Bali: Land Of Business Dreams And DisastersOctober 1, 2011
A time-lapse video of a typical busy Bali street would show the expected high-speed blur of activity from traffic and people, but it would also show new business premises popping into existence with frightening speed. It you kept watching, you would also see them disappear again just as quickly. Even in real-time, new businesses here seem to appear in a flash and struggle mightily for a while, only to vanish well before their initial lease period is up.
That’s just the tip of the iceberg – for every business which operates out of premises, there must be thousands run by hopefuls whose dreams of high-flying success collapse even before reaching take-off speed. For many locals, there seems to be an irresistible force driving their aspirations. The unemployed want a job. Those who are actually in a job dream of becoming managers. Managers yearn for their own little slice of the island’s chaotic economy by becoming business owners.
Many have a strong entrepreneurial streak, and firmly believe that this attribute, coupled with their ever-present dreams of riches, will be enough to propel them out of the financial mires of the ‘have-nots’ into the blessed land of the ‘haves’. Dreams are beautiful, and can act as a wonderful impetus – but for many, the dream becomes an impossible nightmare of debt and failure.
That may be because very few realise the truth of a business canard. To make your dreams come true, first you have to wake up. A true awakening involves the realisation that entrepreneurial visions alone are not enough to sustain a successful business, no matter how inspiring the big picture. Management skills are also essential, as are the specific technical skills needed to operate core business activities. Without the seamless interaction of all three elements of this trinity, a new business will inevitably struggle, if not fail outright. Many in Bali do just that.
So we see massage girls,who are excellent practitioners, desperate to open their own spa. “I just need someone to give me money”, they wail. People who can cook want to open a warung. “I just need an investor”, they wish hopefully. Talented artists want to open an little art shop. “I can just paint all day and customers will come in and buy my art”, they wistfully say.
Well, no – it doesn’t happen like that. With a background in business for many years, I try to help those (usually impoverished) hopefuls who seek my advice. Not with money, of course, because throwing money at a problem caused by lack of money rarely solves anything. It’s the reasons for the lack of money that need to be addressed. So I talk to them about business fundamentals – the need for market research, the clarity of action that can come from a carefully thought-out business plan, and the need for financial planning and cash-flow management. I ask whether they have considered how they will approach issues of tax, permits, local fees, salaries, stock purchasing and the ubiquitous ‘protection’ fees that bedevil enterprises here. I mention the need for record-keeping, promotion and marketing.
At this point, I usually get the patented Bali thousand-yard stare, and the somewhat impatient response, “No, I don’t need to know all that. I just want to start a business.” Sigh. To test their understanding of the laws of supply and demand, I ask: “What if you are selling T-shirts to tourists for 40,000 rupiah in high season, and you suddenly have half the number of customers for a few months?” They look at me as if I am a crazy person in dire need of economic counselling. “I make the price 80,000 rupiah, of course”, they say patiently. “Then I will make the same amount of money.” Ah, yes, of course – why didn’t I think of that?
A friend recently came to me with an idea. She is intelligent, has a great work ethic and the drive of six people. But she has not the slightest idea of the technical requirements needed to make her business idea work. “I am going to start an on-line business selling things”, she said, “And I can run it from home and make a lot of money. I just need to earn enough money to get a laptop, and I can start.”
My heart sank. I knew I was going to have to rain on her parade. She had thought about this business idea for six months, and was convinced she had all the angles covered – except for having any start-up capital, of course. So I made myself hugely unpopular by mentioning the costs of an e-commerce site, the programs required, the need for a reliable, fast and expensive internet connection, appropriate bank accounts, a banking gateway and a reliable delivery system. I also mentioned that building a website doesn’t mean that people will automatically visit it, as many have discovered to their chagrin. I told her that her dream is achievable, but for a lot more than just the cost of a laptop, and not without significantly raising her technical and business skills level. She was devastated.
Somewhere in the depths of my cynicism lurks an idealist. Like many of the locals, I have a dream too. Mine is that I would love to see an informal network of people experienced in business, both locals and expats, who are willing to mentor and guide those locals with big dreams and the drive to carry them out. Sure, there are business courses available here, but I suspect that they are well out of reach of many. For those who are actually willing to learn – and I recognise that that will be only a fraction of the dreamers – access to people experienced in small business could well be a gateway to the knowledge and skills they so desperately need for success.
Culturally, this may well prove difficult. Even the Indonesian language works against it. There is a poignant irony in that untung, the Bahasa root word for ‘profit’, also means ‘luck’, which might explain some of the optimism surrounding business launches here. Would it work? I have no idea. But wouldn’t it be nice to at least try?