Meaning and Characteristics of Resources

1Uwineza’s Monday list

Uwineza runs Umurava Juice, a small business in Rubavu that sells bottled passion-fruit juice to shops and hotels. Every Monday she writes the same list before work starts:

• 90 kg of passion fruit, bought from two farmers in her sector;
• clean water, sugar, 250 empty bottles and labels;
• the blender, the strainer, the cooking pot and the fridge;
• electricity for the blender and the fridge;
• her two helpers, her own recipe, and her knowledge of which hotel buys on which day;
• Frw 180,000 on her mobile-money account to pay the farmers;
• three working days before the Thursday deliveries.

Every item on that list is a resource. Some you can touch, like fruit and bottles. Some you cannot, like her recipe, her customers’ trust and her time. This lesson asks what all of them have in common, and why an entrepreneur has to treat every one of them as limited.

Umurava Juice, its people and all its figures in this unit are illustrative.

2A business is a system that uses resources

The diagram shows Umurava Juice as a simple system. Resources go in on the left, production changes them, and goods come out on the right. When customers pay, the money buys the next round of inputs, so the cycle can repeat. A business that wastes its inputs, or sells its output for less than the inputs cost, cannot keep this cycle turning for long.

Notice the by-product: the peels left after the juice is squeezed. They are waste to Uwineza, but a pig farmer or a compost maker nearby can use them as an input. Whether a thing is a resource depends on whether someone has the knowledge and the means to use it.

3Characteristics of resources

Resources are very different from each other, yet they share eight features. Learn each one with an example.

1. They are limited (scarce). There is never enough to satisfy every want. Uwineza cannot buy all the fruit she would like, because her money and her fridge space both run out. You met scarcity in S1; here it is the reason every resource must be planned.
2. They are useful. A resource has utility: it can satisfy a need or help to produce something. A broken blender that cannot be repaired is no longer a resource for juice-making.
3. They have alternative uses. The same Frw 180,000 could buy fruit, a second fridge or a motorcycle delivery for a month. Choosing one use means giving up the others (the opportunity cost).
4. They work together (they are complementary). A fridge without electricity produces nothing, and fruit without labour stays fruit. Output needs the right combination.
5. They have a cost. Even a resource that nobody sells has a cost: an hour Uwineza spends queueing is an hour she cannot spend selling.
6. They are unevenly distributed. Fertile volcanic soil, rain, minerals and skilled workers are found in some places and not others, which is one reason regions trade.
7. Some can be renewed and some can be used up. Next season’s passion fruit will grow again; a mineral dug out of the ground will not.
8. They can be developed. Training turns a new helper into a skilled one; terracing turns a steep slope into productive land. People add value to resources through knowledge and work.