Business Development Service

(BDS)
Introduction
Overview of MSEs

The micro and small business industry has been

recognized as one of the most appropriate means of

developing the industrial economy of developing

countries.
 Small-scale industries facilitate the tapping of

developing countries.
Cont..
 Small business facilitate the tapping of resources
which otherwise would remain unused.
 These resources included entrepreneurship,
capital, labor and raw materials. They can
mobilize rural savings which may otherwise
remain idle or may be spent on luxuries or
channeled into non-productive ventures.
• They are fairly labor intensive, small
businesses which create employment
opportunities at a relatively low capital cost.
• Reserve the current trend of the migration of
the people from rural to urban areas in search
of job and life.
•
Cont...

• The small business unit requires only a less

capital outlay and at the same time, provides
more employment than the large businesses.
• A small business does not require highly
sophisticated technology.
Definitions of Micro and Small Enterprises
• Discus SMEs defination in Ethiopian case?
Importance of Micro and Small Enterprises

• Source of new goods and services

• Self-empowerment
• Employment generation
• Growth potential
• Export contribution
• Flexibility
• Decentralization
• Distribution of economic power
Cont....
• Mobilization of resources
• Optimal utilization of local resources
Economic, social and political aspects of
small business (Discussion)
Small Business Failure Factors
 Mismanagement
 Implementation delay
 Poor information system
 Energy problem
 Improper technology
 Marketing
 Overtrading
 Competition
 Raw materials and cost of production
 Human resource
Problems in the Ethiopian Small Business Industry

 Securing finance
 Lack of management competence and exposure
 Non availability of raw materials
 Markets and distribution networks
 Limited government support
 Absence of technological know-how
 Widespread corruption
BDS and SMEs
 Micro and small enterprises not only need
financial support but also business development
service(BDS) to stimulate growth.
 Capacity-building inputs are mainly targeted at
enhancing the performance of an individual
business, increasing access to markets, and
improving their competitiveness and
profitability.
 BDS include a wide range of non-financial support
services concentrated in the following categories: market
access, infrastructure, policy advocacy,
bookkeeping/accounting, legal advice, consulting, input
supply, training and technical assistance, technology and
product development, and alternative financing
mechanisms as well as business incubation .
In supporting the development and sustainability
of SMEs, these services help to increase
employment; generate higher incomes and provide
economic security
Such interventions at the micro-level contribute
to the alleviation of poverty and empower
vulnerable groups by the means of economic
development and growth
The main objectives of BDS are:
(a) Provide non-financial services (e.g., accounting and
legal advice) to SMEs at affordable costs,
supplementing the role of financial services;
(b) Support SMEs in their promotion, development,
and sustained growth; and
(c) Facilitate SMEs’ development of competitive
advantages.
Relationship Building
Learning Outcomes
 Collect, analyse and communicate information
and ideas
 Develop trust and confidence
 Develop and maintain networks and
relationships
 Manage difficulties to achieve positive
outcomes
Effective Relationships
“People want to know that they are important to an
organization and that their work is important to
the work of the organization.

Good managers do this.”

Bill Cossey
Useable relationship
 Relationship is useful when it is:
¨ Valid
¨ Reliable
¨ Accurate
¨ Consistent
¨ Sufficient
¨ Verifiable
¨ Timely
The result of ratationship
Good quality relationship
+
honest, open communication
=
high productivity.
Appropriate Method and Pattern of
relationship
Analyze your audience
Decide your purpose
Identify the subject
Consider the context
List/think about all issues/topics to be included
Decide sequence or strategy to deliver message
Individual Differences in Relationship
¨ Perceptions
¨ Motivation
¨ Gender
¨ Self-esteem
¨ Life Stage
¨ Values and Attitudes
¨ Locus of Control
Cont...
¨ Education and Skills

¨ Preferences

¨ Socio-cultural

¨ Career Goals

¨ Expectations

¨ Position roles
Develop Trust and Confidence

• TRUST – can be defined as confidence, the

absence of suspicion, confirmed by our track
record and our ability to correct.
• People with a great deal of CONFIDENCE feel
good about themselves and think that they are
able to accomplish most tasks that confront them.
Cont....

• Treat people with integrity, respect and empathy

• Develop and maintain positive relationships

• Gain and maintain trust and confidence

• Adjust interpersonal styles to the social and

cultural environment
Developing Effective Relationships
 Support each other
 Learn from each other
 Engage in meaningful interaction
 Acknowledge difficulties
 Provide accurate information
Cont...

 Clarify expectations, priorities

 Initiate continuous improvement

 Communicate/celebrate success

 Work across teams - job rotation

 Communicate openly, honestly and

consistently
Treat People with Integrity, Respect and
Empathy

• Be sensitive to the needs of others

• Communicate openly and honestly
• Be reliable
• Be loyal to the organisation and cliants
• Be self motivated
Cont..

 Be collaborative

 Treat people equitably

 Be concerned about people’s welfare

 Consult with employees

 Appreciate individual differences

 Plan tasks well

Building client Confidence
and Trust

• Provide quality work

• Make customers feel comfortable
• Foster partnerships
• Build long–term relationships
• Under promise, over deliver
BUSSINESS DEVELOPMENT SERVICE FOR
START UP

Business Opportunity Diagnosis

Characteristics Of An Entrepreneur
The Market Study
The Product Or Service
Ownership, Management And Staff
Financial And Accounting Analysis
Risks And Dangers
Business Plan
BUSINESS DEVELOPMENT SERVICE FOR
EXISTING
BUSINESS HEALTHCHECK
First Impressions
Planning Checklist
Monitoring checklist- Product
Marketing
Production And Operations
Business Environment Analysis
Finance
Human Resources
Other Issues
MARKETING MANAGEMENT

Learning Objectives:
• By the end of this presentation, learners will
be able to:
• Define marketing concepts.
• Describe the role of marketing in achieving
the goals of a business enterprise.
• Apply the various marketing strategies in their
businesses
What is marketing?
 Marketing is the effort to identify and satisfy
customers’ needs and wants.
 It involves finding out who your customers are,
what they need and want, the prices, the level of
competition.
 It involves the knowledge and all the processes
you undertake to sell your product.
 Marketing answers the following questions;
Cont..

Who are my customers?

What are my customer’s needs and wants?
How can I satisfy my customers’?
How do I make a profit as I satisfy my
customers?
cont...

 Marketing is “an organizational function and a

set of processes for creating, communicating,
and delivering value to customers and for
managing customer relationships in ways that
benefit the organization and its stakeholders.”
Cont...
 To simplify this definition, marketing is all of
the processes—planning, pricing, promoting,
distributing, and selling—used to determine
and satisfy the needs of customers and the
company.
 The marketing concept uses the needs of
customers as the primary focus during the
planning, production, distribution, and
promotion of a product or service.
To use the marketing concept successfully, businesses
must be able to
• Identify what will satisfy the customers’ needs and wants
• Develop and market products or services that customers
consider better than other choices
• Operate profitably
An important part of implementing the marketing
concept is developing a marketing mix that helps meet
customer needs and enables the business to earn a profit
The marketing mix is a blending of the product, price,
distribution, and promotion used to reach a target market
Target Market
estimate the demand for your products or services by
identifying primary customers.
The target market includes the individuals or companies
that are interested in a particular product or service and
are willing and able to pay for it
Target customers are the customers you would most
like to attract.
Understand the Competition
Knowing a lot about your competition will help you
define your target market
Businesses enter into areas where there is competition
all the time
However, they have to identify some special customer
need or want that is not being met
Customers may be happy with the products or services
being offered, but they may be unhappy with the prices
being charged. Customers might be willing to pay more
for better quality. In either case, a customer need is going
unmet by competitor, indicating a possible opportunity
for an entrepreneur.
Market Segments
Market segments are groups of customers who share
common characteristics
 Segmenting, or dividing your target market into
several small groups, can help you develop a product or
service that will meet customer needs
 Market research can be used to identify market
segments.
Creating a customer profile can be very useful in
market segmentation
Customers may be profiled based on many types of
data including demographics, psychographics, use-based
data, and geographic data.
Market Research
to succeed, you need to find out who your customers
are, what they want or need, and how much they are
willing to pay for your product or service
Market research is a system for collecting, recording,
and analyzing information about customers,
competitors, goods, and services
secondary data and primary data will be used to
gather information
Secondary Data
 Secondary data is data found in already published
sources. Information on population, family size,
household income, economic trends, industry forecasts,
and other information can be found in secondary data
resources.
Places to find secondary data include
1. Publications issued by government and community
2. Books about specific industries
3. Information on websites
4. Books about other who set up similar businesses
5. Specialized magazines and journals
6. Newspaper articles and statistics
Primary Data
Primary data is information collected for the very first
time to fit a specific purpose. A researcher collects primary
data to help identify and understand the target market.
There are a few ways to collect primary data, such as
- surveys
- Observation
- focus groups
Six Steps of Market Research
 Define the Question
Determine the Data Needed
 Collect the Data
Analyze the Data
Take Action
Evaluate the Results
The Marketing Strategy
A marketing strategy is a plan that identifies how these
goals will be achieved. Your strategy should address
• Product introduction or innovation
• Promotion
• Pricing
• Projected profitability
• Distribution
• Sales or market share
marketing goals should be written following the
SMART guidelines
Establishing short-,medium-, and long-term marketing
goals ensures that the marketing today fits with the
vision for business tomorrow.
Competitive Analysis
Identifying and examining the characteristics of a
competing firm is called a competitive analysis.
Analyzing the strengths and weaknesses of
competition will help to determine what you can do to
get customers to buy from your business.
 Follow these steps to begin your competitive analysis.

1. Make a list of your competitors

2. Summarize the products and prices offered by your
competitors
3. List each competitor’s strengths and weaknesses.
4. Find out the strategies and objectives of your
competitors.
marketing mix
The marketing mix—the four Ps—is often
referred to as a set of tools used by a company to
achieve marketing-related goals.
 the marketing mix is so basic to a company’s
business model that marketing strategy often defines
company or corporate strategy
 Product
Price
Place
Promotion
Product
product means tangible goods, intangible services, or
a combination of these. Products are the “bundle of
satisfaction” that consumers receive in exchange for
their money.
Select Product Features
Consider Branding, Packaging, and Labeling
Position Your Products or Services
Price
 The price is the actual amount a customer pays for
a product or service.
 Prices charge must be low enough so that
customers will not from competitors

price objectives
• Maximize sales
• Increase profits
• Discourage competition
• Attract customers
• Establish an image
Price a Product
Demand-Based Pricing
Cost-Based Pricing
Competition-Based Pricing
Time-Based Pricing
Pricing Techniques
Introductory Pricing
-price skimming
- penetration pricing
Psychological Pricing
Discount Pricing
Distribution
Distribution is an important component of the
marketing mix that involves the locations and methods
used to make products available to customers
Channels of distribution are the routes that products
and services take from the time they are produced to
the time they are consumed
Channels are either direct or indirect
Channel Options
1. Manufacturer to Consumer
2. Manufacturer to Retailer to Consumer
3. Manufacturer to Wholesaler to Retailer to Consumer
4. Manufacturer to Agent to Wholesaler to Retailer to
Consumer
Promotion
 promote business to make customers aware of the
benefits of buying
Promotion takes many forms, including
-advertising
-publicity,
-personal selling
-sales promotion
Human Resource Management
Recruitment
Selection
Placement
Training
Motivation
Leading
Compensation
Employee safety
Performance appraisal
Reward
Demotion
Transfer
Termination
Finance Management
Get Started with Finances
prepare financial statements
These statements allow potential lenders and investors
to decide if the business is viable and whether the
financing requesting is reasonable
 Before preparing financial statements calculate
startup costs
Common startup costs include
• Equipment and supplies
• Vehicles, including delivery trucks and other
• Remodeling, such as electrical and plumbing expenses
• Legal and accounting fees
• Licensing fees
Prepare Financial Statements
pro forma financial statements
Actual financial statement

Cash Flow Statement

A cash flow statement describes how much cash
comes in and goes out of a business over a period of
time
Income Statement
An income statement is a financial statement that
indicates how much money a business earns or
loses during a particular period.
 shows how much profit or loss generated . For
this reason, it known as profit and loss statement.
Balance Sheet
A balance sheet lists what a business owns, what it owes,
and how much it is worth at a particular point in time.
 It does this by identifying the assets, liabilities, and
owner’s equity of the business.
The balance sheet is based on an equation called the
accounting equation.
Financing the Business
Equity financing
Personal sources
Commercial banks
Finance companies