during these growth years and here is where Max and I can help. For example, although Honduras’ inflation rate is estimated at 7% every year, the prices of the furniture they sell has not been updated in over three years. The cost of wood and other materials has increased significantly, and the artisans say they loose money on some of the furniture they make. MaderaVerde has a great staff of people working for the foundation, but most of their resources are currently focused on creating management plans for the woods, leaving very little time and money to spend on production and sales issues. It is not that they do not want to focus on that, they just haven’t had the resources or even the knowledge to do it. Currently, you can buy a beautiful hand-made chair, made out of semi-precious tropical woods cheaper than an ugly chair made in China. Such precious work is the cheap option in town.

Also, when you place an order from MaderaVerde, you might have to wait 6 to 8 months before you get your furniture delivered, since at the time of your order they start processing the permit to cut down the tree that will eventually be your chair. Getting the permit, cutting the tree, drying the wood, making the chair are all lengthy steps in the production process. If you are a potential client and you do not have a dinning table, you are not happy with waiting 6 months to get your order.

Artisans would love to have a stock of dried wood to make the furniture faster but they don’t have enough money to stock up. Since they even loose money on furniture, they barely even have money to buy wood for the small orders they get, having to borrow money from the foundation almost every time they buy wood. The situation is aggravated by the fact that none of them keep books of their costs or sales, so they have no idea how much they spend on each item. They have even less of an idea of how much time it takes them to make each piece.

There’s also the fact that they have a catalogue of more than 100 products, each of which can be made one of or a combination of about six different woods. Some woods are harder to work with, or valued higher at the market, but today you will pay the same price for any of the woods.

Each artisan owns their own shop, and they are divided in 6 communities, which make consistency in the products an issue. These communities are hours (some days) away from each other, most with very little or no means of communications other than radio or a message sent by bus. The artisans all love what they do, but not all know how to keep their quality high. Often times the foundation has to reject products due to their poor quality, and the artisans are not inclined to keep their tools in optimal shape. They just don’t understand why that is important.

With all these challenges there’s a lot for Max and I to do. We’ve met with the artisans and there are a lot of ideas floating in the air. For the next few weeks we are focusing on doing a time and cost study that will help us define appropriate prices for the furniture. Sounds like a simple task, but when you have to travel for hours, if not days, and there’s no car available or it is raining so much that a few bridges between here and there are broken, all of the sudden it becomes a task as hard as moving a mountain. Again we want to get moving quickly and start solving problems but there’s a million things preventing us. Also, you can not just show up at a place and start working. It has to be a trip of several days during which you spend at least the first day socializing and getting to know people. They will only open up to you and let you help them after they feel comfortable around you.

This is all an exciting challenge to us. We really see great prospects for the artisans and their organization and we really hope they start seeing the fruit of their hard work soon. We feel the same way about our work with Garifunas on the coast, but that's a whole other story...