Sunday, August 30, 2009

How Not to Do Business

I want to equip my house in Sihanouk province with solar power, as electric power is quite expensive down there. I would at least like to get a partial solar supply since a full-blown installation for the entire house would be too expensive.

So I contacted five companies for quotes. Three of them were Cambodian, one was a multi-national, and the fifth was a small outfit run by a Dutch man. Since they naturally need to know how many kilowatts/hour you use they wanted a list of all electrical appliances and installations we would have. Since this is sort of difficult to give over the phone, they all requested me to email them this list, which I promptly did, expecting a reply within the next couple of days or so.

Well, that was in July, and I am still waiting. Only the Dutchman gave me an estimate the next day. It was somewhat on the high side but I did appreciate his prompt response and his detailed explanation.

It appears that the Cambodian companies have so much business they can afford to just forget about a home installation; never mind, that this would probably run anywhere from $15,000 to $50,000. What surprised me the most, though, was that the multi-national didn’t bother either.

We all know that companies in the West would just scramble to get your business. I mean in this case they wouldn’t even have to go out soliciting business. They got an inquiry ready-made. They just need to compete with their pricing and expertise. People lament the general lack of normal business and marketing skills. This is prime example of it, it seems. And mind you, this is the simplest form of marketing – following up on inquiries.

And here is another example. I am in the market for a small piece of land, e. g. 10 x 20 or so on the outskirts of Phnom Penh. In the course of my search, I came across an owner who had 5 lots 5 x 22 in a very good location with access to power, water, sewer, and a paved road. He was willing to sell me 2 lots at the end of his land. He wanted to keep the 3 lots facing the main road for himself, which suited me fine.

Initially, he wanted $10,000 per lot, then he lowered it to $9,500. We kept negotiating back and forth but he was adamant. The land had no hard title, although the area had been covered by LMAP already. Our arguments were that the hard title would probably run to about $2,000 and that we wanted to nail down a price per m2, as we were not sure whether the commune would declare part of his land common land for widening the road.

Well, the seller said he didn’t care, he is selling a lot, and the price is set. No amount of reasoning would sway him. We wanted to know for sure so we asked the cadastral officer in charge of the area to check out the land and let us know what the general development plan is. Well, to make a long story short, it turns out that the 6 m wide road would eventually be 11 m, and an additional 2 m were to be kept free for access to the sewer system, which would leave us with a lot 10 x 15 instead of the original 10 x 22. The hard title was no problem as the owners; either seller or buyer, just needed to apply for it and 6 months later it would be issued. Confronting the owner with these facts, we were hoping that he would at least understand the implications for himself, as he wanted to use part of the land personally. We might as well have talked to a brick wall. Of course, this late in the talks he wouldn’t budge for fear of losing face. Well, he didn’t lose face but he didn’t make a sale either.


Anonymous said...


GRID power had always been very expensive. Also, the demand is steadily increasing.

Going Solar on your house will typically runs you from $15,000 to $45,000 depending on the demand of your appliances. It is not gauranteed to run all your appliances either.

The electrical power demand will always be there. One has to realize how to capitalize on it. For example, hardnesing wind power using proven wind technology at Sihanouk province with an annual average wind speed of 5.0 m/s will generate enough power to light up the rural area for as low as one-tenth of one penny. Imagine paying 10 Cambodian Reil per kilowatt-hour. You wouldn't have to invest in buying and mantaining your own Solar power system.

Of course, this can only be realize with the aid from the World Bank and enought personal interest to make it happen.

Massive wind power generators are litering across Europe and North America landscape. All that one has to do is researching this option and form a business partener with US and European company to implement the technology.

KJE said...

Electricity in my area is 75cents/kwh.
As I mentioned in my email, wind power is only possible in SHV province since they have the necessary 5 m/s. But your land in Kandal province doesn't seem to be suitable.

Anonymous said...

Pure coincidence, an article on this subject on the PPPost today: