Why a small business that started so well, ended so quickly

by Anthony, Returned Peace Corps Volunteer, United States Peace Corps

  • Project: Women's Bread Making Cooperative
  • Location: Camate-Tchakaloke, Benin
  • Sector: Business Development
  • Professional Designation: Government



Being a Peace Corps Volunteer is a unique opportunity as we are in the rural villages that most NGOs, Government agencies, etc visit for a project and then leave. My favorite story is when some org built a water purification system on sacred ground. They would only talk to the ‘power players’ in the village who said just about anything to benefit from the ‘preferred status’ bestowed upon them by the organization. No one ever used it.

My personal story begins with a group of 4 women. They knew that I was there to realize projects so we would often talk about things we could accomplish together. As a PCV, I was very wary of anyone who wanted to work with me because they were often just looking for handouts and freebies. Then one day the women and I had a conversation about making bread. The only bread available in my village was brought in on a motocycle from a bigger city about 25k away. The bread was terrible and it tasted like gasoline fumes yet people always bought it because it was the only bread they could find. The women said, we know how to make bread. We could do it and sell it in our village.

I thought it was a genius idea with huge market potential. To gauge their desire and because I had little access to funding, I asked the women to raise their own money at a weekly mandatory meeting at my house. They agreed. At this same time I asked them to do some market research. I did the same and we all discovered that people really wanted bread, specifically a sweet bread over a salty one and they wanted the smallest size because it would be the cheapest.

After the market research, myself with two other PCVs taught them a system of accounting for illiterates. We wrote bylaws, established reporting practices, and even made a work schedule. These things we always decided upon by the women. I only posed questions such as, “I think (A) might be a good idea because __________. What do you think?” Once this was decided upon, we set about building the clay oven and covering. I was able to find about $100 from a fund open to PCVs in Benin and the women raised about $20. This was enough to get the basic stuff done but they depended upon and agreed to reinvest all profits for a period of time to buy more supplies.

We built the clay oven and started baking bread. I had been controlling the money box this whole time because I was asked to do so by the women. I kept a strict record that was always copied in another notebook held by the women. We also instituted rules ensuring that money was always counted publicly and two separate records were kept. The bread was a massive success! They started making money hand over fist (for a rural village) and everything was going great. Little by little, I ceded responsibilities to women in the group. I thought they were prepared to take on the lockbox of cash so I turned it over to them to oversee. A few weeks went by. I would help make sure the reporting was still being done and they would continue to meet at my house.

Then one day they didn’t make bread on the agreed upon schedule. I inquired and discovered that the night before the women got together and liquidated all of the cash and split it evenly among them. Now they were dead in the water with no money to buy the next round of supplies. The project was over; it had failed.


The biggest reason that this failed might shock some of you: I didn’t make them raise enough of the own capital. The second problem is that we didn’t have enough money to begin with.

Many people believe that because these people are so poor (less than $2/day if they were the rich ones in my village) that they could never contribute but there is truth in that old adage of ‘if there is a will, there is a way’. I should have been more patient and made the women raise upwards of 75% of the project’s costs and we should have raised at least $300 as opposed to $120. They could have, over time, kept saving and saving.

I didn’t understand my purpose until afterward. I was essentially their bank or their savings account in a culture where saving money is not done, let alone a priority. Yes, I could help with the planning and ideas but they had no where to safely store their money where their husbands and kids couldn’t ask for it. If we would have saved enough and purchased everything we needed, the majority of the businesses capital would be in non-liquid assets such as the bread pans, the flour, other tools, etc. This would have given them a greater sense of ownership and pride since they would have raised the majority of money leading to greater protection. More importantly, they would have purchased all necessary supplies so they could have started paying each other immediately, instead of seeing the money pile up for the purchase of supplies.

Thankfully, I learned this in my first 6-months of service and applied some of these lessons to the rest of my service.

I do have one piece of advice for International Aid workers: use Peace Corps Volunteers if you can for advice or projects. PCVs will generally know who are the best people to talk to or work with and they can provide you with a clear situation assessment from the ground. If you are deciding upon a project site, look to coordinate work with PCVs. Or just simply support their projects on the peacecorps.gov website. We often see what happens to your project after you leave and we could have given you good advice from the beginning.


Select three phrases that describe this failure.

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Got something to say? Feel free, I want to hear from you! Leave a Comment

  1. Jessie says:

    I found this article really interesting, and very helpful. Thank you for posting.

  2. Crow says:

    Anthony, thanks for sharing.

  3. Kaitlin says:

    At first I thought it was a fullproof plan… Its a great idea. However, your failure brought up some points I would have never thought of in relation to money, how to manage it, where to keep it, etc. It seems so common sense to me that I’d never see a failure coming. But this brought up an extremely good point on how it is important to educate and asses even the most obvious things. Thanks :)

  4. Margaret says:

    Thank you for posting this example of failure. As an African woman PSD practitioner I have seen too many of these types of examples. At least in your case you were able to witness the failure. More often than not, there is several hundred USD spent at the village level, a lot of excitement plus real regular earnings amongst community members, but you go back three years after the end of an income generating project and there is no evidence that anything ever happened. No footprint, nothing except a few memories that you may have to work like a good detective in order to get the community members to remember.

    In the analysis on why there was failure in this case and the consequent learning, I seem to have missed a learning point related to supporting a business to run based on current entrepreneurial practices,norms and culture amongst the community so that you do not introduce too many changes and demotivate them to loose their entrepreneurial spirit.

  5. Pete says:

    A bit of a sad story, but I’m sure this sort of thing happens a lot. People don’t value what they don’t earn, and the example shows why African people have a long way to go to drag themselves out, what is often, self-inflicted misery.

    • andy says:

      I am surprised this comment has not been flagged. I have just watched this: http://www.fastcoexist.com/1679092/the-rise-and-fall-of-poverty-porn

      • Tony says:

        While it is a simplistic comment, I don’t think it is without merit to bring into a conversation. You only need to look toward economists William Easterly and Dambisa Moyo for similar points of view but they say instead that aid has retarded potential growth not that it is “self-inflicted”.

        Programs, interventions and aid in general needs to be tailored to take advantage of the latent creativity of individuals and private markets in developing countries.

  6. Rob says:

    Hi Anthony
    I am sorry but i dont get it. The money raised between the ladies and yourself allowed them to get the bread baking business going. Ok they were functioning making bread and making money from it.

    They did it long enough under you guidance to get to the point where they saw it repeat itself and saw the success. Then when handed over to them they decided to fold it because they liquidated it as you say.

    The question in my mind here is not one of learning that they never had enough cash to start with I dont see how that plays a role. They had enough to get it off the ground and make bread and repeat the process.

    So the questions i have that need to be asked here are

    1) What sort of residual income was there after the supplies required to make the bread were made.

    In other words without any contribution to labor costs were they making anything surplus to the amount needed to simply spin their wheels and buy more supplies.

    Something does not add up here. If there was contribution over and above pure replacement cost of supplies then there was the potential to make a income for the labor part of the venture.

    If not the business idea or rather concept was flawed regardless of how much start up capital was put into or regardless of who put that capital in.

    They must have concluded that the labor effort to make the bread was not producing anything worth making it continue. If it was ie they were making enough to at least pay each other something then they would have continued.

    To learn from these failures one has to produce some visibility to the costs and income generated.

    How much was supplies costing
    How much bread did they get to make with said supplies
    What was the bread they baked sold at and what quantity was sold
    How much was wasted ie not sold and went stale
    What was the daily shortfall in demand. ie if working capital was an issue, it implies that they never had sufficient funds to buy sufficient raw materials to produce enough bread to meet total demand.
    How did the bread compare to the “brought in bread” in terms of quality and consumer feedback.
    What level of subversive element was involved in killing off the business idea. ie did the existing supplier speak to the chief and extort some leverage to shut down the local bread making operation.
    Would seem counter logic that the village if sufficient research was done before hand and village agreed to support the venture that the venture would not have been a huge success.
    You do not mention what level of support the village gave to the venture, there appeared to be very justifieable justification for the business in the first place.
    Given in the environment we have here woman play a significant role in doing all the work in the home and taking care of kids i dont see mention of the social pressure that must have existed when the woman devoted a significant portion of their daily time to making and preparing bread yet neglecting their own family duties. Not to say its correct just that i can easily see male spouse applying pressure to quit making bread for little gain except to the whole community while the beer aint being made or the crops are not being planted etc.

    Until the info i mention in my questions is put forward i see no lessons actually learned here that i could agree with. Its all too vague. If there is to be learning there needs to be way more transparency in what the details were so there can be insight offered as to the source of the problem.

    Until in my view the social climate changes and there is contribution in these villages from both partners in the family i dont see how one person can do it all.
    My bet is the actual failure came about because the woman were overloaded relative to expectations versus returns.

    • Tony Uhl says:

      Hi Rob,

      You ask a lot of good questions that I have written down in a notebook somewhere but the size limit for this website didn’t allow me to expound beyond what I did. To answer your questions quickly, the women were making money, not a lot, but after supplies were purchased money was accruing. They agreed to pay themselves a small amount after a couple of months but communicated that they wanted the rest saved for reinvestment.

      You bring up a lot of assumptions that I also had, which is why I thought this business was fool-proof but a lot of those assumptions did not hold true in my community. They were making money but pressures from their families were too strong and the group too small to provide a significant counter-pressure. It is not just that they didn’t see enough value in the business, they did, it is just that other pressures were more powerful.

  7. Lukas Zorad says:

    I didn´t entirely understand how did you solve the problem in community, where “they had no where to safely store their money where their husbands and kids couldn’t ask for it.”

    You have mentioned it in the following sentences, but what exactly was missing and what exactly did they/you invest in to after you learned this lesson?

    • Tony Uhl says:

      I was storing the money at my house where their husbands and kids could not ask for it because they knew what my answer would be. I held on to it and we would only count, deposit, or withdraw money together after the women had discussed what was needed to be done. From my two-years in Benin, it seems fairly common that if someone is known to have money, it is uncouth for the person with it to deny a requester for some money.

      This was the problem. I gave them control of the funds too quickly as opposed to acting like a bank. I should have only given it to them after a much longer time period beyond a point of no return so to speak or used it to start an account at an MFI.

  8. Anne says:

    I think the point is very well taken. Many places – and Benin is certainly such a place – saving is almost impossible. This is not only because husbands steal – which they do, even from their own children’s bitterly earned child labor earnings. Even worse is the constant pressure put on familes to pay the medical bills of extended family members, or to conribute to en endless number of traditional ceremonies (funerals, weddings, conmemorations, religious ceremonies – you name it). Keepin cash is nearly an impossibility. This is why beter organized micro-finance scemes oblige women to save a certain amount each week or month, that they leave with an “office”, and have no rignt to touch for a certain number of months – or before they can show a promising plan for a small business. That way it stays protected also from relatives and social pressures.

    • Tony says:

      Hi Anne,

      I very much agree with you. I don’t suppose to understand the pressures and I don’t believe that their husbands were stealing. I think it is more to do with the many other constant pressures they have to spend money from school fees to a soda/beer. Sometimes a cold soda is wonderful especially when you have several kids who rarely get a positive surprise.

      I wanted to set them up at an MFI but there were none in the area that were close enough and we really had not yet gotten to the point where we could have opened an account; not enough saved at that point.

  9. Sarah says:

    Thanks for the story, Anthony. I am also a fairly recently returned PCV from West Africa and your picture of the women in your village and the description of the situation brought back a lot of memories – great memories but also memories of frustration. I actually think failure is a topic PCVs are pretty comfortable talking about. You’re almost always around long enough to see your projects fail before your eyes or have friends report the failure to you after you leave. I’ve certainly had my fair share of failed projects.

    I can easily picture the events you described even if I cannot easily explain why the women bailed on the bread project. Two years living with a Gambian family and in a Gambian village only provided me with enough experience to be able to predict the behavior of my friends and host family. It was not enough time for me to really understand the “why” behind all of their actions. I’m also certain that is how they felt about me. They eventually knew how I would act, but they didn’t really understand why I did things.

    The women were probably really excited about doing something together, having tasty bread, making money and having a little prestige and good gossip around the village for this project. They also probably got tons of pressure from their families to “cash in” on the little project for the money. Maybe they just wanted some money for themselves – an opportunity rural West African women rarely offered. I dunno. But I do know that attempting to retrofit one’s own cultural ideas of families, gender roles, financial management or whatever to another culture is a great way to doom a shared project. It’s natural to expect others to feel the way you do: Money should obviously be invested back into a new, successful project. But that idea is just a value; an opinion. And I don’t think it’s idea these women valued. To me, it’s this attempt at a shared project among people with very different – and often unknown – values that is the crux of what makes cross-cultural work equal parts amazing and tear-out-your-hair frustrating.

    Teach a (wo)man to fish? That’s easy, and also the last step. First, figure out if s/he even wants fish. Then ask how they feel about the fish and the water you’re pulling it from. What will they do with the fish? How will the new fishing skill affect their family, their reputation, the community? Does their culture foster sharing – so they’ll also teach other people – or have you just created a monopoly in the fishing industry? If these questions sound ridiculous then you haven’t had a cross-cultural project fail . . .

  10. andy says:

    hmmm…. this is not an “African problem” …. This is why there is a need for compulsory retirement savings in many “developed” countries, as well as compulsory health insurance etc. People, women, men, husbands, wives, community’s, governments have a hard time investing in the future, even if the rewards are evident.

    Maybe it really comes back to cookies. not bread. see: http://www.livescience.com/15821-cookie-test-control.html

  11. Meri says:

    I appreciate all the comments on this story, especially Sarah’s, because I don’t the problem was really “raising enough capital” or “who raised and therefore has ownership of the initial capital.” As others have aptly pointed out, I think it comes down to cultural difference regarding earning money and who has control of the money and what can be done with it. If money is seen as a communal resource that anyone can tap, it is too difficult to maintain necessary business cash flow. Even if the women had figured the need for financing supplies, their families and communities were not willing to look at that long term investment.

    • Tony says:


      I have to disagree with you and I think the rate of payback seen in Micro-Finance Institutions sides with me. They are getting upwards of 95% payback on loans (most often made to women) made to those from the cultures you refer to. The unbankable are bankable with appropriate programs and interventions, which I didn’t learn until after the fact.

  12. Anne says:

    Thanks for sharing, I think this is a great example of how external factors interfere with the best plans. You mentioned that just having the money around made it easier for husbands and children to ask for it, and I wonder if you could talk a little bit more about that. What does that mean for the future of other small businesses in similar contexts?

  13. Jessica says:

    The graphics on these pages make the text move while one is trying to read. Please change this so we don’t have to stop reading to avoid motion sickness.

  14. Maya says:

    This was helpful and insightful.
    While i am not in the P.C. i am a pastry major hoping to open my own shop one day so this was helpful in realizing a problem or two that may arise.

  15. Katie says:

    Thanks for sharing Anthony!

  16. Nica says:

    The Bovine Mystique chapter in Anti-Politics machine from 1994 talks about the problem of cash disappearing into household needs. (Men prefer to secure their wealth in cattle rather than cash) Shame people seem to have missed it! :)

  17. Thank you for sharing this article with us. I have learnt a lot from this. However, I would like to ask you to share with me some other information about this NGO. I would like to see your business business plan etc. The information you will give is just for learning purpose. If possible, we can chat via my email because I want to learn a lot from you.

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