I had written about a depth v/s scale outlook exactly a year ago. The past year, my outlook has evolved hence, making this post as an update to that thinking. Click here to read my post from a year ago.
I have seen a combination of depth and scale yield the desired results. So I have come to realise that multiple approaches are required to continue to progress towards prosperity. We certainly need a segment to continue to focus on scale while another segment focusses on depth.
But the effort for scale and depth needs to be different. Upskilling, awareness, facilitation should be scale but livelihood generation needs to be depth.
I’ll explain why livelihood and scale don’t go hand-in-hand for most rural enterprises.
If a rural enterprise is trying to generate livelihood then there’s a product or service which needs to be sold and hence, a revenue made.
Now 1 cr is a revenue milestone that an enterprise needs to cross on its path to stability. I don’t know where this number comes from but, is usually a milestone that gets referred to on the same breadth as onset to business maturity.
So if one gets to this milestone and has aspirations around #scale of impact at the same time … there’s a few things to reconsider.
Let’s take 300 lives as an example for scale. Again, a number I have come across a lot in the same breadth of scale.
Now, if the enterprise makes 1 Cr as revenue. Typically 30% of this revenue goes towards livelihood for the communities. This % could be more in some cases and less in some. I would tend to believe that latter would be the majority considering the cost of maintaining the value chain.
So 30% of 1 Cr is 30 L per annum which divided amongst 300 lives would mean 10,000 per annum. This translates to INR 833 per month.
Now, let’s take a higher %. Let’s say 80% goes towards livelihood.
So 80% of 1 Cr is 80 L per annum which divided amongst 300 lives would mean 26,667 per annum. This translates to INR 2222 per month.
Whether it is 833 per month or 2222 per month, I am not sure if the communities needed this help. This income can be derived by themselves anyway… and probably in the remotest of the rural.
Unless income generation is upwards of 10,000 per month by at least one of the earning members of the household… and this gets coupled with the interventions of scale by government and other agencies, I am not sure if there’s any dent being made.
Less than this income invites debt cycle and the household will never get to a position of prosperity.
Here’s an example of what a depth focus can do. From being an unskilled, stay-at-home mother to earning 17,000 a month, Angelin covered this journey in just 4 months.
Angelin’s contribution to her household income takes it to INR 25,000 per month. If this is consistent then it gives her household a good chance to get out of the current debt cycle and stay away from it. Further more when Angelin takes to an entrepreneurial path, this multiplies multifold and she can potentially take more women along.
This gives them a good chance at #prosperity.
PS: That’s Angelin celebrating a ritual of sorts we have at Indian Yards Foundation / The Good Gift. Women who are most happy with their income generation treat the others to some sweets and snacks.
