Business Profile: Oscar Flores

 Business name: Calzado Flores
Type of business: Shoe maker
Years in business: 14 years
Number of employees: 14 employees for making shoes, 4 salesmen
Production per month: Produces 2,000 pairs of shoes per month

How and why did the business get started: Oscar’s dad had a shoe business. Since he was about 10 years old, Oscar worked in his Dad’s shop and was taught to work and manage the shop.

Recent successes or changes: He seems to be doing very well. He currently has 4 salesmen that sell in various locations, including Managua, Tipi Tapa, Costa Rica. Sales have been very good this year despite the economy. He has changed the way he does credit sales, a suggestion which he got from the previous Wake consulting session. Currently he sells 60% of shoes by cash and 40% by credit. He now will only extend a new line of credit to repeat customers if the previous credit has been cleared. This means he is collecting all of the money from credit sales, where previously he hadn’t been. He has around 25 distributors, and he has worked with many of them for more than 10 years. He has a new supplier that he buys raw materials from in Guatemala, so he bought a lot on credit for a much lower rate.

Current challenges: He is looking to expand fairly quickly into new markets and is considering creating a line of men’s shoes. The main challenge that we worked with him on over the consulting session was the idea of purchasing a truck. Currently, he travels daily to Managua and sells 100 pairs of shoes. It is C$ 93.5 round trip to make this journey, including bus fare both ways, as well as cabs to the market and back.His wife also travels to Tipi Tapa daily, a cost of C$ 40 Cordoba round trip. With a truck, he thinks he could sell 200 more shoes total per day. If he bought a truck, he and his wife could make trips to Tipi Tapa and Managua together, and they could also travel to new markets along the way where the bus doesn’t stop. The truck would cost $4,000.

Description of most recent Wake Forest Consulting Project:

• During our consulting visit with Oscar, we focused on the truck idea to figure out if this is a good opportunity for him.

• We first talked to him about finding other venders or friends to pay them to take him to market, but he didn’t feel comfortable with that idea.

• He could begin to bring a lunch into town with him which would allow for a 50-60 Cordoba savings because he must purchase lunch currently.

• We also talked to him about the prospect of picking friends up from the bus stop and having them pay him bus fair to travel to markets with him, and he said that was a great idea.

• We introduced a break-even analysis to show him the amount of shoes he must produce to cover the costs of buying the truck.

Other Anecdotes From the Business Owner: He said he really enjoys our visits to his business and would like us to continue coming. He also thinks our advice has improved since we have been able to see his business.

-Written by Sarah Wiley, MA '10