Business idea

Developing these skills enables BoP producers to do more
business within the formal market system in which there are fewer growth constraints
compared to the informal economy in which businesses cannot become too large in case
they attract too much attention. It would also allow producers to break away from local
middlemen and give them access to doing business with more professional organizations.
As BoP producers’ businesses grow, their economies of scale and productivity too would
benefit.

Improved living conditions
“Poor people live in discomfort, in unhygienic, dangerous, dirty, badly serviced, and often
polluted environments where they are vulnerable to many physical shocks, stresses and
afflictions” (Narayan et al., 2000b: 34). They are “often described as tired, exhausted and
worn out” (Narayan et al., 2000b: 34), which is largely due to the hard work necessary to
survive while at the same time they lack food and access to good healthcare. In fact,
“[m]ore than anything else, poor people dread serious illness within the family. Illness
removes individuals from the labor pool and can push a household into poverty”,
particularly as affordable health care is lacking (Narayan et al., 2000a: 42). Furthermore,
feelings of “powerlessness, voicelessness, dependency, shame, and humiliation” are strong
(Narayan et al., 2000a: 7). A feeling of insecurity often makes people reluctant to make
long-term investments, and economic uncertainty makes people afraid to make long-term
commitments

Figure 5.4 portrays the framework of business model qualities. We distinguish
between five dimensions, which together capture the BoP’s desire, capacity, and
possibility to do business with the firm, as well as the business model’s potential to
improve in the future and its potential size. The five dimensions are:
1. The firm’s value proposition, which captures the BoP’s desire to engage in
business with the firm.
2. Local capacity building through the firm’s business model, which captures the
BoP’s capacity to engage in business.
3. The embeddedness of the firm in local communities, which captures the extent to
which the business is an integrated part of the lives of those at the BoP and the BoP
perceives doing business with the firm to be an actual possibility for them.
4. Inclusion of learning in the business model, which captures the extent of learning
by the firm through native capability and therefore its capacity to improve over
time.
5. Scalability of the business model, which captures the potential scale and scope of
the business model.