Nazareth Water is a water purification and bottling operation located in the Olancho region of Honduras. The enterprise began two years ago as part of the Olancho Aid Foundation’s community outreach initiative, but has since transitioned into a microbusiness geared towards self-sustainment and vocational training. The project has grown to its current size through grants, donations, and initial sales.
After visiting the field site, our initial impressions were mostly positive. The operation was small, but well organized and managed to generate sales within the local community. The technical expertise of Pablo and his workers was also well evident. However, we found some areas where Nazareth had opportunities to improve. There were obvious resource, facility, and distribution limitations that impeded growth. Additionally, an incomplete financial model and poor sales coordination limited the enterprise’s overall profitability.
To help solve Nazareth’s profitability issue, we analyzed its current state financials and determined the volume of sales required to break even. We then compared that projection with the operation’s production capacity and determined that breaking even was not hindered by production volume, but by sales volume. Thus, our team decided on three recommendations to help boost sales and ultimately create a profitable business.
Our first recommendation is to focus on larger clients. Larger clients will buy more water, more frequently and help Nazareth reach its breakeven sales volume more efficiently. Our second recommendation is to develop a more organized sales structure. Appointing a dedicated salesperson incentivized with a rewarding structure and armed with essential tools and resources will allow Nazareth to acquire the customers necessary for growth. Our third, and final, recommendation is for Nazareth to continue developing its financial and operation approach to its business. The enterprise needs a strong model in order to properly guide the strategic decision-making efforts of its leadership.