Costa Rican producer of sustainable soaps digitised many of their business operations after completing digital upskilling programmes run by national and local governments. To overcome the current challenges associated with rising costs of raw materials and inflation, they intend to further digitise the firm.
Costa Rican SME underwent upskilling run by national and local governments to optimize use of digital tools
Abstract
Operating in the manufacturing and retailing sector and composed of two entrepreneurs, Anudan is a family-run business that was founded in 2018. They produce and sell plant-based and sustainable cosmetic products. The firm has a strong focus on sustainability, from the packaging to internal processes of tree-planting. They offer in person or virtual classes to show their customers how to make their skin care products from scratch.
Anudan has been confronted with multiple challenges since its creation. One of the main difficulties they were faced with was the complexity of the bureaucratic procedures to obtain the permits to start their business. On top of these time consuming and costly procedures, they struggled to obtain technical training grants.
Before the pandemic, they started sending their products to Spain and Germany, not as an export product but as personal mail or with the help of friends travelling to these countries. The bureaucratic processes to export their product were challenging for them and with the pandemic, they had to stop their shipments all together. According to OECD analysis, the wholesale and retail trade sector along with the transport manufacturing, construction, real estate, accommodation and food services, air transport, professional and other personal services were the most affected by the COVID-19 crisis. In these sectors, SMEs account for 75% of employment on average across OECD countries against 50% of employment in the business economy at large (OECD, 2020[1]).
Finally, the rise in the prices of raw materials used in the elaboration of their products – which started with the pandemic and kept escalating with international tensions – has led them to modify their production processes to cope with supply chain disruptions. For instance, they replaced doe oil from Ukraine with olive or grape oil – which can be obtained in America – as the price of the former has skyrocketed since the start of the war. Finally, their business growth is weighted down by inflation as well and high interest rates.
Anudan was established as a virtual shop, relying mainly on social media to reach its customers and answer customer service questions.
As a business, they have always relied on digital tools to promote their products and offer training. These tools have facilitated internal organisational and administrative processes. Namely, they make use of the following productivity enhancing softwares:
Online project management tools;
Graphic design software;
digital invoicing, accounting and billing software.
They also benefited from improvements made to many of these tools during the pandemic, as well as from free training offerings on private platforms.
In order to overcome these challenges Anudan has mainly relied on digital upskilling to improve productivity. The virtual trainings they completed allowed them to optimize the use of digital tools at their disposal, such as webpage functionalities that were previously unknown to them. They are in the process of upskilling in the area of data entry and big data. The firm is also developing a virtual helpdesk to improve their customer service.
Anudan has also extensively focused on developing their social media presence to increase their customer outreach. They started promoting their classes on social media and they increasingly rely on messaging software to reach their customers. This allowed them to improve their interactions with their customers, with whom they can communicate more assertively. Furthermore, it has allowed them to expand their outreach beyond their national borders.
Finally, the use of digital tools has enabled them to optimise the organisation of internal tasks and create business alliances with other entrepreneurs to better meet their challenges.
Since 2016, Anudan has taken part in multiple trainings in different areas spanning from business planning to digital upskilling. They took part in a business plan creation training by the Ministry of Science, Technology, Telecommunications (MICITT) and the Community Intelligence Centre of the Zarcero Municipality.
In addition, they participated in a support programme for women in business by CENPROMYPE (Regional MSME Centre for Central America) as well as in trainings on innovation and creativity for woman entrepreneurs by the Ministry of Culture and Youth and the Ministry of Economy, Industry and Trade (MEIC). Further, they completed a course on Product Photography and Photo Editing with mobile phones by the National Apprenticeship Institute (INA).
In order to create their website, Anudan also took part in the MYPYME Costa Rica digitalisation plan by the Ministry of Economics, Industry and Trade and the advertising services firm “Kolau”. This program allowed them to create a website at no cost and participate in virtual trainings.
Finally, they have taken part in training programs by universities such as a Technical Assistance and Business Support programme by the Colegio Universitario de Cartago (CUC) and one on Financial Intelligence by the Universtidad para la Cooperación Internacional (UCI).
OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, https://dx.doi.org/10.1787/bdb9256a-en.
OECD (2021), SME Digitalisation to Build Back Better, https://doi.org/10.1787/f493861e-en
References
[1] OECD (2020), “Coronavirus (COVID-19): SME Policy Responses”, https://www.oecd.org/coronavirus/policy-responses/coronavirus-covid-19-sme-policy-responses-04440101/#biblio-d1e9811 (accessed on 16 November 2022).
