Cover Image
close this bookTraining Entrepreneurs for Small Business Creation: Lessons from Experience (ILO, 1988, 154 p.)
close this folder2. Factors influencing programme design
close this folder2.3 Development infrastructure
View the document(introduction...)
View the document2.3.1 Credit and venture capital
View the document2.3.2 Sites and facilities
View the document2.3.3 Technology evaluation and transfer
View the document2.3.4 Membership organisations
View the document2.3.5 Training and development organisations
View the document2.3.6 Consulting and advisory services and follow-up

2.3.6 Consulting and advisory services and follow-up

Experience indicates that effective and timely follow-up of trainees upon completion of their programme is necessary in order to achieve a high success rate in business creation and survival.

It is likely that a business which starts from scratch with a new product and people who have not produced it before, will take at least five years to achieve managerial and financial independence - that is, for the project to be able to identify problems and know the resources available for solving them without the sponsoring agency having to act as intermediary.26

Entrepreneurship development programmes seem not to create or even reveal “loan wolf” entrepreneurs who go away and prosper in spite of hardship and harassment, exploiting every problem as a new opportunity. The entrepreneurship development programme entrepreneur is a somewhat less vital creature, and nearly every programme offered a wide range of support for its “graduates”.27

As trainees come out of the supportive training programme and enter the more hostile environment wherein they must implement their business plan, not only is their motivation taxed but also the limits of the skills and knowledge acquired in the training programme become apparent. No training programme can provide the entire range and depth of knowledge required. Nor can trainees be fully prepared for the indifference, if not outright hostility, frequently encountered from credit institutions, suppliers, customers and competitors. An advisor, consultant, or even a “sympathetic ear” can often smooth the way in project implementation and advise on its operation once it has been established.

While programmes should have a staff member who maintains contact with the “graduates”, this person need not be a specialist consultant if adequate referral agencies exist. In the Malawi programmes previously referred to, one organisation for accounting and marketing and another for financial and technical consulting exist. Both are subcontracted by the Malawi Entrepreneur Development Institute to make periodic calls on the “graduates” of the programme. The Entrepreneurship Development Institute of India handles it in this fashion:

Each group of entrepreneurs in an entrepreneurship programme is looked after by the entrepreneur trainer-motivator. He is responsible for organising post-training support which involves follow-up on loan applications for finance, facilitating infrastructure, such as land, factory shed, and trouble-shooting. His counselling at times of problems, resourcefulness and liaison skills come handy in expediting project implementation... Once units are in operation, the in plant counselling and support responsibilities are left to the financing institutions and State level Consultancy Organisations wherever they are offering management and marketing services.28

In order to maintain the motivation of its entrepreneurs the Xavier Institute organises visits by the trainers, issues newsletters carrying information about how the trainees of different batches are doing, organises seminars and meetings, and encourages the formation of entrepreneur associations.

Consultancy organisations staffed by technical and management specialists often have difficulty in relating to very small enterprises, particularly those in rural areas where the entrepreneurs are likely to be owner/managers in the sense previously defined - that is, the business is perceived as an extension of the owner’s personality, intricately bound with family needs and desires. Profit-optimising and efficiency techniques of large-scale and/or growth-oriented businesses are often inappropriate. Improvising simple business improvement methodologies and relating these to the more personal goals of the owner requires different skills from those common in professionally staffed consultancy organisations. Thus, where a training programme subcontracts its consultancy component, it will in all probability have to offer training to the consultancy organisation in the specifics of dealing with small-scale entrepreneurs.29

While it is not unusual for a management or technical consultancy organisation to have an entrepreneur training programme as part of its activities it is relatively rare, and rarer still for an entrepreneurship training organisation to have a full scale consultancy organisation as part of its activities. However, it is rather common for both types of organisations to work closely together to mutual advantage. Entrepreneur training responsibilities prove to be a useful form of professional development for consultants, and vice versa. Entrepreneur training can become too much of an academic exercise without the discipline of applying the knowledge that effective consulting requires. On the other hand the conceptual thinking and total business orientation required for effective teaching of entrepreneurship broadens the horizons of a specialist consultant. The cross-fertilisation of concepts and practices enhances training materials, adds credibility to training and adds variety and challenge to the jobs of both consultants and trainers.

Notes

1 Patel, V.G.: Entrepreneurship development programme in India and its relevance for developing countries, paper prepared for the Economic Development Institute of the World Bank (Ahmedabad, Entrepreneurship Development Institute of India, 1985).

2 Harper, Malcolm: Entrepreneurship for the poor (London, Intermediate Technology Publications, 1984).

3 Levitsky, J.: Review of World Bank lending to small enterprises (Washington, DC, The World Bank, Financial Development Unit, Industry Department, March 1985).

4 Readers wishing to examine the problems to be faced in this area and some of the steps to be taken from a policy point of view are referred to Philip A. Neck and Robert E. Nelson (eds.): Small enterprise development: Policies and programmes. Management Development Series No. 14, Second (revised) edition (Geneva, International Labour Office, 1987).

5 See Carr, Marilyn: Economically appropriate technologies for developing countries: An annotated bibliography (London, Intermediate Technology Publications, revised edition, 1981). Also by the same author and publisher: Appropriate technology and rural Industrialisation. Occasional Papers 1.

6 Patel, 1985, op. cit.

7 Buzzard, Shirley: Income-generating projects of small-scale development organisations: A field study (Warwick, Rhode Island, Foster Parents Plan International, 1984).

8 Harper, 1984, op. cit.

9 University of the Philippines, Institute for Small Scale Industries: Trainer’s manual on entrepreneurship development (Singapore, Technonet Asia, 1981).

10 Patel, 1985, op. cit.

11 Garland et al: Academy of Management Review, as cited in Sexton, Donald L.: “Entrepreneurship education at the crossroads: A plan for increasing effectiveness”, in Journal of Small Business Management (Morgantown, West Virginia) Apr. 1984.

12 Kilby, Peter, (ed.): Entrepreneurship and economic development (Toronto, Collier-Macmillan Canada, 1971).

13 Programme of the Xavier Institute of Social Services, Ranchi, India, 1980.

14 SKIM Industrial Market Research: International small business survey: Preliminary results June 1984 (Rotterdam, The Netherlands, SKIM PO Box 1459, 1984). Presented at the International Small Business Congress, Amsterdam, October 1984.

15 Levitsky, 1985, op. cit.

16 Patel, 1985, op. cit.

17 Brown, Jason: Program for investment in the small capital enterprise sector: Assisting the smallest economic activities of the urban poor: Part II: Case studies India (Cambridge, Massachusetts, Accion International/AITEC, 1980), p. 8.

18 Chowdhury, A. Momin: A behavioral model of entrepreneurship development for self-employment of educated unemployed youth in Bangladesh (Dacca, Bangladesh Management Development Centre, 1981).

19 United Nations Industrial Development Organisation: The effectiveness of industrial estates in developing countries (Vienna, 1978).

20 Levitsky, 1985, op. cit.

21 Harper, 1984, op. cit.

22 See for instance: Carr, Marilyn (ed.): Economically appropriate technologies for developing countries: An annotated bibliography (London, Intermediate Technology Publications, revised edition, 1981), and: Centre for Industrial Development (ACP-EEC Lomonvention): Inventory of adapted technologies for ACP countries (Brussels, Centre for Industrial Development, revised edition, 1982), Vols. I, II and III.

23 Bullock, J.P.: “The politics of small business” (Washington, DC, Symposium on Small Business, 1976). Available from the Canadian Federation of Independent Business, Toronto, Canada.

24 Harper, 1984, op. cit.

25 Nelson, R.E.: Owning and operating a small business: Strategies for teaching small business ownership and management (Urbana-Champaign, Illinois, University of Illinois, 1976); Gibb, Alan: Programme for school curriculum: Education for enterprise: (Durham, United Kingdom, Small Business Centre, Durham University Business School, 1982); and Loucks, K.E.: Survey of Canadian small business management and entrepreneurship education activities (Ottawa, Ministry of Industry, Trade and Commerce, 1980).

26 Buzzard, 1984, op. cit.

27 Harper, 1984, op. cit.

28 Patel, 1985, op. cit.

29 Excellent references in this regard are: Harper, Malcolm: Consultancy for small business (London, Intermediate Technology Publications, 1977); and Grierson, J.P., Harper, M. and Lenz, D.: E thusa bagwebi - A manual for enterprise development (Gaborone, Botswana, PfP Botswana, 1983).