Loading

Two Sides of the Same Coin USAID’s work in supporting Small Businesses and Workforce Development in Guatemala

Sandra Agustin, a 28 year old mother of two, was struggling to find work to support her young family in her home town of Huehuetenango, a city in the Western Highlands of Guatemala. Like the more than 200,000 other young people entering the job market each year in Guatemala, she was facing the challenge of finding employment in an economy that is only creating 20,000 new jobs each year. A lack of educational opportunities had left her subject to jobs with long, irregular hours and low pay in the informal market. As a young mother this left her struggling to make ends meet.

Julio Castillo, a 27-year-old entrepreneur from Huehuetenango, was searching for qualified employees to help make his dream of an environmentally conscious cafe a reality. Julio grew up around coffee, with his family producing some of the excellent beans that Huehuetenango is known for. His plan was to leverage his knowledge of the coffee industry to create Calma Cafe, an urban social space serving healthy food and coffee. As a small business owner he was also facing many challenges. The legal hurdles placed in front of an entrepreneur to open a business in the formal market are colossal, requiring time, patience, and money. On top of that, he needed to develop an operating model, create a winning menu, and find suitable employees.

USAID’s Creating Economic Opportunities Project uses market-driven approaches to work with more than 430 small and medium-sized businesses, like Calma Cafe, to strengthen financial and administrative management, optimize production, identify new market opportunities, and build productive capacity to compete, grow sales, and create jobs.

Strengthening an economy can be as simple as getting the right applicant in front of the right employer. USAID promotes employers and job seekers by bringing the traditional job fair out to smaller cities, targeted job fairs featuring one or two employers, and by applying technology to job searching through online platforms. For Sandra, and other job seekers, this included capacity building workshops to increase her job-searching skills, preparing her for what employers are looking for.

Julio worked with the CEO project to strengthen Calma Cafe’s operating model, collaborated with a professional chef to define the menu, and with a marketing specialist to aim the business’s digital strategies at his target audience. Founded in 2019, the business is now growing and due to its strong foundation is creating new job opportunities for young people like Sandra.

As with all business, the COVID-19 pandemic hit Calma Cafe hard, initially cutting sales by 85%, but Julio was determined to not lay off employees. Instead he leveraged the outdoor design of the cafe to appropriately distance tables, promote self-service, and provided home delivery service. Sales have recovered, and to-date the company has actually needed to hire three new employees.

USAID provided me with access to very capable people who know how to run a business. As a new entrepreneur, I didn’t have these skills. This supported me to build a good foundation and solid foundations are important for entrepreneurs. -Julio Castillo, Owner, Calma Café, Huehuetenango

The lack of economic opportunity is consistently cited by Guatemalans as a primary driver of irregular migration. To mitigate this, USAID supports activities by the government, civil society, and the private sector to promote broad-based economic growth and enable all Guatemalans to chart their own prosperous futures. By stimulating new investment, mobilizing financing in underserved sectors, and improving the competitiveness of Guatemalan enterprises, USAID is supporting entrepreneurs, job creation, and economic opportunities, making communities more resilient to the drivers of irregular immigration.

Sandra is now a barista at Calma Café, earning a stable income and receiving all the benefits of a job in the formal market, including protection from exploitation, lawful wages, and predictable hours which help her spend more time with her small children. She has already opened a savings account and plans to go back to school to continue her education.

Julio is continuing to grow in the spacious treed lot outside Huehuetenango’s historic city center. He is adapting to the conditions imposed by COVID-19, and Julio is looking to expand his business by opening another location.

More than 740 people have found sustainable jobs in growing companies, with above-average salaries and benefits as a result of the project. USAID is creating economic opportunities, promoting prosperity, and increasing self-reliance in Guatemalan communities.

Through a market-led approach, USAID’s Creating Economic Opportunities Project grows and expands formal businesses and employment to create income generating opportunities for Guatemalans, primarily in non-agricultural sectors. By focusing on select municipalities in five departments of Guatemala’s Western Highlands, with particular attention given to intermediate and emerging intermediate cities, as well as the department of Guatemala (area with high levels of irregular migration), USAID is benefitting poor and vulnerable populations, particularly indigenous youth.

Created By
Benjamin Ilka
Appreciate

Credits:

Photos by: Benjamin Ilka and the CEO project