Cake Palace supplies just a fraction of its demand. To get to this small fraction, there has been a lot of upgrade in all aspects of operation. First was acquiring a bigger space of operation, then employing more employees, and, most profoundly, increasing production machine. At this moment, when we still have a window to a big city demand, we have to further restructure our production system.
The priority field that will significantly allow us access more demand is addition of machinery. And that machinery capital comes from the year long servings. Something different from many small holder business, that has allowed us to acquire machinery is ‘Banki M’nkhonde’. Banki M’nkhonde, literary translating to Bank at the Veranda, is a temporal system where people make teams and contribute an agreed amount of money periodically. The collected money is loaned to some of the members of the team, every-after the contributions are made. The deadline of paying back the loan is created by the whole team. When the agreed period of the existence of team is over, the sum money of Banki M’nkhonde is equally distributed to every team member.
To put it into perspective, my mum is in a team of 30. They meet every month. During the monthly meetings, she and her colleagues contribute MK20, 000 ($28) each. The sum, which is MK600, 000 ($840) , is then loaned to one of the members, for example my mother. After an agreed period, for example, 3 months, she is supposed to pay back the loan with a 10 percent interest. During the upcoming meeting, the same contributions will be made, and the loan will be given to someone else. After a year, all the money (MK7,200,00 – $10, 080) is then shared equally among 30 people. Making each person get MK240, 000 plus (approximately $340).
Banki M’nkhonde is designed to be temporary, but most people maintain their groups, and practice the same thing over many years. My mother too has maintained some of her friends, and groups, for more than 5 years. In the recent 3 years, she has been simultaneously participating in 3 different Bankis a year.
Bankis have been a perfect way for my family to save Cake Palace profits. As much as rent has to be paid, school fees has to be paid, electricity bills and water bills are pilling, Banki M`nkhonde should not be missed. That way, there is a consistent irreversible way of saving profits year long. This is the money that is used to purchase machinery.
Small holder businesses, that do not see major changes over many years of operation, do not have a consistent way of saving profits. As soon as they find profits, they use it to acquire products or services that have no direct investment in business. Usually they`re restrained by many basic needs for their families. When that is the case, there is a need for a saving system that is irreversible. And for my family, that saving system has been Banki M`nkhonde.
This month, we had a loan from one of the Bankis. This loan was planned to acquire a mixer from South Africa, and my father had to go purchase it. Unfortunately, during his absence a lot of operation do not move as expected. As such, we had to purchase so many baking raw materials, so that during his absence, we could spend all our time working in the Bakery, rather than, moving around purchasing bags of flour. The to and fro journey took him 3 days. He spent 24 hours on the bus, to Johannesburg, one day to purchase the mixer, and then another 24 hours on the road to return.
Three days later, our long awaited machine arrived. The mixer is a little bigger than our previous one. Unfortunately, during operation we discovered a very big weaknesses. The machine’s maximum speed is not fast enough to prepare a dough for a majority of our products. That said, the previous machine is still being overloaded with work. So far, the only option we have is to return it (My father has to travel again).
Banki M’nkhonde is to end at the end of December, or early January, and those savings will be used to return the mixer for a better one, and add any other two machinery. We hope 2019 will be a year of increasing machinery and reducing human workload without negatively affecting our production quantity or quality.