Alyssa Baker, Amanda Newton, Alex Haralampopoulos, Megan Ryan, Sal Acevedo

Alyssa Baker, Amanda Newton, Alex Haralampopoulos, Megan Ryan, Sal Acevedo

Business in the Dominican

1/25/16

Centro Cultural BoMana

Introduction

BoMana is an after-school art and cultural education program for students from 3 to 11 years old located in La Romana. Luisa is the owner and one of the teachers at BoMana. She has one assistant named Alica, who has been an employee for about 7 years. The average age of the students is about 9 years old. She has about 40 students as of January 2016. Her facility is located in a local area near the Police station, health clinics, and court house. There is a blueprint of her facility in appendix I. There are a lot of people outside in the streets in the mornings, but not at night. Within a square mile, some local restaurant competitors include four vendor carts, Volievall Cafeteria, Cinco Gelato & Caffe, Don Ham, Paola: Mini Market Cafe, a seafood restaurant, Elvis Chorcho Lounge, and Eventos. Luisa has experience cooking in a previous family business and believes that children need a place where they are welcome to eat, so she wants to create a restaurant in BoMana. In this paper we will talk about what we learned from our research in class and while we were in the Dominican Republic, goals of BoMana and this project, reasons for adopting change to BoMana, our business canvas model, and our recommendation for revenue and funding that Luisa can utilize.

What We Learned in Class

This particular course was split into two separate parts: one half consisted of classwork and the other half consisted of hands-on experience by traveling to the Dominican Republic.

Of course, before traveling, information was gathered for the project by doing extensive research on the internet and teleconferencing with Louisa. Our particular group was focused on the city of La Romana and the BoMana Cultural Center located in such city. It was important that our findings were grouped in these two sections because it would help with organization. First, we focused on the BoMana Cultural Center (Centro Cultural Bomana). It was understood that this cultural center offered a variety of classes to the youth in the city and surrounding areas; not much more was known other than that. So, as a collective group we proceeded to center our thoughts on the cultural center. At this particular time, Facebook was the most important tool to help us learn more about the center for it gave us a visual understanding as to what we would be working with. Centro Cultural BoMana’s Facebook page offered a short description of the center, when it was founded, and an array of pictures that featured the classes offered, students, etc. It was also equally important to look at the competition that was around the area of La Romana. A basic google search of restaurants in La Romana gave us a concise list of certain establishments such as: Ristorante La Casita, Shish Kabab, and Trigo de Oro to name a few. Since we were solely focused on adding the restaurant business, we only looked at her gastronomical competition. Finally, for our research on BoMana, we researched the different funding options that could be available for this venture. We geared our attention to the Millikin Microfinance Fund at this time.

As stated, we also conducted research on the city of La Romana. All of us being foreign to the land, we felt that it would be most appropriate to get a clear understanding on the essentials such as: demographics, economic development, and culture. Examples of things researched included: population of the city, age group differentiation, current economic state of the country, inflation rate, conversion rate, cultural undertones of the country, social norms, and more. We knew, of course, that while doing all of this research, it would only feel most applicable when we went on on the actual trip. Lastly, one of the main concepts that we learned from class was the process and how difficult or easy it was to speak to an international client. We held weekly meetings (usually on Monday evenings) and tried teleconferencing calls with Luisa. Most of the time these calls would yield results and would be clear in terms of gathering information and certain times the calls would deem more confusion than answers. Regardless of the results, it would still be a crucial component to the class experience and would still lead us one step closer to achieving our goal, which was to help our client maximize the enrollment of her cultural center.

What We Learned in the Dominican Republic

Our group learned quite a bit while researching La Romana and Centro Cultural BoMana on the internet, but we learned the most when actually getting to La Romana and visiting Centro Cultural BoMana in person. As soon as we landed, we got on a bus and drove to Santo Domingo making a bathroom stop in La Romana which gave us the chance to see the La Romana area and see just how low income it was. Driving through La Romana you will see run down housing, stray dogs, many family run businesses, etc. La Romana looks very poor and we learned the inflation is very high. However, people are very friendly there and happy to see tourists visiting their city. They know that tourists are going to spend money so they are happy to see us there in their shops and restaurants.

The next day, the BoMana group toured the area around Centro Cultural BoMana which included the surrounding six blocks. We discovered that the mornings are very busy and people are walking up and down the streets constantly. We looked at the local competition and the prices they were selling their food. The reason we did this is because we want Luisa to have competitive prices just like her competitors around the area. Some of her local competitors are four vendor carts, Volievall Cafeteria, Cinco Gelato & Caffe, Don Ham, Paola: Mini Market Cafe, a seafood restaurant, Elvis Chorcho Lounge, and Eventos. While walking around, we had the opportunity to speak with the owner of Don Ham, Carlos. Carlos talked to our group about the struggle of owning a business in the Dominican Republic, specifically in La Romana. He said it is very hard to train employees as they don’t have the education background like we get in the United States. Also, the employees don’t want to stay in one place at a time. I believe he gets a lot of turnover. However, Luisa commented that tourism and education are valued most in the Dominican Republic.

Tourism and education get the most money from the government. 40 percent goes to education, according to Luisa. Tourism accounts for more than $1 billion in annual earnings for the Dominican Republic country. The government has invested a lot of money in tourist development creating airports and resort areas. This area is perfect for investors. We stayed at Altos de Chavon, a school of design for working artists in Casa de Campo. It’s also a cultural center for residents and tourists. Cruise ships will bring mini boats to Casa de Campo so tourists can walk the grounds, shop, and eat. A lot of Altos de Chavon revenue is from these tourists.

Goals

Unless goals are written down, planners, owners, managers, and employees do not have a unified direction for any particular venture. There must be a clear understanding of the mission, which is best expressed through a mission statement.

Next, the project has to be clarified to understand the direction needed to pursue the goal. The idea is where you begin, the rest are the details needed to implement a mission and specific project.

The mission statement for Centro Cultural BoMana is: “BoMana offers art education and a select variety of other artistic and cultural pursuits to the children of La Romana with personal attention at an affordable price.”This enterprise is directed to the children of the La Romana community. It explains they are to receive an art education with personal attention, unlike anything offered at other secondary education programs in the area at an affordable price. In order for this facility to continue operating now and in the future, a project has to be established to increase the revenue stream.

Reasons for Adopting Change (Alyssa)

After we talked with Lusia about the goals for bettering BoMana, our group set down to talk about the reasons to make changes to BoMana. One of the reasons is to create a revenue stream because, as of right now, BoMana’s profits are reinvested back into the business. The second reason is a potential for future loss of customers due to the chance that school districts will adopt arts and music problems that will be free to students and compete with BoMana. Another reason is that Luisa would like to leave behind the legacy of BoMana to her son when she is gone. The last reason is to maximize the capacity of BoMana because the backyard and some of the classrooms are not being used to their fullest potential to maximize profits. After defining the reasons for creating change in BoMana, we developed a business canvas model.

Business Canvas Model

We began our project with a business model canvas, which is a strategic management tool used for developing or existing businesses. This entrepreneurial tool is a visual chart with various categories, such as, key partners, key activities, value propositions, competition, customer segments, key resources, channels, cost structure, and revenue streams. Included is what we know about the existing business and suggestions to improve the business after analyzing its many components. Not to reiterate everything presented in our business model canvas, which is accessible in appendix II, the areas we addressed in particular involve key partners, key activities, key resources, and revenue streams. One significant key partner presented was the use of Decatur schools. A key activity was Luisa and some students traveling to Decatur to visit grades schools and Millikin University. A key resource was the Millikin Microfinance Fund, which may be a financial resource. Through our efforts and suggestions, the main objective was to increase BoMana’s revenue stream.

In order for our client, Luisa, to visualize a different teaching environment, we have recommended she travel to Decatur, Illinois. The objective of her trip would be visiting Decatur grade schools. By visiting, she is hoping to acquire unused materials from the middle schools through donations. This experience would expose new teaching techniques to benefit her and her students. Additionally, there is a possibility of her traveling with some of her students. This would be a unique cultural experience for both her students and Decatur students. By observing how iPads are integrated into the teaching curriculum in Decatur middle schools, she could understand how technology could benefit the students of BoMana. This visit could help her overcome her skepticism towards technology, hopefully demonstrating how technology can be a great educational tool at a relatively low price. Another part of this trip would consist of a music exchange program with Millikin University, which would give both communities an appreciation of Dominican music and jazz.

Appendix II Canvas Model

1st Revenue Recommendation

After meeting with Luisa, it became clear that there were many ideas to increase revenue for La BoMana. One of the improvements Luisa wanted was a renovation for the backyard. This renovation would have two separate stages. One of the stages would be movable and would consist of 6 separate pieces that would allow it to be transferred easily from the backyard to the front parking lot for special events. The other stage would be a more permanent piece of furniture in the backyard for dancing. Along with the stages, lighting would be added outside. This will help increase the amount of time the outdoor space can be utilized. Outdoor seating will be added to better use the space. The seating will provide more place for patrons of the restaurant or for people enjoying a performance outside. A garden will be planted in the backyard for plantains, tomatoes, and other fruits and vegetables to be used in the restaurant. Murals will be painted on the walls to bring a fun look outside as opposed to the white walls that are already there. A rough blueprint of the outdoor remodel can be found in appendix III. The cost to completely renovate the back yard and purchase karaoke equipment and a projector for the backyard comes to roughly DOP $133,590. This estimation is based off of prices acquired from research done in La Romana on prices of materials and installation. A table of this cost broken down can be found in appendix IV. If no outside funding is received, La BoMana will need to maintain an additional 9 students a month for 2 years assuming they pay the standard rate of DOP $1200. This is found by taking DOP $600 from each additional student’s tuition and putting it towards the backyard renovations. If just the essentials are done, which would be tree removal, outdoor lighting, stages, and karaoke equipment, the approximate cost would be DOP $38,590. Using the same assumptions as the total renovation, La BoMana would be able to achieve this with 5 additional students each month for 1 year.

Steps to Create Backyard

The backyard area of the BoMana cultural center was one of our focal points in the trip. As stated prior, the backyard idea could increase enrolment for it would offer more options for the kids to do during their stay. There are five steps to achieving this and they proceed as follows. The first step is to get funding. Funding will be provided by the various options given such as Gofundme.com and the Millikin Microfinance Fund. The next step would be to clear the unnecessary trees so that there could be more room to set up what is needed. This process is low-cost and can be done with the help of friends and family or can be done by a professional. Step three would be to build the stage. This stage can be constructed by a local carpenter (of whom, she stated she knew a person who could do that.) After constructing the stage the next process would be to install the lights, most likely by the same contractor and lastly, once all of that has been installed, the last thing would be to purchase a karaoke machine.

2nd Revenue Recommendation

Luisa originally opened the idea of wanting a restaurant for kids in Centro Cultural BoMana. While visiting the Dominican Republic we noticed a lot of restaurants did not appreciate kids there, as they are too noisy or cause to many distractions to other customers. Luisa wants to create a restaurant for kids and we suggest to her to have an appetizer such as popcorn or bread to occupy the kids when they sit down. It is also cheap to do. If they are not occupied, they will be loud and distracting to other guests. A second way to occupy the children while their food is being made is to have activity sheets as placemats, similar to what restaurants in the United States do for their kid menus. Activity sheets could include coloring sheets, crossword puzzles, or drawing activities.

Our group also presented the idea to downsize the original menu she sent to us and add a couple traditional Dominican dishes. The original menu had so many options on it and with the kitchen being very small, it would be hard to make all different kinds of dishes. With limiting the menu, this allows Luisa to specialize in a couple of dishes and won’t require a lot of inventory as Centro Cultural BoMana does not have the space to keep a lot of inventory.

The last question our group poses to Luisa is if she realizes the amount of time commitment a restaurant has. The hours of the restaurant will make for longer days at BoMana and more time making the dishes and cleaning up. However, the niche of BoMana would remain as it is the only place kids can go that would now include a restaurant for the kids. It also creates a success plan for the future. This restaurant allows Luisa’s son to know that BoMana has a successful future. However, the restaurant could lose money, especially in the first couple of years as it takes awhile to get your name out there and to market your business. Luisa also has a small customer potential as she is just limiting herself to kids but also because downtown La Romana is very dead at night, which is when her restaurant would be open.

In order to start the restaurant, one time purchases need to be made, such as tables, blenders, and other appliances. These one time purchases came to total DOP $210,200. With no outside funding, La BoMana would need to gain an additional 15 students a month for two years, or 10 students a month for three years using the same assumptions and calculations as the backyard renovations. After the one time purchases are made, La BoMana can start the restaurant. The menu prices found in appendix V are a rough estimate based on other eating establishments in the surrounding area. A few items do not have prices, and for these it is advised to be removed from the menu in order to make a more realistic goal. The items removed would take too much time or materials to make and would be more cost effective to not offer them. From these menu prices, the average meal price was found to be DOP $470. This price was found by taking the average price of all categories and adding them together. The categories are entrees, appetizer, drink, and dessert. Using the average price per meal, the break even point for La BoMana would be 2.5 orders an hour, 5 hours a day, 20 days a month. This break even point covers expenses such as rent, wages, and food. After making more than 2.5 orders an hour, profit will greatly increase. At 3 orders an hour, La BoMana would make an approximate profit of DOP $29,165.