Social Entrepreneurship In Cambodia

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160217 B2B - Article - Social Entrepreneurship in Cambodia USE

This time the B2B team has a chance to sit with Aimee Cheung , a business consultant for social businesses, start-ups and traditional for-profit companies.

As the director of Aziza’s Coffee, Cheung experience crosses over to the field of social enterprises (SEs). Aziza’s Coffee is a social business selling coffee from Cambodia’s first solar-powered tuk-tuk and employing former dumpsite workers.

B2B: What’s the most important lesson in relation to human resources that you’ve learned since working in Cambodia?

Cheung: To never underestimate people. One of my staff is over 40 years old and could not read or write when we recruited her. She lacked so much self-confidence at the beginning, and it was clearly not easy for her to make such a large and unfamiliar change in her life. Since she has started at Aziza’s Coffee, she has learned enough English to serve coffee to non-Khmer speaking customers, learned to write the Arabic numbers and as her self-confidence grew, she’s taken on more responsibility. It’s humbling to work with her and she makes me want to find more women like her, who were not given the same opportunities as many of us but relish the challenge when it comes their way.

B2B: What is the most common question or problem you are asked to help overcome by both social entrepreneurs and business owners in Cambodia?

Cheung: Funding is always a huge issue and unfortunately it hinders many potential or existing enterprises. Social entrepreneurs I work with always hit a wall when they need to pilot their business idea before going into full implementation, for example.

Secondly, finding people with the right set of skills. I have come across some people who really impress me, and in some areas I can really see a skills gap. In a lot of cases, a one day training course just isn’t the answer; it doesn’t solve the problem. I would like to see more opportunities for young Cambodians to gain hands-on training and to strengthen their CVs.

B2B: Why do you think collaboration and ideas sharing among entrepreneurs plays such an important role for those looking to start up a business or social enterprise?

Cheung: One person cannot know everything! We never stop learning so in order to develop, improve and succeed, it requires help and support from others in any shape or form. It could be getting feedback from a potential customer, asking for someone’s professional opinion or actually working together on a common goal.

B2B: Staff retention seems to be quite a common problem in Cambodia, particularly among Khmer staff. What advice can you give to new business starters to overcome this challenge?

Cheung: I think the way organisations recruit and possibly the wages they offer could be part of the issue. I would say offer a salary that is sustainable for both you as an organisation and for the employee, so it is enough for he or she to live off. If it is a full-time job, please offer a full-time salary so that your employees don’t have to find a second job and are constantly exhausted or unmotivated when they come to your workplace. If you cannot afford a full-time person in your business-as-usual state, then see if that role be made into a true part-time role or maybe your organisation’s business approach needs reviewing. If you ask staff why they are jumping from job to job, it’s mainly because they’re chasing a higher salary.

On the other hand, I have also observed that some job seekers are unrealistic in what they expect and seem to be “allergic” to hard work! This really needs to be identified in the recruitment stages as it can become expensive and exhaustive afterwards. A lot of my interview experience when I was job-seeking was scenario-based questions to test my experience, ability to use my initiative and how to manage situations, even conflicts. I find that quite effective and informative of how a person behaves and works in unfamiliar or challenging environments.

B2B: How important is understanding of culture and language between Khmer and Western speakers in terms of ensuring a successfully functioning business/Social enterprise? What tools can be implemented to achieve this?

Cheung: It’s very important, critical even. Culture is what binds everyone together. And even Khmer people will have different cultures and customs depending on which part of the country they come from or on their family’s heritage. I would say that I’ve been fairly fortunate as I have a Chinese background and it has many similarities to the Khmer culture in terms of family values, how to respect people older than you, etc. Our food and even some words are the same in Cantonese and Khmer!

This all resonates in a business context too. We have to recognise how things may be approached or perceived differently, then identify and agree the best way to go about things. This usually means compromise and change. When you’re talking about your target customers who are culturally different, a lot of extra work goes into understanding the culture and therefore what the customers want. For example, we had to train our Aziza’s Coffee staff to always ask Westerners if they want sugar in their coffee. For Khmer people, the thought of a sugarless coffee is unthinkable!

B2B: Sustainable impact is a passion of yours. How would you define this, why do you think it’s important in Cambodia (on both a social and business level), and how can it be most successfully achieved?

Cheung: For me, sustainable impact is about creating social value in the longer term; it has to last, not create dependency and the social impact or value should be the same or greater through time. This can be achieved whilst also being profitable, and this is unfortunately perceived as a negative outcome in social business which shouldn’t always be the case.

It is important in Cambodia as I see a lot of short term impact which creates dependency in the development sector, and there’s a movement and opportunity in Cambodia to do things differently now as we are learning our lessons. There is also a big challenge where on paper, Cambodia is wealthier than before. Unfortunately this doesn’t account for distribution; 40% of Cambodians still live on less than $2 a day. The nation’s wealthier ranking means that grants and donations are much harder to obtain now and so organisations are looking at creative ways to generate their own income.

There’s no simple formula for a sustainable social business, but I would suggest having a well-thought-out idea which considers all stakeholders, recognises cultural differences, simple in concept and easy to articulate to the market.

B2B: How do the challenges of starting a business compare to starting a social enterprise? What are some differences in the major considerations when starting these different types of enterprises?

Cheung: There was generally not a lot of support in Cambodia for social enterprises but this is slowly changing and I am starting see a movement of unique-thinkers and forums which are encouraging this shake-up. It’s refreshing to see social enterprises being developed which aren’t specifically targeted at tourism; it’s addressing local needs for the local community. It’s brilliant!

The cost of setting up a business is not cheap in Cambodia. You need to obtain the correct licences and registrations from the government and these costs are out of reach for most start-ups. Many SEs turn to impact investors for funding, and investors require SEs to have formal business registrations so they invest in the business entity rather than the individual. So that is a huge challenge I have come across many times.

Operational costs are generally higher for SEs. For example at Aziza’s Coffee, we use paper cups instead of plastic cups and there is a huge difference in price. But we take on this higher cost as we have a strong environmental ethos. We also allow our customers to pay using plastic bottles and aluminium soda cans as a means to generate awareness around the value of our garbage and the amount of garbage we generate. Again, this is a cost we have chosen to incur. If we were only interested in making profits, we would use cheap plastic cups, there would be no ‘recycling exchange’ concept, and we would probably pay our staff less.

The focus of a SE is very different to a profit-making business as success is measured very differently. This therefore defines your development, implementation and evaluation of your organisation in very different ways. However, what shouldn’t change is how you perceive your paying customers. Customers still want value and quality for what they pay for regardless if you’re a social enterprise or not!

B2B: What advice can you give to entrepreneurs wishing to start their own social enterprise in Cambodia?

Cheung: Prepare, plan and think it through. Be prepared for the hard work too. I have worked with many clients who need help in their business plans and financial projections. The start-up costs are vastly underestimated and projected revenues are overestimated when these need to be the complete opposite! It makes them rethink everything much more carefully as suddenly the picture is realistic rather than rosey. Also, please do your research and understand your customer. What you want and what your customer wants is not necessarily the same. Give it a shot and don’t be afraid to ask for support. What I love about Cambodia is that most people are willing to help and are genuinely interested in what you’re trying to achieve. The environment can feel like it’s working against you sometimes but be proactive: there is support available. And enjoy the ride! You’ll definitely have fun at the same time and meet some incredible people along the way.

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