Editor’s Note: This speech was presented at Guampedia’s Chamorro Heritage Series, 27 November 2012, Latte of Freedon Hall of Governors, Ricardo J. Bordallo Governor’s Complex, Adelup.

According to the State of Women-Owned Business Report, in 2012 there was an estimated over 8.3 million women-owned businesses in the United States who generated approximately $1.3 trillion in revenue, and employed approximately 7.7 million people (second annual State of Women-Owned Businesses Report, commissioned by American Express OPEN). The United States saw a growth in the number (up 54 %), employment (up 9 %), revenues (up 58%) of women-owned firms over the past 15 years.

The Bank of Guam Women in Business Center/Guam SBDC Pacific Islands SBDC Network at the University of Guam School of Business and Public Administration has provided free small business development counseling on Guam and in the surrounding region for over 15 years to aspiring and existing small business clients. On Guam, they have counseled about 583 women, 354 women with male partners, and trained 4,510 women in small business or entrepreneurial development.

Recognition of Women in Business on Guam has evolved slowly.  As a matrilineal society, Guam has exhibited strength of women in preserving cultural practices and maintaining the home. In some cases, women who partnered with their husbands in operating businesses revealed the resilience and talent of these women through formal recognition ceremonies. The Guam Chamber of Commerce – Guam Business Hall of Fame has recognized approximately 30 Individual Laureates/Business Laureates , of which four women were recognized, only as part of a husband-wife team. The Guam Business Magazine has recognized the “Executive of the Year.” In this case, of the approximately 30 Executives honored, only five were women. The First Hawaiian Bank and Guam Business Magazine have recognized women in business with its “Businesswoman of the Year Maga’haga Award” over the past seven years.

Only recently have stories of women-owned small businesses on Guam have been published. This particular story, “Risk Taking Against the Odds: The Case of Lee’s Retail Store” (International Journal of Entrepreneurship, Vol. 14, Special Issue, 2010) is the story of my mother.

Librada “Lee” Angoco Sablan Borja had survived the odds. Born in 1925, she was only sixteen years old when her island home came under captivity by the enemy– from late 1941 to 1944, approximately 31 months–resulting in a loss of Lee’s late teenage years. During that period, Chamorros were subjected to intolerable hardships administered by the Japanese military. Because rapes were common, Lee’s mother would periodically smear Lee’s face and clothing with mud and chicken manure to shield her from being a victim of rape. Atrocities and grenade slaughters were also threats that Lee and her family had to avoid.

Another life-changing event hit Lee at the age of 31. Pregnant at eight months, and with her three year old daughter Rose, she lost her first husband due to an unexpected illness as he slept in bed by her side. Lee’s drive and determination, however, allowed her to forge ahead as a single mother.  The death benefits of her deceased husband kept her and her young daughters afloat financially.

Almost several years later, Lee met her second husband and reared five additional children. An enlisted member of the United States Navy, Lee’s husband spent most of his required military service tour at sea, leaving her to raise seven children alone. His earnings at the “enlisted” rank were barely enough to sustain a full household of eight dependents. Having experienced the hardship of the loss of her first husband, the need to survive and improve upon her livelihood must have been what prompted Lee’s extra drive to pursue a path of the unknown … entering the world of business as a sole proprietor.

The motivation behind Lee’s Retail Store

Lee’s motivation to establish her small retail store was primarily based on financial need. She wanted to augment her earnings, particularly since she was unemployed at the time. She decided to establish her own retail store. What Lee lacked in retail experience, she apparently made up for through sheer determination. According to Lee’s eldest daughter, she didn’t have any experience in running a store. She recalled her mother exclaiming, “Even if I don’t really know how to do this, I want to give it a try” (Leon Guerrero, 2009). Lee’s sister characterized Lee as a hard-working woman who “tried her best” to make her store work. This is indicative of the type of inner strength of a woman who has survived the odds, a risk-taker who was delving into the unknown.

Lee’s Retail Store was situated in a prime location. It was located in the lower level of Lee’s two-story home, which sat on a corner lot in the central part of Guam’s southern village of Agat. The space had to be renovated to accommodate the required shelving and floor space needed to operate her business. To avoid high construction costs, Lee utilized the services of her sister-in-law’s father who was a carpenter by trade, and the labor of her younger brother to renovate the first floor of her two-level home into a retail store space. According to her brother Ben, he used up his entire personal leave time while visiting Guam to help Lee complete the renovation of the retail space.

Initial challenges

Several challenges faced Lee in her pursuit of entrepreneurship. First, she had no prior business experience or training required to successfully manage and operate a retail store or any other business.  Second, a more established retail establishment was located directly across the narrow two-lane street from her store, approximately 20 feet apart, and had the same corner lot advantage.  A second competitor was situated a block and a half away, but was not as accessible to the majority of the village population situated centrally, where both stores existed. Finally, Lee had little start-up capital that was sufficient to acquire basic merchandise mix of canned food, snacks, and drinks to support a small “Mom and Pop” convenience store operation.

Despite these challenges, Lee’s Retail Store had the advantage of being located in the heart of the village, with ease of access and high visibility, as well as being surrounded at all sides with residents who lived nearby within walking distance. It also had the advantage of having the appropriate mix of attractions for the youth market that lived nearby and frequented the store daily. Because she was not employed, Lee also had the time to devote to her new retail venture. She was also able to tap into the services of one of her younger adult sisters and her two eldest teenage daughters.

The store operated from 8:00 in the morning and closed at 10:00 p.m. daily, except for Sundays, when it opened at a later time. The day-to-day operations were handled primarily by Lee and one of her adult younger sisters. Although her daughters were able to assist, they could not handle the sale of alcoholic beverages. Lee managed the store from the late afternoon and into the evening until closing. She dealt with local wholesalers who supplied her merchandise. She also managed the inventory, bookkeeping tasks, and daily cash transactions in her own way.

The assortments of product inventory for Lee’s Retail Store were provided by several wholesalers.  A local bakery delivered bread and high-demand apple turnovers.  A liquor supplier provided assortments of beer.  A third supplier provided soda pops, potato chips, milk, ice cream, and some canned goods. Lee augmented the junk food with her signature pickled papaya and radish (daigo, or Japanese daikon) that she made.

One would assume with the attractive convenience goods sold by Lee’s Retail Store, that she would have a steady stream of revenue. However, cash sales were modest at best. According to Lee’s second daughter, most of the cash flow stemmed from the one jukebox and three pinball machines located in the store. These machines provided the most lucrative cash revenue stream, based on repeat customers who consisted of teenagers who frequented the store. Lee received a percentage of the cash proceeds deposited into the machines each day. In effect, because of these popular recreational machines and junk food merchandise, Lee’s Retail Store became the hot spot for teenagers.

Despite its loyal customer base, Lee’s Retail Store lasted approximately three years. The demise of the small store was attributed to several factors. Inventory control was mired by small children who would steal edible merchandise, such as candy bars and other junk food, almost on a daily basis. The lack of inventory control, coupled with the extension of store credit to local customers who couldn’t pay their small debt to the store, contributed to cash flow problems. Without any formal entrepreneurial training, these unavoidable factors, if prevented, could have enabled Lee to survive beyond 1971, when Lee’s Retail Store was finally shut down.

Lessons learned

There were noteworthy business decisions that Lee adopted along the way. Although she had no concept of what a target market segment was, she indeed had one. This segment consisted of the repeat youth customers who were attracted to the junk food and recreational machines. The popular junk food items included ice cream, candy, Lee’s pickled papaya and daigo, and sodas.

Another noteworthy strategy was Lee’s approach to reducing shrinkage of candy bars. Earlier incidents of candy theft prompted Lee to have the candy bars displayed in jars with screw-on lids. This was a form of retail inventory control and theft prevention. Prior to employing this approach, candy bars used to disappear from originally-displayed boxes on shelves. Unfortunately, not all merchandise which were stocked on the wooden shelves could be protected in jars with lids from the hands of young thieves who could not be seen from the cash register counter where a sole employee was stationed.

Despite the repeat youth customers, the healthy demand for her store offerings was not sufficient to keep Lee’s business afloat financially. Sound inventory control and positive cash flow needed to be in place as well. These were not the case.

Conclusion

Lee’s risk-taking nature as a start-up entrepreneur is indicative of any sole proprietor entering the world of business. She was also characterized as hardworking, and willing to give her best towards the retail venture’s success.  She knew that she had a corner-lot location advantage in the central part of the village.  She knew what attracted the youth market, who were loyal customers. However, Lee had no known access to small business resource assistance to enable her to succeed with her venture.  With training as a retail proprietor, Lee could have avoided the pitfalls of operating her store. The training could have exposed her to the importance of having positive cash flow. Cash flow is noted as the life blood of all businesses, and running out of cash is the definition of failure in business. In effect, cash flow problems are responsible for causing over 70% of businesses to fail within their first year, and consequently attributed as the main reason for business failure.

The 1990’s brought a greater opportunity for aspiring and existing small businesses on Guam, through the establishment of the Guam Small Business Development Center, Pacific Islands Small Business Development Center Network. Established in May 1995, this program, funded by the U.S. Small Business Administration, was situated within the University of Guam’s College of Business and Public Administration. Its mission is to support the growth and economic development of the U.S. affiliated pacific islands in the western pacific region by providing high quality (free) one-on-one confidential counseling and training to existing and prospective small businesses (www.pacificsbdc.com).  Hundreds of small business owners on Guam could have benefitted through the services afforded by this operation. Lee was definitely a woman before her time, and survived entrepreneurship as long as she was capable. The existence of a small business development center would have been her saving grace.

By Anita Borja-Enriquez, DBA
Dean, University of Guam School of Business and Public Administration