BDS Ethiopia

Ethiopian Business Development Services Network (EBDSN)
Toolkit for BDS Facilitation
Demand-driven
Business Development
Services (BDS)
Needs Assessment - Action-Planning - BDS Delivery
Addis Ababa 7/2005
EBDSN
www.bds-ethiopia.net German Technical Cooperation
Toolkit for BDS Facilitation
Demand-driven
Business Development
Services (BDS)
Needs Assessment - Action Planning - BDS Delivery
Addis Ababa 7/2005
Published by:
P.O. Box 11133 Addis Ababa, Ethiopia
In collaboration with:
Ethio-German Micro and Small Enterprises Development Project (MSE Project)
Project implemented by:

GFA Management GmbH, Germany
www.gfa-group.de
On behalf of:
German Technical Cooperation (GTZ)
www.gtz.de
Editors:
Dieter Gagel (mail@gagel.net), Fantahun Melles, Karl Bartels
July 2005, Addis Ababa, Ethiopia

Table of contents
List of Abbreviations
Introduction .............................................................................................................................. 1
1. Demand-driven Business Development Services (BDS) ............................................... 3

1.1 What are BDS? ....................................................................................................... 3
1.2 Demand-oriented services ...................................................................................... 3
1.3 Criteria to select businesses for BDS ...................................................................... 4
1.4 Implementation methodology (situation analysis and action-planning) .................... 5
1.5 Strengths of a participatory BDS facilitation approach........................................... 14
1.6 Developing a commercial BDS market ................................................................. 14
1.7 Costs of BDS implementation ............................................................................... 16
1.8 Business Development Services for medium and large enterprises ...................... 16
1.9 Achievements and impact of the Ethiopian BDS network ...................................... 18
1.10 BDS success stories ............................................................................................. 21
Hollow-bloc production, Car wash, Food processing, Municipal garbage
collection, Oil mill, Food and spices, Metal works, Electronics provider,
Metal works, Wood and metal works
2. Training Workshop on BDS Implementation ................................................................ 31

2.1 Action-oriented training methodology .................................................................... 31
2.2 Capacity building on the demand-driven BDS approach........................................ 31
2.2.1 Introduction by photo documentation and PowerPoint presentation........... 31
2.2.2 Introducing situation analysis and action plan............................................ 33
2.2.3 Field visits to businesses ........................................................................... 34
2.2.4 Drafting the final situation analysis and action plan.................................... 35
2.2.5 Management tools for facilitators and organisational development ............ 35
2.2.6 Introducing the BDS network webpage...................................................... 36
2.2.7 Distribution of BDS formats and workshop report ...................................... 36
2.2.8 Workshop evaluation by the participants ................................................... 37
2.3 Preparation for a five-day training for facilitators ................................................... 37
3. Next steps to BDS Implementation ............................................................................... 39

3.1 Organising a BDS cycle ........................................................................................ 39
3.2 Cost calculation for BDS implementation and time needed ................................... 39
3.3 Introducing a follow-up system.............................................................................. 40
3.4 Monitoring and evaluation ..................................................................................... 40
References............................................................................................................................ 43
Annexes .............................................................................................................................. 47
Annexes
Annex 1: Training of trainers workshop programme ...........................................49

Annex 2: Five days standard programme on BDS training for facilitators............51
Annex 3: Six case studies on BDS interventions from Tunisia and Ethiopia .......53
Annex 4: PowerPoint presentation 2002 on demand-driven BDS approach .......59
Annex 5: Commercial Bank example of situation analysis and action plan .........63
Annex 6: Activity report 2001-2005 on Business Development Services ...........76
Formats
Annex 7: Situation analysis overview..................................................................84
Annex 8: Five-months action plan ......................................................................85
Annex 9: Five-months activity report...................................................................86
Annex 10: Cost calculation of BDS activities ........................................................87
Annex 11: SWOT analysis format for impact monitoring.......................................88
List of Abbreviations
AWEA Amhara Women Entrepreneurs Association

BDS Business Development Services
CBE Commercial Bank of Ethiopia
CEFE Competency based Economies through Formation of Enterprises
EBDSN Ethiopian Business Development Services Network
FeMSEDA Federal Micro and Small Enterprises Development Agency
ILO International Labour Office
M+E Monitoring and Evaluation
MSE Micro and Small Enterprises
NGO Non Governmental Organisation
OD Organisational Development
PO Partner Organisation
ReMSEDA Regional Micro and Small Enterprises Development Agency
SME Small and Medium Enterprises
SWOT Strengths, Weaknesses, Opportunities, Threats
Introduction
Business Development Services (BDS) facilitation has been introduced with great success in
Ethiopia since 2001 by about 30 public, private and commercial business development
institutions. Nevertheless, BDS delivery on the part of private commercial BDS providers still
remains weak and has to be strengthened further, if it is to become sustainable.
This publication aims at spreading BDS facilitation as a tool for enterprise promotion all over
the country and would serve as a toolkit for national institutions and internationally funded
projects alike. The experiences reflected in this publication were gathered over the last four
years by the Ethiopian Business Development Services Network (EBDSN) in cooperation
with the Ethio-German Micro- and Small Enterprises Development Project . The MSE
Project has been implemented by GFA Management on behalf of the German Technical
Cooperation (GTZ). One of the most important lessons learned is that a BDS facilitation
approach should be action-oriented: BDS training should be translated into outright
implementation of BDS actions. This is the reason why BDS training should involve direct
preparation on how to put BDS into practice.
Chapter 1 provides an introduction to BDS in general and to our approach Demand-driven

Needs Assessment and Business Services Delivery as applied in Ethiopia:
Section 1.1 answers the question What is BDS? and provides a range of
examples of Business Development Services.
Section 1.2 highlights the importance of demand-orientation in BDS promotion
and how this became an important starting point for our BDS approach.
Section 1.3 provides an instruction on how to decide where to get started with
BDS Promotion in answering the question Which enterprises should we
target? .
Section 1.4 introduces the reader to the implementation methodology of our
BDS approach and its three core elements situation analysis, action planning
and delivery. The practical steps of implementation are explained in more detail
in Chapter 2.
Section 1.5 points out why it is so important to apply a participatory approach in
BDS facilitation.
Section 1.6 discusses the question of how to commercialise BDS and develop a
functioning market. The section relates to section 1.2 and what has been said
on demand orientation, and puts it into a context with practical issues and the
situation in Ethiopia.
Section 1.7 raises a practical issue the costs of BDS implementation. More
details on this are provided in Chapter 3.
Section 1.8 provides an example of BDS provision to Medium and Larger
Enterprises, as opposed to the main part of this publication which mainly deals
with Micro and Small Enterprises.
Section 1.9 and 1.10 refer to the achievements of the EBDSN and present
illustrative case studies.
Chapter 2 and 3 explain the practical steps of how to implement the BDS approach
developed by the EBDSN. While Chapter 2 concentrates on the training workshop to build up
the necessary BDS facilitation capacity, Chapter 3 covers the remaining organisational steps.
On the webpage of the Ethiopian BDS Network (www.bds-ethiopia.net) you will find further
information on BDS providers and business development agencies, BDS activities achieved,
BDS implementation approaches and strategies, BDS-related issues, such as taxation,
marketing, export, vocational and entrepreneurship training, sector studies and policy issues.
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1. Demand-driven Business Development Services (BDS)
1.1 What are BDS?

Business Development Services (BDS) comprise a wide range of non-financial services
provided by private suppliers (BDS providers) to entrepreneurs who use them to efficiently
operate and make their businesses grow. The types of services in a functioning BDS system
are determined by the demand articulated on the part of the businesses.
Some examples of BDS include:

Market access services:
Market information; market linkages; trade fairs and product exhibitions;
development of samples for buyers; subcontracting and outsourcing; marketing
trips and meetings; market research; market space development; showrooms;
packaging; advertising.
Input supply services:
Linking MSEs to input suppliers; improving suppliers capacity to provide a
regular supply of quality inputs; facilitating the establishment of bulk buying
groups; information on input supply sources.
Technology and product development services:
Technology transfer/commercialisation; linking SMEs and technology suppliers;
facilitating technology procurement; quality assurance programmes; equipment
leasing and rental; design services.
Training and technical assistance:
Mentoring; feasibility studies and business plans; exchange visits and business
tours; franchising; management training; technical training; counselling/advisory
services; legal services; financial and taxation advice; accountancy and
bookkeeping.
Infrastructure-related and information services:
Storage and warehousing; transport and delivery; business incubators;
telecommunications; courier services; money transfer; information via print,
radio, TV; internet access; computer services; secretarial services.
Policy and advocacy:
Training in policy advocacy; analysis and communication of policy constraints
and opportunities; direct advocacy on behalf of MSEs (e.g. taxation problems
and premises); sponsorship of conferences; policy studies.
Access to finance
BDS providers do not provide direct financial support, but link businesses to
banks and micro-finance institutions; provide information on credit schemes and
conditions; encourage savings; assistance in business planning for loan
applications.
1.2 Demand-oriented services

SMEs need a range of Business Development Services that contribute to the efficiency,
profitability and expansion of the business activities they pursue. Institutions involved in the
facilitation or provision of BDS need to base their service delivery methodology on the basis
of the needs of business operators. In short, BDS need to be demand-oriented.
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Supply-driven services will often not meet the needs of business operators and therefore
simply are not used or only if these are not connected to any costs. However, without the
respective willingness to pay for the services, there is no potential to achieve long-term
sustainability for their provision. On the other hand, SMEs often have no experience with
services which they consider really useful for them. Therefore, without an existing BDS
market it is very difficult to nurture a willingness to pay for BDS. So, the situation in Ethiopia
was how do you develop a demand-oriented approach if the willingness to pay is virtually not
existent?
The approach of the Ethiopian BDS Network was to include participatory needs assessment
in the BDS facilitation methodology. It is important that the needs assessment is participatory
because that is exactly what the willingness to pay is about the business operator s very
participatory expression of a need. Even though some of the services still had to be provided
for free of charge, due to BDS being new to most MSEs in Ethiopia and their willingness to
pay often low, we strongly believe that this is a practical approach to BDS, which has already
made a substantial impact in Ethiopia and has the potential for sustainability and further BDS
market development in the country.
1.3 Criteria to select businesses for BDS

BDS is not different from other markets: If you want to engage in BDS facilitation or BDS
provision, you first have to define your market. The selection of businesses to be involved in
BDS activities is not limited to narrow criteria, but depends on the capabilities of and the
services provided on the part of the concerned SME development agencies and BDS
providers. Our method of selection is a practical approach to getting BDS started. Facilitators
identify market segments in the intervention fields of their organisation, but the concrete
services are determined by the demand-driven needs assessment on a business level.
Some criteria on how to select a market segment for BDS development are:
Gender issue
Advocacy institutions for women choose women entrepreneurs. The Amhara Women
Entrepreneurs Association, whose BDS programme is funded by the ILO, focuses on
women entrepreneurs.
Sector or cluster approach
If your organisation intends to focus on tourism development, you should select
tourism related businesses, such as hotels, bars, restaurants, travel agencies and
souvenir gift shops;
If you have the intention of developing certain sectors/sub-sectors, you may focus on
areas, such as wood and metal works, construction, textile or food processing;
On technical and vocational training oriented structures, you may focus on production
and service trades, such as carpenters, blacksmiths, metal workers, bakeries and
barbers who may need more profound professional technical training and other
business development support services;
Export promotion related institutions choose export-import businesses
(e.g. Women Exporters' Forum);
The sector or cluster approach provides you with the opportunity of obtaining more
technical expertise with regard to the activities involved. Support activities may be
given to groups and similar business activities could be clustered for purposes of
group discussions and the exchange of experiences.
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Example of Addis Ababa City Administration
The Addis Ababa City Administration focuses on the following four sub-sectors with a
potential for growth:
Food processing, construction, textile, metal and furniture. In this case, the facilitators
at a Kebele administration level may select enterprises from these sub-sectors and
related activities.
Example of Commercial Bank of Ethiopia (CBE)

The Commercial Bank of Ethiopia provides counselling services based on our BDS
approach to its customer companies receiving credit. Most of these companies are
medium and large enterprises in the construction, transport, textile sector and trading
industries (for more details please refer to item 1.8).
Commercial BDS-providers
Commercial BDS providers should rather focus on small and medium enterprises that
have the financial capacity to pay for BDS and on those that have already developed
a real enterprise structure with a more complex production process and an internal
division of labour, with needs in management and accounting training, technical and
vocational training as well as business planning.
The size of the enterprise should be adapted to the BDS to be provided. Most of the
existing micro enterprises do not have the financial capacity to be served by paid
BDS. However, that does not mean that micro enterprises are to be neglected, but in
most cases they have to be served by non-commercial providers and facilitating
structures such as NGOs, FeMSEDA, ReMSEDAs and Chambers of Commerce.
Selection of businesses on grounds of practicality:

In order to make the facilitators work efficient and effective, businesses may also be
selected on the basis of the following criteria:
o Businesses that are in the vicinity of the facilitators' office, in order to
overcome transport problems;
o At the beginning choose businesses with less complicated problems. Do not
try to solve problems beyond your capacity or the capacity of your partners;
o Choose a variety of business activities first, in order to obtain an overview of
existing constraints in various sectors;
o Do not choose business operators who are not willing to collaborate;
o Do not choose business operators who are not ready for self-help initiatives
and only ask for assistance and grants;
o Do not choose businesses that encounter problems that are too complicated
to solve.
1.4 Implementation methodology

In order to put its demand-oriented approach into practice, the Ethiopian BDS Network
developed its own BDS implementation methodology: the Demand-driven Needs
Assessment and Business Services Delivery . It is a participatory method that is comprised of
a situation and problem analysis, action-planning and the delivery of demand-based services
to micro, small and medium enterprises (MSMEs).
The methodology is applied by MSME facilitators who are working in public, private, NGOs
and self-help business support institutions. These facilitators are trained in the application of
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the method. The BDS facilitator puts the method into practice by physically presenting
himself/herself to the selected enterprises. The first step is that the facilitator assists the
enterprise in identifying the main business problems and in proposing its own solutions. For
this participatory BDS approach, it is important to involve the business operator in the
situation analysis and problem identification of the enterprise.
The BDS facilitator subsequently helps the business operator to refine his/her own proposals
and makes additional suggestions. In addition to that, the facilitator not only provides the
business with on-the-spot advice, but also links the business to service providers (BDS
providers, training centres, public agencies and financial institutions), in order to receive the
necessary support for the realisation of proposals. Finally, the business operator needs to
commit himself to acquiring the business support services that he and his facilitator have
identified as being useful. This approach is participatory and likely to be sustainable, as it
ends up being a BDS that is paid for and directly targets the core problems identified by the
business operator himself.
a. Situation analysis
Every BDS facilitator visits 15 businesses and discusses their situation and main problems.
The data is documented in a situation analysis overview. The problems and solutions
forwarded by the business operator (refer to last column of situation overview) are then
transferred to a five-month action plan.
The data included in the situation analysis matrix is not exhaustive, but may provide us an
insight and idea of each of the enterprises concerned. Even in our first discussions with
business owners we may make observations and obtain some information about their main
problems. In the last column of the situation analysis format "Problems of and proposals by
the business operator himself" can be found, where preliminary ideas about potential self-
help initiatives of the business operator himself as well as additional support of the facilitator
can be gathered.
As a next step, you are expected to transfer these ideas into the action-planning matrix that
includes more detailed and realistic activities to be implemented. The situation analysis
overview contains the following issues:
Situation of selected enterprises in.....................................

Name / Activity Products Supply / Sales / Personnel / Cost per Problems identified by
Place / Equipment and Clients / Marketing Business month the owner himself and
services Management (Birr) his proposals for
solutions
Business 1
Business 2
Please refer to the example of a situation analysis on the next page
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Situation analysis of selected enterprises (example of Bahir Dar 7/2002)
Name / Activity Products and Supply / Sales / Staff / Cost per month Problems identified by the owner
Place / Equipment services Clients / Marketing Business Management (Birr) and his proposals for solutions
1. Haji Adgo, Bakery Products: Supply: East Africa Staff: Cost Problems identified by the owner himself:
Location: Main road, Keble 04, Different types of Industrial Group in Addis. 2 owners (brothers) Rent: 105 Br 1. Over taxation
Tel. 200689 bread and cakes Sometimes shortage of raw 4 labourers with education Elect. 204 Br 2. Lack of management and accounting skills
Room dimension 220 m2 (both materials. of grades 4 to 6 Water 40 Br 3. Market problem
for production and sales) Clients: Tea rooms, hotels, 2 apprentices paid 2 Tel 90 Br 4. Insufficient work premises
restaurants, households Birr/day each. Material 11,340 Br
Equipment: All workers without formal Salaries 600 Br Proposals by the owner himself:
Electrical dough machine Marketing: Established and 1. Negotiate with tax authorities for reduced rates
training Taxes 420 Br
(40,000 B), known since 35 years. No Maintenance 100 Br 2. Receive training in management and accounting.
Firewood baking furnace, advertising and has Management: 3.1 Improve product quality, increase variety of products
snapping machine, tray and strategic location along the No business plan 3.2 Open branch shops
shelves main road and has No accounting system 4.1 Lease more space for shop extension.
signboard. No records of cash 4.2 Modernise the baking machines (electrical).
payments
2. Getachew G/Mariam Products/Services: Supply: Leather from Addis Staff: Costs: Problems:
Local and traditional leather factory, plastic Owner with 6th grade; Rent: 6 B/month 1. Lack of appropriate working premises
Shoe maker shoes and sandals soles from Addis, local started his job in 1994. (municipality) 2. Lack of equipment such as a compressor for spraying
Location: Along the main road for men and women, leather from peasants Electricity 5 Br colours, wooden shoe models (m/f) 110 B each,
Selling of imported around B. Dar Management: Water 5 Br electrical and manual sewing machines 7,000 B.
and nearer to a market place No bookkeeping.
Tel. 200498 shoes, Sales/clients: Material 520 Br 3. Lack of training for new models
shoe repairing Households in Bahir Dar Total income 655Br Proposals:
Equipment: 1. Prospect strategic location
1 seaming machine and some visitors
2. Look for credit funding of no less than 5,000 B to buy
1 sewing machine, scissors, Marketing: equipment.
accessories, No advertising but 3. Technical training for models and new techniques.
5 shoe models, all with a low participated at the Expo 98
quality in Bahir Dar. Good location
nearby main road.
3. Axum souvenir and Products: Supply: Producers in Staff: Costs: Problems:
handicraft shop Leather products: Mekele, silver from other Owner (completed 12th Rent: 500 Br 1. High house rent and small shop.
Shop has several branches in (headgear, belts, regions, no shortage grade ) Electricity 15 Br 2. High participating costs at exhibitions and trade fairs.
Mekele, Gondar, Addis and shoes), Clients: Individuals coming 2 family members (grade 3 Tel. 250 Br 3. Lack of training in management and bookkeeping.
Bahir Dar. Wood products: for conferences, tourists, and 10), Transport 200 Br Proposals of the owner himself:
Location: Along Mobil road near (statuettes, middle men. No payment for family Promotion 330 Br 1. Increasing selling price to cover the high costs.
Ethio Star Hotel sculptures, music members for their work Material 1,260 Br 2. Fairs participation with smaller stand and the
instruments) Sales: Seasonal, good Income is not clear, no
Equipment: sales mainly in summer, Management: arrangement of products vertically.
Silver products No planning, real records 3. --
Has Shelves, product (rings, necklaces, few clients, three middle
displaying departments (boxes) men No accounting and record Facilitators remark:
ornaments) keeping system in place
Textile products Marketing: Participates on 1. Higher pricing is not a solution. It is better to improve
(silk, cotton) exhibitions and bazaars, marketing, advertising and sales (refer to action plan).
Ivory has business cards, good 2. No proven lack of record keeping and business
display, quality products management skills
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4. Emebet, Almaz and Aleme, Services: Supply: Working materials Staff: Costs: Problems:
(3 women working together) Men's hair cutting initially came from Addis, Three young women Rent 6.5 Br 1. Shop is old and is exposed to floods and rain
Men s hair dressing with a variety of but are now available in working in partnership, 12th Electricity 60 Br 2. Bad location
styles, Bahir Dar. Spare parts are grade and 10th grade Water 5 Br 3. High monthly payment to the municipality for the
Location: Nearby the main Shaving services. available from local complete. Maintenance 8 Br signboard
road, no signboard, has work Also some services electronic shops. Benefit: income to 4. Cannot afford maintenance costs of some Items.
premises with 30m
2 Skills: Insufficient hair
to women, such as Maintenance by local cutting training for three cover daily 5. Lack of sufficient working capital.
Equipment: make up, hair electronic and welding consumption costs, 6. Insufficient skills training in hair dressing
month by a local barber.
Has hair cutting machines, curling, conditioning workshops. No accounting, (not to be dependent 7. Cultural biases towards women barbers (men
scissors, shaving machine, and colouring Sales: Only 2-3 clients per Insufficient income on their families). hesitating to go to a women barber)
heater, three barber chairs, day, mainly youth and (working only for daily
chairs, table, mirrors, shelves Proposals by the women themselves:
children. consumption) 1. Change the location. Obtain credit.
for cosmetics
Shop was initiated with support Marketing: Good shop Planning: Intends to 2. Upgrade skills training.
of the office of Women Affairs presentation, serving tea, change the business next
telling friends and year and diversify services
neighbours about services. (providing weighing scale
The cost of putting a service) and change
signboard along the main location.
road is found to be costly.
5. Tigist Tefera Product: Supply: Red ash originates Staff: Costs/month: Problems:
Production of an energy saving Firewood from the local Women owner having Rent 100 Br 1. Work place, production and stock at home.
stove conserving stove municipality(260B/truck), completed the 12th grade Water 30-40 Br 2. Shortage of capital to produce in bulk and make more
Tel 206421, Kebele 15 made out of cement Cement is sourced from with training in stove Tel 80-90 Br sales on credit.
blocks. local traders (40 B/sack) production, three female Personal 2 B per piece
Equipment: three form works, Proposals:
Appropriate Sales: individual local food labourers who are paid 2B Transport 10 Br for
cart, plywood, shelves technology per piece. cement, red ash 1. Intervention at the municipality to obtain more land.
producers, bakeries, 2. Credit on convenient terms.
introduced by a hotels. Management: cash book. transport 260 Br
GTZ-project She used to plan her daily
Marketing: Leaflet, small
signboard, sales on credit, activities.
exhibitions, sales on orders
6. Berhanu Jembere Products: Supply: Clay from Addis, Staff: Costs/ month: Problems:
Electric stoves and metal works Electric stoves and angle iron, top plane, Owner with technical Rent 20 Br 1. Fluctuating and arbitrarily set of tax rates
Tel 201004, Kebele 4 metal products such aluminium sheets from school education, 14 years Electricity 200 Br 2. Shortage of capital (no collateral to pledge and obtain
as windows, doors, Bahir Dar of experience Tel. 175 Br credit).
display boxes, grills. Sales: Clients are Three employees with 10th Municipality tax 50 Br
grade and technical know- Income tax 90 Br Proposals:
members of the defence 1. Tax should be on the basis of bookkeeping.
forces, textile factory how attained via on-the-job Personnel 700 Br
training. Work is carried out Net profit 1200Br 2. Credit should be granted without collateral on the
workers. basis of business profitability.
with eye and ear protectors
Marketing: Participates in
exhibitions, consults Management: Bookkeeping
organisations and offices exists
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7. Gettu Andarge Service: Supply: Huda Abdulahi Staff: Cost/month: Problems:
Bicycle maintenance and sales Selling and repairing Yusuf Import and Export Owner, 5th grade, 5 no rent 1. Lack of working premise.
bicycles Company in Addis technicians 5-6th and 12th Electricity 120 Br 2. Insufficient working capital
Location: 270m2 compound, grade, 6 assistants, 1 Transport 770 Br 3. Market competition.
main road, Tel 201064 Sales: Individuals and
institutions found locally guard Material 90532Br
Set of bicycle maintenance Personnel 2150Br Proposals:
tools and in the Tigray region Management: 1. Obtain premise from municipality with the assistance
(Shire, Axum) no planning, no cash book Net profit 4062Br
of ReMSEDA
No specific marketing 2. Secure Loan from a commercial bank.
practice. 3. ----
Products: Supply: Working materials
8. Getahun Abebe, Curtains, shatters, and accessories from Staff: Costs/month: Problems:
Curtain and mat works mats Addis Owner is designer and Rent 400 Br 1. Small shop with high rent
manager, tailor 12th grade Salaries 450 Br 2. Lack of facilities on the part of local authorities, lack of
Location: Small shop on the Sales: Institutions, hotels, plus skills training Electricity 150 Br support from line ministries.
main road, 6m 2 households on cash basis Assistant designer: 250B Transport 420 Br 3. Insufficient knowledge of bidding procedures.
2 Sewing machines, 2 irons, Marketing: Samples 2 tailors (f) 200B Maintenance 60 Br
scissors, table, chairs provided to institutions and 3 for finishing Proposals:
hotels. 1. Applies for premises for shop
Management: Stock control 2. ----
Business cards are being sheet, receipt voucher, Pro
used. 3. ----
forma
9. Damtie Gebeyehu, Products: Supply: wood and metal Staff: Cost/month: Problems:
Household and Office Furniture doors, windows, from local markets. Has Owner has 8 years of Rent: own working 1. No accounting system is being applied.
Location: 600 m2 open grills, shelves some stock of metal and experience place, show room 2. Workers and apprentices are not properly trained.
compound on the main road, cabinets and wood wood 30-40 workers, 5 of them belongs to the family 3. Bad working conditions in woodworking department
including show rooms products such as Sales: individual clients female. Salaries 200, 600- Elect. 200-600 Br (dust and noise).
beds, doors, and offices, by order and 1,000. Tel. 500-700 Br
Equipment/tools: Proposals:
windows, furniture, on the spot. Management: Salaries 10,000 Br
7-operating-machines, saws, shelves Tax 1,000-1,250 Br 1. Hire bookkeeper
cutters, 4 welding machines, Marketing: 5 show rooms No accounting system 2. Technical training for workers and apprentices.
Maintenance 4,000 Br
3 grinders. on the main road 3. Intention is to acquire a production area outside of
town and to keep the show room downtown.
10. Alemtsehay G/Medihin Products/Service Supply: Cosmetics and car Staff: Owner and one Cost/month: Problems:
Decoration work Sale of flowers and decorating items are from female lady worker Rent: 200Br 1. Lack of work premises
cosmetics suppliers in Addis. Electricity: 150Br 2. High and accumulated tax rate
Location: Kebele 06
Car decorations 3. Market problem
Equipment:
1 Sales counting machine and Proposals:
4 shelves 1. Look for additional space to rent
2. Lobby for reduced tax rates and the postponement of
differed amount
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b. Action-planning
With the help of a situation analysis overview, the facilitator documents the situation and
problems of up to 15 businesses and transfers it into a five-month action plan:
First five month action plan of......................................................
Name / Activity Problems identified Proposal for action

by the owner himself Self-help initiative Additional support by
of the business owner the BDS provider
Business 1
Business 2
The proposed actions agreed upon with the concerned businesses should be implemented to
solve the identified problems in the five-month BDS cycle. Actions that can be taken by the
business owner and the facilitator themselves may be implemented without external support.
For other support services BDS-providers need to be identified and contacted by the
business. General information services are provided to the business free of charge, but
interventions, such as business planning and the drawing up of loan applications are
provided against payment.
The following action plan includes 10 businesses with their necessary self-help actions as
well as the additional support of the facilitator or BDS provider, in line with the main problems
mentioned in the second column.
Self-help and support activities are not always complex, however, are decisive, if the actions
are realised in order to solve identified problems. Activities in the following example have
been identified in the intervention fields as depicted in the action plan below:
Representation of interests (intervention with regard to municipalities and other
authorities for premises, taxes, tenders and bids as well as in administrative
concerns);
Technical and vocational training;
Accounting and management training or simple cash book application;
Financial intermediation, such as taking loan application measures and encouraging
savings;
Marketing activities such as advertising, brochure publication, photo documentation
and information on tenders and bid procedures;
Information on suppliers of equipment, tools and working materials.
The self-help action of the business operator and the additional support by the facilitator or
other BDS-providers will be agreed upon between the business and the facilitator. In the next
five months, each facilitator will have to implement the action plan and solve the identified
problems. By making contacts with BDS-providers and technical training centres, the
facilitator would help to solve those problems that are beyond his/her own capacity. After the
BDS cycle, one month is allotted for the evaluation of the previous intervention and for the
preparation of the next five-month cycle.
Please refer to the example of an action plan on the next page
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Action plan for Business Development Services (example of Bahir Dar 7/2002)
Name / Activity Problem identified Proposals for action

by the owner himself
Self-help initiative of the business operator Additional support by the BDS provider
1. Haji Adgoi 1. Over taxation 1. Negotiate with the tax authorities. 1. Assist the owner in discussions with tax authorities
Baker 2. Lack of management and accounting 2. Participate in training of management and accounting. 2.1 Assist in implementation of accounting system.
3. Marketing problem 3.1 Open new sales shops. 2.2 CEFE training according to his market plan.
4. Insufficient size of work premises 3.2 Improve product variety and quality. 3. Carry out a follow-up and provide advice on market
3.3 Look for skilled manpower. problems.
3.4 Buy electrical stove. 4. Assist the owner to negotiate with the administration
4. Lease more land.
2. Getachew G/Mariam 1. Lack of appropriate working premises 1. Improve the working shop to attract more customers 1. Assist the owner to improve his shop by contacting
Shoe maker 2. Lack of equipment such as (shelves, signboards etc.) carpenters and providing advice on design.
compressor for spraying colours, 2.1 Save money and open a savings account 2.1 Encourage the owner to save money
wooden shoe models (m/f) 110 B 2.2 Calculate the amount of funds required for raw 2.2 Get in contact with a credit institution, attain loan
each, electrical and manual sewing materials and tools, carry out priorities, contact the procedures and assist him in the filling out of loan
machines 7,000 B. finance institution, fill out the loan application form and application forms
3. Lack of training on how to develop new secure funding 2.3 Identify suppliers of tools/machines and provide
models. 2.3 Buy the necessary tools according to the set priority information on prices.
3. Look for training facilities in new models and use of 3. Identify and contact training centres or private
tools/equipment. trainers and link the owner to them.
3. Axum souvenir and 1. High house rent costs and small shop 1. Change location with an affordable rent 1.1 Assist the owner in the search for a strategic
handicraft shop 2. High participating costs for exhibitions 2.1 Publish and distribute posters and brochures to hotels, location
and trade fairs offices, conferences and the airport. 1.2 Provide information on the printing of posters and
3. Lack of training in management and 2.2 Prepare photos and texts to be placed on the brochures
bookkeeping. WebPages of Ethiopian BDS network 2.1 Look for trade fair promotion agencies specific to
2.3 Contact trade fairs and exhibition promotion agencies small-scale businesses
and negotiate a reduction in their participation fees 2.2 Provide information with respect to advertising on
2.4 Develop own tourist guides to bring tourists to shop TV, radio or in local newspapers
2.5 Sell products via street vendors 3. Organise business management training.
2.6 Look for funds to advertise products on media
3. Acquire business management training .
4. Emebet, Almaz and Aleme 1. Shop is old and is vulnerable to rain 1. ---- 1. ----
Men hair dressing 2. Bad location 2. Apply to the municipality for other opportunities of 2. Assist in contacting the municipality and others for
3. High monthly payment to the securing an appropriate location the sourcing of an appropriate location
municipality for the signboard 3. Dealing with the municipality, Women Affairs and 3. Negotiate a tax-free sign board advertisement with
4. Cannot afford maintenance costs of others with regard to the financing of signboard the municipality
some Items advertising 4. ----
5. Lack of sufficient working capital. 4. ---- 5. ----
6. Insufficient skills training in hair 5. ---- 6. Identify public or private training institutions and link
dressing 6. Look for training opportunities in men and women the business to them
7. Cultural biases (men hesitating to go hairdressing 7. Advise the owner to have separate saloons for men
to a woman hairdresser) 7. Also engage in women hairdressing. and women hair dressing.
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5. Tigist Tefera 1. Work place, production, sales and 1.1 Apply to the local municipality for a better location 1. Negotiate with municipality for premises
Production of energy stock at home 1.2 Set up a shelter for product exhibition. 1.2 ----
saving stoves 2. Shortage of capital for bulk production 1.3 Contact office and project employees to buy her 1.3 Help the owner to produce leaflets
and to make more sales via credit. products with an improved leaflet 1.4 Help the owner to make a photo documentation
1.4 Advertising her products outside Bahir Dar by means 1.5 ----
of photo documentation 1.6 ----
1.5 Contact individuals by telephone and personally 2. Make contact with a micro-finance institution, obtain
1.6 Participate in bazaars and exhibitions procedures and loan formats and assist in the filling
2. Apply for credit on convenient terms, in order to out of loan application forms.
produce on stock and to sell on credit.
6. Berhanu Jembere 1. Fluctuating and arbitrarily set of tax 1.1 Improve cash book and keep separate records of 1.1 Acquire information from the tax authorities with
Electric stoves rates. income and expenditure to show to tax authorities regard to accounting requirements and assist with
and metal works 2. Shortage of working capital, due to the 1.2 Negotiate with tax authorities to be charged on the the bookkeeping system
lack of collateral. basis of the above records 1.2 Provide assistance in negotiations with tax
2.1 Draw up a business plan authorities at a reasonable charge
2.2 Open a savings account 2.1 Assist owners in business planning
2.3 Negotiate with banks to obtain credit on the basis of 2.2 Advise the owner to open a savings account and
good business performance, instead of physical improve savings
collateral 2.3 Establish contact with banks, obtain loan procedures
2.4 Improve workshop presentation. and loan application forms, assist in filling them out
2.4 Assist in negotiations with banks, invite bank
officials to visit the business
2.5 Provide advice on workshop organisation.
7. Gettu Andarge 1. Lack of working premise 1. Identify an appropriate location from the municipality or 1. Facilitate the acquisition of land from the munici-
Bicycle maintenance 2. Insufficient working capital private land lords pality or from private individuals using brokers
and sales 3. Stiff market competition. 2.1 Improve savings 2.1 Encourage more savings
2.2 Make contact with banks for the extension of credit. 2.2 Make contacts to banks, acquire loan application
2.3 Install a bookkeeping system that is in line with the forms and assist in the filling out of the loan
requirements of credit institutions. application forms.
3. ---- 2.3 Assist in the implementation of a standardised
record keeping system.
8. Getahun Abebe, 1. Small shop with a high rental rate 1. Solicit better premises from private individuals or apply 1. Advise on a selection of cost effective and
Curtain and mat works 2. Lack of promotional support on the to the government for a plot of land appropriate rental houses
part of line ministries 2.1 Establish good personal contact with influential 2.1 Assist in the enhancement of negotiation capacity
3. Insufficient knowledge of bidding officials upon talking to officials
procedures 2.2 Invite promotional institutions to visit the work 2.2 Provide advice on the analysis of production
premises capacity, sales situation and opportunities
3.1 Solicit information on bid procedures 3.1 Assist in photo documentation and leaflets.
3.2 Try to meet the necessary bid requirements 3.2 Provide information on tender procedures
3.3 Inform the Chamber of Commerce to assist in the 3.3 Organise a workshop on "How to win tenders", in
bidding process collaboration with the local Chamber of Commerce
3.4 Try to obtain all the information necessary to win bids. and other resource persons.
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9. Damtie Gebeyehu, 1. No accounting system is being applied 1. Hire a skilled person for bookkeeping purposes and to 1. Assist in the selection of a bookkeeper
Household and Office 2. Workers and apprentices are not assist in its implementation. 2. Identify training centres and trainers and link training
Furniture production properly trained 2. Look for training to enhance the skills of workers and for workers and apprenticeship programmes.
3. Bad working conditions in the apprentices 3. Assist in improving working conditions by providing
woodworking department (dust and 3. Improve the working conditions of workers. information on safety procedures.
noise).
10. Alemtsehay G/Medihin 1. Lack of work premises 1. Look for a rented house with an affordable rent 1. Provide advice to the owner on selecting a premises
Decoration work 2. High and accumulated tax rate 2. Contact Bahir Dar Chamber of Commerce to lobby for with a good location
3. Market problem tax rate reduction and extension of payment of over 2. Bring all owners with similar tax problems together
due tax and create a forum, where the owners, the chamber
3. Add more service outlets and tax authorities discuss the problem.
3. Assist the business owner on how to make market
assessments before opening other sales outlets.
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c. Delivery (Implementation process)
Before getting involved in business service delivery by means of the above-mentioned
methodology, a group of facilitators who are working in MSME development and self-help
institutions, have to undergo training on "Demand-Driven Needs Assessment and BDS
Delivery Methodology". In doing so, each facilitator will have to be provided with a to-do-list
as well as the appropriate planning and reporting formats. Each facilitator then identifies 15
businesses of different sizes and various sub-sectors for the situation analysis, action-
planning and business service delivery that takes up to 6 months. The first month is normally
used for carrying out the situation analysis and action-planning. The remaining five months
are reserved for action-oriented problem-solving interventions. An annual impact assessment
carried out with the help of an external M+E consultant is recommended, in order to measure
the impact of the intervention on a sample of enterprises.
1.5 Strengths of a participatory BDS facilitation approach

The major strength of this approach is that it involves the business owner in problem
identification and action-planning. It addresses problems specific to each enterprise or cross-
cutting problems among a group of enterprises and/or sub-sectors. Offer-oriented service
delivery methods often prescribe blanket treatment, such as the provision of training whether
needed or not, such as finance or new technology, whether it is the underlying problem or
not. With this approach however, the business owners become the main actors and the
support is only additional in nature.
When certain services develop a substantial demand and the ability of enterprises to pay for
it grows. Consequently, the provision of such services would be left to commercial providers
and accordingly, the transaction becomes business-to-business. Therefore, a participatory
approach is more demand-oriented and can easily spill over into a process of commercial
market development.
In the process of facilitating demand-driven services, policy makers can also benefit from
new knowledge of identified hurdles connected to the respective rules and regulations. With
the information derived from the operational level (implementing agencies etc.), the
government can subsequently revisit its private sector development policies and revise
certain rules and regulations.
1.6 Developing a commercial BDS market

BDS markets in developing countries are mostly underdeveloped, and this is a result of an
insufficient articulation of demand on the part of MSEs as well as weaknesses in supply.
MSEs are mostly not convinced of the impact these services have on their businesses. They
are at times unaware of BDS availability, with many being unable or unwilling to pay for
existing services. On the other hand, BDS providers mostly offer supply-driven services or
services that are unaffordable for MSEs.
Therefore, in many countries there is a need for intervention to stimulate BDS market
development. That means the subsidised element of the intervention needs to be of
temporary nature and only support BDS transactions until the market for BDS operates alone
with the help of market forces. The main aim of running subsidised BDS programmes is not
to encourage MSE support institutions to engage in direct service provision, but rather to
develop a market for BDS by facilitating business-to-business linkages between the demand
side represented by the businesses and the supply side represented by BDS providers.
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In order to do so, it is necessary to understand the existing supply of BDS from the private
sector and to develop regular communication with the respective BDS providers. Developing
a BDS market according to our approach includes:
Training the staff of BDS facilitating agencies and providers in demand-oriented
needs assessment and BDS delivery;
Providing technical and entrepreneurship training to BDS providers;
Involving private commercial BDS providers in the provision of BDS, wherever
possible;
Avoiding services delivery free of charge and targeting paid services on a cost
sharing or cost recovery basis;
Encouraging the implementation of an organised BDS system, if BDS activities
are not fully developed.
To distinguish between services free of charge and those with charge is not always
easy. The EBDSN felt that there is no theoretical criterion that can be applied to all
situations, moreover, the decision must be pragmatic and fit the situation and the
objective of further market development. Some examples in the context of Ethiopia are
as follows:
Providing a business plan format to an entrepreneur should be free of charge
because it can be carried out at a very low cost and comprises more general
information. However, assistance in drawing up the business plan for a loan
application should be paid for, as this involves considerable costs and
represents a very specific service in itself and for the entrepreneur.
Similarly, the handing out and introduction of a simple cash book format can
also be free of charge. However, for the implementation of a more complex
accounting system, it is recommended that the business owner be linked to a
professional accountant, especially to be able to purchase a BDS according to
his specific needs.
Information on tender, expositions and trade fairs may also be rendered at no
cost, as it is a more general service and would also be hard to sell in Ethiopia.
However, helping the business to participate in the market, e.g. writing a bid
offer, is a service that should be paid for and provided for by professional
consultants.
In a similar way the provision of necessary information on financial
intermediation and loan application forms can likewise be free of charge.
However, aid to the business owner in filling out the loan application form and
providing him with the necessary documents is a service for which there should
be a price tag.
Publications providing information of the business environment, such as
taxation, marketing, accounting, cost calculation, export and tender procedures
have been introduced in Ethiopia as a commercial service to be paid for. This is
possible, because the individual price of the publication as compared to the
benefits thereof is low for the entrepreneur. At the same time it would not only
be costly to distribute them free of charge, but would also be a waist of
resources, as many only take the publication because it is for free, to then
subsequently throw it away without reading.
Some technical or commercial on-the-spot advice may be free of charge,
because it can serve as an incentive for BDS demand, and because provisional
costs are comparatively low. However, technical and entrepreneurship training
15
is to be organised on a cost sharing or cost recovery basis, and in most cases
organised by specialised training providers;
Outlook: A gradual approach towards BDS market development
As in other fields the theory of BDS market development is often more rigorous than the
practice. This led the EBDSN to develop a gradual approach towards BDS market
development.
As a first step which has already been achieved, BDS had to be introduced in Ethiopia as
a topic and in action. Many MSEs in Ethiopia have heard of BDS now and have come into
contact with BDS facilitators who emphasize the point that purchasing services may
strengthen the profitability of the business. A large number of business operators got
used to the idea that they have to pay for valuable information and purchased the BDS
booklets published by the EBDSN.
Nevertheless, it is still a long way to go to long-term sustainability and a fully commercial

market for most BDS. Today (subsidised) BDS facilitators do not only facilitate BDS, but
do often provide BDS as well. This is contradictory to the pure theory, but proved to be
a practical approach which brought tangible results. Now, it will be important to keep
working on BDS market development, to keep pushing into the right direction. Only the
future will show if the BDS facilitators trained by the EBDSN can develop into commercial
BDS providers or if existing commercial providers take over and the facilitators can
concentrate on linking MSEs and BDS providers and other facilitating activities. For some
types of BDS this may never be achieved and public institutions will have their role to play
for a long time.
But, what is needed today is a continuous joint effort of stakeholders in MSE promotion
not only to continue to discuss the right approach towards development, but also to
continue being action-oriented and try it out while keeping the strategic and long-term
BDS market development objectives always in mind.
1.7 Costs of BDS implementation

Planning a BDS intervention also calls for the allocation of personal and financial resources.
The Demand-driven Needs Assessment and Business Services Delivery method involves the
training of facilitators by an experienced expert in the field. Follow-up efforts and support to
facilitators is also essential. A minimum of one or two facilitators are to be engaged on a full-
time basis, so as to have enough time at hand to pay visits to businesses, prepare action-
planning and implement support via linkages to BDS providers. It is imperative that the
necessary resources for staff, such as transport, office equipment, monitoring and evaluation
are assured. Annex 10 provides an overview on different cost categories that generally have
to be taken into consideration.
1.8 Business Development Services for medium and large enterprises

(please refer to the situation analysis and action plan of CBE, as presented in annex 5)
While most BDS experiences gathered in the context of Ethiopia have been made with micro
and small enterprises, the experience with the Commercial Bank of Ethiopia (CBE) in 2003
shows that the above-mentioned BDS approach can be applied, not only for micro and small
enterprises, but also for medium and large enterprises.
16
In order to implement counselling services to the customers of the Commercial Bank of
Ethiopia (CBE), a five-day BDS workshop focussing on the needs assessment of
businesses, action-planning and counselling was organised by the Commercial Bank of
Ethiopia (CBE) and the MSE Project in October 2003. The objective of the workshop was to
transfer BDS knowledge to the bank, in order to assist credit beneficiaries with repayment
problems. By acquiring knowledge of counselling through the proposed training, the bank is
expected to reap the following benefits:
Equip the CBE customers with the appropriate business skills that are aimed at
helping them improve their repayment capacity. The CBE is working in a
traditional business community that runs its businesses without modern
business skills. Obviously, one of the major reasons for the failure of the
business community in honouring its debt repayments can be attributed to the
absence of appropriate business skills involved in effectively running its
business operations. Accordingly, the provision of counselling is assumed to
bridge this gap.
Pave the way towards introducing counselling services as a new product line,
whilst diversifying the prevailing product portfolio. Today commercial banks are
engaged in providing a wide range of other special services that are non-credit
activities. To this effect, CBE could render counselling as a new line of service
delivery and diversify its existing product portfolio.
The CBE situation analysis and action plan shown in annex 5 include seven companies, their
necessary self-help actions and the additional support of the facilitator/BDS officer or BDS
providers, according to the main problems mentioned in the second column.
Self-help and support activities do not have to be complex, but they have to fit the nature of
the problems to be solved simple problems can often be solved with simple - but targeted -
activities. According to the CBE situation analysis, the following activities have been
identified:
Reassessment of financial facilities (re-scheduling repayment rates and grace
periods);
Business management: improve the accounting system, staff management,
business planning and documentation for administration procedures such as
export and taxation proceedings;
Marketing: advertising, diversify product range, look for strategic location;
Counterfeiting of spare parts by competitors, payment delays of sales on credit;
Monopolies in the distribution of goods and transport for import-export;
Taxation procedures such as preferences for investment activities and import of
raw materials to local production;
Technical skills training for employees.
The CBE counsellors themselves may provide some support, but some of the needed
support must come through the intervention of professional BDS providers and other
facilitating agencies and partners such as the Chambers of Commerce, Ethiopian Investment
Commission, Import and Export Agency, vocational training centres and private consultancy
companies. In the case of the CBE, some funds have to be set aside, as a certain
percentage of the credit disbursed for non-financial services such as BDS.
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1.9 Achievements and impact of the Ethiopian BDS Network
Most relevant in the given context are the Ethiopian BDS Network's achievements with
regard to Business Development Services (BDS): Through the BDS programme initiated by
the MSE project, a total of more than 9 400 businesses in Ethiopia have received services in
the last two 6-months BDS cvycles of 2004/05.
78% of the initial planning of support actions have been achieved.
39% of the businesses involved are trade, 35% manufacturing enterprises and
26% services.
51% of the business owners are female, 46% are male and 3% work in partnership.
Most of services have been management and accounting (28%), finance facilitation
(21%), marketing services (17%), access to premises (10%), entrepreneurship
training (8%) and support for administrative procedures including tax problems and
business registration (7%).
36 unemployed TVET graduates have been supported for business creation in three
enterprises. They got business license, premises, loans, equipments and markets.
Actually they obtained markets by their own efforts and are on a good way for
sustainability.
In the 1st BDS cycle 127 business operators have been supported, in the 2nd BDS
cycle 698 businesses (+450%), in the 3rd BDS cycle 1 088 business (+56%) and in
the 4th BDS cycle 4 783 businesses (+440%).
Number of Businesses supported

6000
5000 4 783
4000
3000
2000
1 088
698
1000
127
0
1st BDS cycle 2nd BDS cycle 3rd BDS cycle 4th BDS cycle
The impact of BDS services, such as training, counselling, information delivery, marketing
support, linking to service providers, such as financing institutions, etc., is that 80% of the
business owners of the sample study confirmed to have improved their working conditions in
terms of product diversification (27%), increased turnover (67%), improved and secured
premises (33%), increased income (51%) and increased employment (27%).
Since our BDS approach has induced MSE support institutions from our 3 project regions, i.e.
Tigray, Amhara and Addis Ababa, FeMSEDA (Federal Micro and Small Enterprises
Development Agency) is actively involved in delivering BDS training and following subsequent
activities in those regions not covered by our programme. Such regions include the Southern
Region, Oromia, Dire Dawa and Gambella. As a result of this dissemination strategy, our
BDS approach has now been adopted across the entire country and is accepted by the
respective federal and regional Ministries and Agencies. Also other donors such as ILO and
EU are convinced of the effectiveness of our practical BDS approach and have contributed to
its dissemination.
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Other achievements of EBDSN related to BDS were:
CEFE entrepreneurship training:

In the last project phase from 2001-2005, 323 participants have taken Training of Trainers.
56 trainers have taken coaching and upgrading support.
2 944 start-ups (47% female, 53% male) have been trained.
13 048 exisiting businesses (61% female, 39% male) have taken training.
The sample impact study proved by interviews of former participants that 63% of start-ups
have created their enterprise. 86% of the existing businesses confirmed to have solved their
marketing problems.
Networking and Learning Platforms: The project has initiated networks of MSE support
institutions both at regional and national levels. The network initiation is aimed at streamlining
coordination, experience and information exchange, advocacy and joint activities by the
different stakeholders involved in the development of the MSE sector. The network can be
seen as a platform for a sustainable public-private partnership. An assessment with regard to
the usage of the national network forum was carried out during the 5th National Network
meeting in June 2003, in which 28 network members from government, private, non-
government organisations and donor programmes were present. Of the surveyed 28 network
members, 93 % responded that the network forum has enabled them to provide better
services to their MSE clients.
The network forum has also played a pivotal role in the areas of advocacy to the sector. As a
result, the government has currently accorded greater priority to MSE promotion next to
agriculture. The impact of advocacy by means of the network is also shown in the fact that the
administration of the city of Addis Ababa decentralised the ReMSEDA to sub-city and Kebele
(lowest administrative stratum) levels, so that BDS facilitators can work in close proximity and
keep frequent contact with MSE operators.
A BDS Internet portal has been created under www.bds-ethiopia.net - learning platform for
the BDS network members and international agencies. The BDS portal provides information
on taxation, marketing, export-import, accounting and cost calculation, business planning,
association building as well as on BDS strategies, networking and lessons learnt.
A monthly e-mail based BDS newsletter is sent since May 2005 to more than 300 addres-
sees and found a lot of words of encouragement.
Capacity Building of Partner Organizations: As per the impact study carried out in the
aforementioned period, five out of the surveyed seven Partner Institutions (POs) have
responded that the use of our instruments for organisational development has significantly
increased their capacity of discharging their MSE promotional activities, such as the delivery
of BDS to businesses. This implies that there is a 71% success rate in the area of
organisational development. As it stands now, there are more POs using our instruments for
organisational development. Presently, 17 MSE support institutions within the partner regions
are applying our method, as compared to only seven institutions during the period of time in
which the previous impact study was carried out.
Continuous follow-up to improve the management procedures, effective planning and
reporting and documentation has been made by the project staff.
A checklist for organizational development has been introduced.
The Chambers of Commerce have been supported for the publishing of their
webpages www.ethiopianchamber.com and www.adamachamber.com. The
webpages generate income by advertizing companies and give business information
services on taxation, business registration and arbitration.
19
The project's BDS information booklets have been re-printed by the chambers and are
on sale for own profit. Some booklets have been translated in Amharic.
About 20 heads of Partner Organisations (ReMSEDAs, Sub-cities) have been
introduced to the BDS approach in a one day workshop and help us to multiply our
BDS efforts.
Women Entrepreneurs Associations are bringing about changes to their members
through BDS delivery and concerted advocacy efforts. The Amhara Women
Entrepreneurs Association (AWEA) can be cited as one that implemented our BDS
approach and attracted more members after providing services. It also captured the
attention of other donors, such as ILO, USAID, SIDA who started to provide some
support in terms of budget and equipment.
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1.10 Ten BDS-Success stories
Production of hollow-blocs
Problem:
Construction graduate without a job;
No start-up capital;
No working premises.
Support provided for by the BDS facilitator:

Municipality provided land for production;
A link to micro-finance was made and the graduate got credit;
A link to the Selam technical centre was made, in order to buy a hollow-bloc machine;
Entrepreneurship training provided;
Market-link to the municipality for the sales of blocs for public toilets as well as other
opportunities;
Minimising costs by using waste water from the hill.
Impact:
Owner became self-employed;
12 workers were employed;
Due to low production costs, good quality and marketing support, income is good.
21
Car wash cooperative, Mercato area, Addis Ababa
Problems:
12 unemployed 12th grade finished students looking for job;
No business idea;
No working premises.
Support provided for by BDS facilitator:

Supported business idea generation;
Organised the 12 unemployed into a cooperative;
Municipality provided premises and cleaned space;
They were linked to micro-finance and received credit;
They were linked to suppliers, in order to buy equipment and build premises;
Provided assistance in opening a car wash and a shop for oil and other accessories;
Record keeping procedures and skills were provided for.
Impact:
12 cooperative members employed.
22
Food processing women cooperative, Mercato - Addis Ababa
Problem:
22 women without regular jobs;
No premises.

Organised them into a cooperative;
Municipality provided space for production;
They were linked to micro-finance and received credit;
Shop was built by the women;
Savings were encouraged and equipment for weddings and events were organised;
Market link to public institutions, such as Kebeles, sub-city agriculture office for sales.
Impact:
22 women employed with regular wages;
Based on sales and savings, business is to be extended and more workers will be
employed;
Assets have grown (facilities for cooking and food/beverage services).
23
Municipal garbage collection
Problems:
137 unemployed youth (90% women);
Cleaning jobs despised;
Cleaning services in short supply;
Lack of start-up capital and accordingly working facilities.

Organised the 137 youth into two groups of cooperatives;
Raised the awareness of the youth to accept cleaning jobs as any other jobs;
Credit facilitated by linking them to a micro-finance institution;
Linked to 1,200 households for marketing the cleaning services.
Impact:
137 jobs secured with regular income;
Residents of Addis Ketema receiving cleaning services;
1,200 clients are paying 3-20 Birr/month each for the service to the cleaning
cooperatives;
Members want to expand their activity with heavy duty transport facilities.
24
Oil Mill, Gonder
Problems:
Tax burden during plant commissioning;
Short maturity of loan from bank;
Premises.

Assisted in tax relief worth 16,000 Birr;
Helped the transfer to another bank with longer repayment periods;
Changed the business site on advice of the facilitator.
Impact:
Tax relief resulted in more savings;
Managed to hold increased raw materials stock at lower prices, as repayment
is of long maturity;
Managed to increase production, and in doing so, sales and income.
25
Food and spices, Bahir Dar
Problems:
Market problems due to overpricing, unattractive product presentation, poor
packaging and small product range;
Overspending and the mixing of business income with income from other sources,
due to the absence of records.

Facilitated the participation in trade fairs for purposes of networking, gaining
experience and market promotion;
Business owner was coached on keeping records, pricing, product diversification,
shop organisation and advertising.
Impact
Expanded product range by including spices and other processed food items;
More customers, better sales and accordingly more income secured after the BDS
intervention.
26
Metal works, Bahir Dar
Problems:
Poor business management;
Lack of record keeping skills;
Over taxation.

Assistance in the attendance of business management training;
Provision of record keeping formats and on-the spot training;
Organisation in an association for advocacy regarding tax and other policy
related problems.
Impact:
Reorganisation of the enterprise based on the knowledge secured from three
training sessions organised on behalf of the facilitator;
Due to increased profits attributed to improved business management know-how,
three more workers were employed and new equipment was bought.
27
Video, audio and computer service provider, Mekele
Problems:
Limited skills in business management;
No savings;
Poor business location;
Insufficient working capital.

On-the-spot counselling and linkage to training providers for business management;
Supported a change of the business site;
Encouraged the opening of a savings account;
Facilitated access to loan.
Impact:
Business diversified;
Savings increased;
Created employment for one person;
Business assets increased by Birr 12,000.
28
Metal works, Gonder
Problems:
Lack of finance;
Lack of appropriate premises;
Poor market.

Facilitated access to credit;
Changed business site on facilitator s advice;
Assisted in winning tenders.
Impact:
Expanded business;
Employed three more workers;
Increased income.
29
Wood and metal worker, Adigrat
Problems:
Limited skills in business management;
Limited skills in metal and wood works;
Limited skills in product diversification;
Insufficient working capital;

Business training and on-the-spot counselling;
Access to technical training;
Access to credit;
Impact:
Income improved;
New product added;
New tools/equipment purchased;
Created employment for six people.
30
2. Training Workshop on BDS Implementation
2.1 Action-oriented training methodology

The workshop programme is based on a mixture of theory and practice as well as on
learning-by-doing. The participants are trained for their future function as facilitators for BDS,
both providing basic support to MSEs on their own and facilitating the intervention of
commercial and non-commercial BDS providers as well as other agencies. After a general
introduction to participatory demand-driven BDS, participants have to be prepared for paying
visits to businesses and carrying out discussions of their situations, main problems and
proposals for solutions. After the field experience, participants write down the situation
analysis overview of 10-15 local micro and small enterprises and transform it into a five-
month action plan. Practical issues regarding interview techniques, the selection of
businesses and documentation of results have to be discussed. After the business operators'
needs assessment and action-planning, participants in working groups list commercial BDS
providers, NGOs, vocational training centres, micro-finance institutions and facilitating
agencies within their regions. These institutions and organisations should further be involved
in the implementation of Business Development Services. The last day of the workshop has
to be reserved for discussions on the topic "Improve Your own Structure (IYS)". Participants
will be introduced to developing their own organisation, to improve its presentation, planning,
documentation, evaluation and services to businesses.
2.2 Capacity building on the demand-driven BDS approach
2.2.1 Introduction by means of photo documentation and PowerPoint presentation

The introduction to the BDS approach should be illustrative and has to include examples and
photos and not be too theoretical which simply bores most participants. Therefore, you
should start with a photo presentation of BDS case studies. These case studies illustrate our
approach of demand-driven situations and problem analysis, action-planning and
implementation (refer to examples in chapter 1.10 and in annex 3). As an alternative the
experiences made by the trainers themselves may be presented by way of photo
documentation or a short field visit to 3 businesses in the morning of the first workshop day.
After the photo-based introduction, a general reflection on the demand-driven needs

assessment and BDS delivery method may be necessary. For that purpose, trainers can use
the already prepared PowerPoint Presentation on demand-driven BDS (refer to references
and annex 4). If a beamer is not available, this presentation may be printed out and copied
for every participant before the workshop starts (print out annex 4). The PowerPoint
introduction provides an overview on the following topics:
How to put BDS into practice?
Permanent dialogue with MSE operators.
How to talk to MSE operators?
Interview guidelines (issues to be covered in the interview)
What is behind the problem of "lack of finance"?
Situation analysis overview.
Action-planning.
Types of services to be provided.
Training courses or on-the-spot advice?
Examples for on-the-spot advice.
Steps for the development of MSE self-help organisations.
Market orientation of Business Development Services.
31
Examples of paid Business Development Services.
The Business Services delivery cycle.
Implement the 5-month BDS cycle.
Report on 5 months of BDS delivery.
The participatory demand-driven BDS approach is based on the following principles:

The business operator is the main actor; BDS facilitators activities are only
complementary to the self-help action of the operator.
Demand-driven BDS are based on a regular dialogue. Questions must be
asked in an open manner without leading the interviewee with leading questions
to those answers and proposals that are already expected by the interviewer.
Only then are the identified BDS strictly based on the operator s demand.
Encourage the operator to express his problems and proposals.
BDS should be market-oriented with at least cost sharing and cost recovery
arrangements at the initial stages. When the BDS market is further developed
they should be transacted on the market, as is the case with any physical
commodity or service.
The implementation steps involve:
Selection of businesses:
As already explained under chapter 1.4, the selection of businesses is not based on narrow
criteria, but depends on the fields of intervention, priorities and services provided by the
concerned agencies. Practical criteria aimed at making the work more efficient for the
involved facilitators may also play an important role (details/examples refer to chapter 1.4).
Regular visits to businesses

After the selection, businesses should be regularly visited; your concern should be
communicated to business operators and regular discussions with respect to their situation
and main problems should be held. Discussions should be held without posing leading
questions and in a relaxed atmosphere. The business operator should be encouraged to
identify his main problems and provide proposals for their solutions by himself. That means
that the facilitator at the initial steps keeps his observations and opinions to himself, and
communicates them to the MSE operator only at a later stage. This enables him to capture a
non-influenced opinion of the business operator.
Situation analysis and action-planning

After the visits and discussions to business operators, the facilitator should document the
data and results in a situation analysis overview. Allocating 15 businesses for each facilitator
for a six-month BDS cycle is recommended. Problems and proposals of businesses should
be sufficiently detailed to formulate concrete ideas with regard to actions to be undertaken
and services to be provided. The phrase, "Needs technical training" is too general: What are
the main technical problems in his activity? What are the prior issues that need to be
addressed? A good and detailed example of this could be: "Shoe maker needs new wood
models for new shoe models and the respective training for this new model."
After the situation analysis, we transform problems and solutions to the action-planning
matrix and into the columns "Self-help action of the operator himself" and "Additional support
by the BDS provider or facilitator". This action-planning matrix should present the joint
consensus-based findings of the BDS facilitator and the business operators.
32
Implementation of Business Services Delivery
Once the action-planning is finalised, the implementation phase starts. The facilitator himself
can provide simple advisory services, such as introducing a cashbook, providing information
on access procedures to credit or providing relevant market information. For other, more
complex services such as technical and vocational training, management training or the
development of an advanced accounting system it needs to link the businesses to
commercial BDS providers, vocational and technical training centres, NGOs or facilitating
agencies. The necessary interaction with the municipality, to authorise for example the
allocation of a working premise; or with financial institutions or other authorities to obtain
other services should be undertaken by the business operator himself. The facilitator may
accompany the business operator to these interactions. Problems that are common for many
businesses can be discussed in entrepreneurs meetings, which can eventually evolve into
business networks or associations.
Evaluation and documentation

The M+E system on the facilitator's level should not be too complex. A complex and more
organised M+E system should be reserved for larger development projects and organisations
that have the required resources and experience.
The minimum the facilitator should do is to record the services to be implemented. For this
type of activity monitoring, we recommend that a report covering the five-month BDS cycle is
drawn up. Periodical 6-monthly meetings with some of the businesses involved can be
organised by the facilitating agencies. These meetings help to monitor the impact on a higher
and aggregated level: The implementation of the complete BDS programme can be
assessed using a simple SWOT analysis (strengths, weaknesses, opportunities, threats) and
group discussions.
Communication and Visualisation

Communication: All documents (situation analysis overview, action-planning, reports, and
statistics) should be kept for further distribution to your colleagues and for publishing on the
Network webpage, in order to share experiences. Yearly meetings of all actors concerned
may also be useful for sharing experiences.
Visualisation: Overviews, planning and performance results, success stories with business
pictures should be posted on a notice board in your office, in order to visualise and provide
visitors with an immediate idea of your work.
2.2.2 Introducing situation analysis and action-planning

After the general introduction, a question and answer discussion should be initiated to instil
concept clarity among participants. The situation analysis and action-planning should then be
discussed in detail. The Bahir Dar situation analysis and action-planning (refer to 1.9) may
serve as an illustrative example for MSEs. If you target medium-scale enterprises, take the
situation analysis and action plan of the Commercial Bank of Ethiopia as an example (refer to
annex 5). With the help of these documents, participants will receive a very concrete idea of
what is meant by a situation analysis.
The situation analysis formats used in the MSE Project are suitable to cater for 10 to 15
enterprises. The participants structure the analysis into columns with the following subjects:
Name, activity, location and equipment.
Products and services.
Supply, sales, clients and marketing.
Staff; Business management.
33
Estimated costs per month.
Problems identified by the owner himself and his solution proposals.
After finalising and writing down the situation analysis, an action plan is to be drawn up. The
action plan starts on the basis of the last column of the situation analysis problems and
solutions and is structured according to the following subjects:
Name and activity of the owner.
Problems identified.
Self-help initiative of the business operator.
Additional support on behalf of the facilitator or BDS provider.
The methodology on how to carry out the situation analysis and action plan should be
discussed in detail, in order to prepare participants for the field exercise. While paying visits
to businesses during field assignments, the facilitators will have to follow the same procedure
of needs assessment and action-planning.
2.2.3 Field visits to businesses

In preparation for the visits to the businesses, the participants are organised in groups of two
persons each; e.g. with 20 participants you will have 10 groups. Every group internalises the
interview guidelines (issues to be covered in the interview, refer to annex 4, PowerPoint
presentation, using one card for each topic). Equipped with these cards they visit the
businesses and note the information that was gathered during the interview. Transport for the
visits to the businesses has to be organised at least one day before the field survey. The field
survey may be carried out in one morning or afternoon, all depending on the workshop time-
table.
Lessons learnt on field visits:

Do not suggest solutions on the first visit to the business! First listen
and observe, think about the results of the first interview and in the
second or third run try to discuss and suggest further activities.
Do not suggest solutions and actions that are too far from the business
operator's experiences and level of knowledge; e.g. a shoe repairer
working in a narrow corrugated iron sheet workshop, does not really
need a "business and management training". For such a business
operator, would it not be better to introduce a simple cashbook and
encourage him to save more?
Not every micro-enterprise really needs a business plan. Some specific
advice for some specific problems may be more reasonable.
Do not try to sell your prefabricated offer on training courses, e.g.
CEFE, Start Your Business (SYB), Improve Your Business (IYB) and
accounting training to every micro-enterprise. We are not against
training courses, but tailor-made training courses or on the spot advice
may often have a better impact than standard training.
Do not select complex enterprises or co-operatives in your first BDS
cycle. The situation and problem analysis for these structures are often
too complex and the findings of appropriate solutions and actions often
too difficult.
34
2.2.4 Drafting the final situation analysis and action plan
After the field visits, the participants have to copy their notes that are often in bad hand-
writing onto fresh cards and formulate the information into clear statements. The fresh cards
are then pinned on the soft board. Therefore, the trainer must prepare the soft board for the
situation analysis in advance.
The obtained information should be discussed in a step-by-step manner and all deficiencies
carefully identified. The most frequent mistake made by the participants is that they do not
detail the problems and potential solutions raised by the business sufficiently enough. For
example, the statement "Financial problem" is not a helpful piece of information: More
important is the cause of the financial problem. Why is there lack of finance? What is the
purpose of the loan? Often we may discover a different underlying problem, which
subsequently turns out not to be finance, but bad management or a bad market situation.
Similarly, "Needs training" is not sufficiently specified as a recommended action: What kind
of technical problem does the business operator have and what specific training does he
need?
After discussing the situation analysis overview and its deficiencies, participants should go
out for a second visit to the businesses, in order to improve the quality of the data. After
refining the situation analysis, the overview can be transferred into an action plan. Here, the
most frequent mistake made is that the mentioned self-help and support activities are not
concrete enough to be operational. "Organise vocational training" is not a clear statement:
What kind of specific training is needed? Nobody needs general vocational training, what is
needed is for example training in the maintenance of tools, in accounting, or on how to
improve the product quality of specific products.
Only if these issues are specified in the situation and problem analysis, will we receive
specific data for specific actions.
2.2.5 Management tools for facilitators and organisational development

The workshop not only enhances the BDS facilitator's capacity to deliver BDS facilitation, but
also the capacity for improved management. The management tool applied in this context is
the Folder Method . Folders may be introduced to each of the facilitators and also to the
institution involved.
Each of the trainees receives an office folder that is divided into different sections. The
trainees have to fill these sections with the respective documents. The sections include:
Mission and objectives of the organisation/institution;
Fields of intervention and services;
Leaflet or presentation brochure;
Five-month action plan for your activities and services to businesses;
Records on delivered services to businesses;
Five-month activity reports;
Job description of each of the facilitators;
List of partner organisations in your region and (facilitating agencies, BDS
providers, training centres, micro-finance and finance institutions, business
associations) and services;
Statistics and sector studies of your region.
The folder helps the trainee/institution in organising himself/itself. Secondly, it can serve as a
presentation folder for interested visitors from other business development institutions,
donors or other organisations. If the trainee/institution is unable to fill every section of the
35
folder, this is a clear indication that there is a need for organisational development. In some
cases the institution will only need to clearly spell out its mission and objectives, which will
already help it to focus its activities. In other cases the problem might be more fundamental,
e.g. the institution does not deliver any services and even lacks the qualifications. Then a
more complex intervention is needed and outside help might be required.
If the folder has been successfully filled, then we can conclude that the institution is up-to-
date with its documentation and activities. But if some items are missing (e.g. services
provided to businesses), we can then conclude that those activities are not being performed
or services have not been delivered, and as a result an intervention should be undertaken.
Therefore, the folder aids the facilitators in self-organisation and is a compiled presentation
for visitors, such as partner organisations, donors and other interested institutions and
organisations.
2.2.6 Introducing the BDS Network webpage

The Ethiopian BDS Network webpages www.bds-ethiopia.net and
www.start-your-business.net have to be introduced to the participants.
The following publications are available in major bookshops of Addis Ababa and the above-
mentioned webpages should be used by the facilitators and advisors when directly working
with the businesses: information booklets on tender procedures, import-export procedures,
trade fairs and exhibitions, banks and micro-finance institutions with loan terms, market
information, standards and quality as well as formats, such as a cashbook and business plan
are available in both English and Amharic.
The above-mentioned webpages also contain information on approaches, methods, lessons

learnt, a library of BDS, studies on organisational development, sector studies and profiles of
those member organisations that contribute to the development of the MSE sector in
Ethiopia.
2.2.7 Distribution of BDS formats and workshop report

At the end of the workshop, the following documents should be handed out to the
participants:
The necessary formats for planning and reporting: (i) situation analysis, (ii) action
plan, (iii) activity report (in hardcopy and electronic versions);
The formats for businesses in English and Amharic: (i) cashbook format, (ii) sales on
credit, (iii) raw material inventory, (iv) records on maintenance services, (v) cash
sales tickets, (vi) cash-flow statement, (vii) profit and loss statement, and (viii)
business plan,
The participants (the future BDS facilitators) should also receive BDS publications for the
necessary information on the business environment (refer to annex 14).
After the training, a final workshop report has to be produced and distributed, including a list
of participants, the workshop programme, the results of the field exercise (situation analysis
and action plan carried out by the participants) and the necessary formats.
36
2.2.8 Workshop evaluation by the participants
At the end of the workshop, participants fill out the following evaluation format. For each of
the criteria a tick in one of the three columns is made. The evaluation sheets collected from
the participants will have to be consolidated and the results published at the end of the
workshop.
Final evaluation of the BDS workshop
Criteria
Happy Indifferent Unhappy
1. My performance within the workshop
and my results
2. Quality of distributed documents
3. Learning-by-doing
4. Moderator
5. Fulfilment of my expectations
6. Am I able to put the BDS experience
into practice?
Total
2.3 Preparation for a five-day BDS training for facilitators

Some necessary preparations have to be carried out before the workshop starts and also for
every individual workshop day. Most of the preparation activities should be finished before
the beginning of the workshop. Here is an example of training for 20 participants:
Tasks of the trainer to be undertaken before training:

Take a look at the webpage www.bds-ethiopia.net to obtain all information on the
services available.
Prepare the programme sheet x 20.
Provide samples of the BDS publications of the Ethiopian BDS Network.
Prepare a participants list.
Prepare all documents for the training x 20.
Prepare situation analysis and action plan formats on the soft board (use cards of
differentiating colours for each MSE operator).
Produce a photo presentation on former BDS cycle experiences on the soft board.
Prepare all metaplan card boards (card boards for situation analysis must be cut
shorter because of limited space for the 6 columns of the overview table) and
materials as craft paper for soft boards.
Select businesses for the field visit and inform them of the date of the field visit,
usually the second day of the workshop. (You need to find 1 business for every two
participants and 2 businesses in reserve in the example it would be 12 businesses
for 20 participants.)
Cars must be available on the second day of the workshop from 13h on.
Tasks of the trainer - first day:

Prepare the room in time before the start of the workshop.
Reconfirm visits to businesses.
37
Tasks of the trainer - 2nd day:
Write the interview guidelines (issues to be covered in the interviews) on the soft
board (refer to PowerPoint presentation in annex 4). The participants will have to
copy them and prepare their notes for the field survey.
Organise field visits to businesses.
Prepare 20 floppy disks (one for each participant) with situation analysis, action plan
and activity report and the formats for businesses.
Tasks of the trainer - 3rd day:
Analyse the situation analysis overview produced by the participants after the field
visit and identify weaknesses.
Explain the results to the participants, aiming at improving data by means of a second
visit on the next day.
Tasks of the trainer - 4th day:
Soft board for action plan must be prepared.
Enough card boards and markers must be available.
Tasks of the trainer - 5th day:
Organise the BDS implementation and discuss a time-frame.
Provide every facilitator with a floppy disk containing the necessary formats.
Keep the situation analysis and action plan cards and transfer them onto a computer
to document the workshop results.
38
3. Next steps to BDS implementation
3.1 Organising a BDS cycle

A BDS cycle consists of a one-month preparation period and a five-month implementation
time. The main work to be carried out in the preparation phase is the needs assessment by
means of the situation analysis and the subsequent development of the action plans.
As a next step new BDS facilitators need to be instructed on how to put the workshop
experience into practice. Not every problem can be solved immediately and directly by the
facilitator and the business owners themselves. So, they have to identify business service
providers, such as training centres, professionals, accountants, specialised NGOs and
development agencies that may assist them in solving the problems. One of the main
activities of the facilitators is to link the business owners to BDS providers who can offer the
required services that address the identified problems. BDS providers, development
agencies, NGOs and training centres should be identified and contacted by the facilitators in
every region to discuss possibilities of collaboration.
Participants should be prepared for the BDS implementation as follows:

One month for visits to businesses, drafting of the situation analysis and action
plan, contacting some BDS providers and training centres for further
collaboration;
Five months for action-oriented BDS delivery and problem-solving.
Every six months a new set of 15 enterprises will have to be identified for the next BDS cycle
by each of the facilitators.
Table: Two BDS cycles of 6 months each
1 2 3 4 5 6 1 2 3 4 5 6
Preparation BDS delivery Evaluation BDS delivery
month Reporting
Preparation
of next cycle
3.2 Cost calculation for BDS implementation and time needed

When planning to run a BDS cycle with, for example, 10 to 30 facilitators addressing 150 to
450 entrepreneurs, the required budget will have to be calculated in advance. Important
budget positions are (refer to annex 10 for details):
Training sessions and workshops (trainer, materials, per diem, lunch, rooms).
Situation analysis and action plan writing and documentation (stationery).
BDS implementation with field visits and follow-up meetings (staff, transport,
communication).
Documentation and evaluation (transport, communication, stationery).
These financial implications should be discussed with the decision makers of the
organisations and institutions involved. Apart from these important financial aspects, it should
39
also be clear to the decision makers that the BDS facilitators will have to have sufficient time
for the BDS facilitation activities. If they are overloaded with other assignments they will
simply fail. BDS facilitation is a full time job!
3.3 Introducing a follow-up system

Follow-up systems are absolutely necessary! Do not organise training sessions without a
subsequent follow-up! If an institution has more than 10 facilitators in one region, it should
assign one person for the follow-up of the other facilitators ("follow-up expert"). The task of
the follow-up expert is to advise the facilitators on how to improve their situation analyses
and action plans. Only actions that are realistic and can really be implemented should be
listed in the action plan. Actions must be concrete enough for implementation. After two
months, the follow-up expert should analyse the implementation rate of the initially identified
support actions in the action plan. If there is deficiency within the implementation, the follow-
up expert should undertake measures to support the facilitator. An implementation rate
(actions implemented/actions planned in the action plan) of 60% should be the minimum.
If you remain with a large number of businesses whose action plans have not been
completed during a BDS cycle, you should assign one facilitator to complete the planned
actions. The other facilitators then select a new sample of 10-15 businesses each and work
with them in the new cycle.
3.4 Monitoring and Evaluation (M+E)

After the five-month BDS cycle every facilitator has to prepare his five-month activity report
(refer to annex 9) and send it to the follow-up expert. The follow-up expert consolidates the
activity reports into one final report that covers all activities of the respective institution during
the entire BDS cycle. The final report should be comprised of statistics on the rate of
implementation, the type of businesses supported, the composition of gender as well as
short descriptions of the problems encountered by the facilitators and recommendations for
the next cycle.
In order to introduce a basic monitoring and evaluation system (M+E) of the BDS cycles, the
institutions involved should collect and analyse the following data for activity and impact
monitoring:
Activity monitoring:
For activity monitoring it would be sufficient to produce general overview tables for BDS with
the following data (refer to examples of tables in annexes 11 and 12):
If CEFE entrepreneurship training constitutes a part of your BDS services:

The number of participants gender disaggregated; start-ups and existing businesses
must be included;
Addresses and telephone numbers of participants for further follow-up.
Business Development Services (BDS):

Collect the situation analysis overviews and action plans of every BDS cycle;
Collect the five-month BDS activity reports;
Produce an overview of those BDS activities achieved: Number of businesses
supported by gender and sectors;
Types and ranking of services provided (e.g. marketing support, technical training,
access to finance, etc.).
40
Impact monitoring:
Local organisations should not be expected to organise a high level international project
impact monitoring system!
Organise periodic group discussions (every six months or once a year) with randomly
selected start-ups and existing business owners who had access to BDS support and
discuss:
Whether the BDS support did help to improve their businesses (e.g. diversified
products/services, premises secured, savings increased) or increase income?
Use a simple SWOT analysis to acquire an analytically more refined picture, which helps to
improve your BDS support in the next cycle (refer to sample for SWOT analysis in annex 13):
If CEFE entrepreneurship training constitutes a part of your BDS services:

Did the start-up CEFE participants create their businesses or not? (make phone calls
for a sufficient sample of former participants);
Did the business owners solve their problems with the help of CEFE training? (group
discussion);
Did they stabilise/improve their incomes or businesses with the help of the CEFE
training?

Did the BDS support help to improve the business (e.g. diversified products/services,
premises secured, savings increased) or increase income?
Staff and management requirements for M+E

Assign an M+E expert who is responsible for supervising that all documents are put
into an M+E folder!
The BDS follow-up expert should regularly deliver all necessary documents to the
M+E expert.
Compile all activity data in an M+E folder to make the follow-up and analysis of
activities easier.
41
42
References
BDS Implementation
Miehlbradt and McVay: Third Annual Seminar, Turin, Italy, 9-13/9/2002, Seminar Reader:
Developing Commercial Markets for Business Development Services.
Available on www.bds-ethiopia.net/documents.html
Dieter Gagel (on behalf of the Ethio-German MSE Project), Addis Ababa 2002
PowerPoint presentation on demand-driven BDS.
Commercial Bank of Ethiopia (CBE) and Ethio-German MSE Project, Addis Ababa 2003
BDS training for work-out officers of the Commercial Bank of Ethiopia.
Paul Wolterstorf (on behalf of the Ethio-German MSE Project), Addis Ababa 2004
Support to private commercial BDS providers.
Available on www.bds-ethiopia.net/go.html
Ethiopian BDS Network, Addis Ababa 2004

Success stories on Business Development Services.
Ethio-German MSE Project, Addis Ababa 7/2004

Results of the third BDS cycle 1-6/2004.

Activity report 6/2004 on CEFE entrepreneurship training.
Irina Hetsch (on behalf of the Ethio-German MSE Project), Addis Ababa 11/2003
CEFE-upgrading of trainers in Ethiopia.

Activity report on Organisational Development.

Activity report on networking.
Mulatu Zerihun (on behalf of the Ethio-German MSE Project), Addis Ababa 10/2004
Impact study on CEFE entrepreneurship training, Business Development Services,
Organisational Development and Networking.
43
Publications on BDS themes:
Ethiopian BDS Network (EBDSN), Addis 7/2004

Start and Improve your Business.
Ethiopian BDS Network (EBDSN), Addis 2004

Marketing Strategies for Micro, Small and Medium Enterprises in Ethiopia.
Ethiopian BDS Network (EBDSN), Addis 2nd

Trade Fair Participation and Export Guide.
available on www.bds-ethiopia.net/go.html

Business Planning for Micro, Small and Medium Enterprises.

Accounting and Cost Calculation.

Loan Conditions of Commercial Banks and Micro Finance Institutions in Ethiopia.

Improve your Business Association.

Standards and Quality in Ethiopia.

Investment Guide for Ethiopia.

Services of Insurance Companies.
Ethiopian BDS Network (EBDSN) / Chamber of Commerce, Addis 7/2004

Taxation in Ethiopia.
available on www.bds-ethiopia.net/documents.html
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BDS related Webpages
www.bds-ethiopia.net
Ethiopian BDS Network (EBDSN)
www.start-your-business.net
Toolkit on How to Start and Improve Your Business
www.tvet-ethiopia.net
Technical and Vocational Training in Ethiopia
www.addischamber.com
Addis Chamber of Commerce
www.ethioexport.org
Ethiopian Export Promotion Agency
www.investinethiopia.org
Ethiopian Investment Commission
www.qsae.org
Ethiopian Quality and Standards Authority
www.mor.gov.et
Ethiopian Ministry of Revenue
www.action-research.de
Action-Research based SME Projects in Tanzania, Niger, Mali, and Tunisia
www.business-experience.com
SME Development Projects in Tanzania, Niger, Mali, Tunisia
45
46
Annexes
Annex 1: Training of trainers workshop programme............................................... 49

Annex 2: Five days standard programme on BDS training for facilitators............... 51
Annex 3: Six case studies on BDS interventions from Tunisia and Ethiopia........... 53
Annex 4: PowerPoint presentation on demand-driven BDS approach ................... 59
Annex 5: Commercial Bank example of situation analysis and action plan ............ 63
Annex 6: Activity report 2001-2005 on Business Development Services ............... 76
Formats
Annex 7: Situation analysis overview..................................................................... 84
Annex 8: Five-month action plan ........................................................................... 85
Annex 9: Five-month activity report........................................................................ 86
Annex 10: Cost calculation of BDS activities............................................................ 87
Annex 11: SWOT analysis format............................................................................ 88
47
48
Annex 1
Ethiopian Business Development Services Network
Example of Training of Trainer on Business Development Services (BDS)
Two days training
The programme is aimed at enabling the participants to train more BDS facilitators within their
regions and to organise regular follow-up meetings. The trainers need to have experiences from
former BDS cycles.
1. Day, date
9h00 Welcome and presentation of the programme

9h30 Presentation of a five-day action-oriented training programme for
facilitators (refer to annex 2)
10h00-10h30 Tea break
10h30-12h30 Each of the five days programme topics will be discussed in detail:
How to write a situation analysis?
How to write an action plan?
What is demand-oriented and participatory?
How to organise field visits to businesses?
How to organise semi-structured discussions with the owners?
How to identify demand-oriented needs and proposals of actions?
Documentation in a situation analysis overview
Documentation in a five-month action plan
Identify partner organisations and BDS providers in your region
Identify TVET centres in your region.
Which preparatory tasks have to be carried out every day by the trainer?
12h30-14h Lunch break
14h-15h Didactic materials and methods:

How to prepare the situation analysis overview on a soft board?
How to prepare the action plan overview on a soft board?
How to prepare the metaplan cards?
Formats and time-tables on CD.
15h-15h30 Tea break
15h30-16h Documentation of the five-day workshop results
Keep all cards for documentation
Input the results into your computer
Visualise the follow-up efforts on your office wall
16h-17h Open discussion
49
2. Day, date
9h-12h30 - Discuss existing situation analysis and action plans.

Consider the pros and cons.
Discuss the possibilities of problem-solving for each of the BDS
topics and obtain more information on each of the topics:
o Taxation, finance, export, vocational training, tenders,
marketing, accounting, working premises, trade fairs,
investment promotion etc.
- Show information services on the BDS webpage as well as print-out
brochures.
- Discuss issues related to collaboration with private commercial BDS
providers and possibilities of paid BDS.
12h30-14h Lunch break
14h-15h How to organise the next BDS cycle and follow-up facilitator meetings:
o Respect the time-table:
1 month for drafting the situation analysis and action
plan.
Five months for BDS delivery and action plan.
o Assign follow-up experts, if an organisation has more than
10 facilitators.
o Organise regular visits to the facilitators on a zonal level.
o Organise quarterly facilitators meetings for the exchange of
experiences.
o Prepare an interim progress report on the on-going BDS
cycle.
o Obtain the facilitators reports and compile the five-month
activity report at the end of the BDS cycle.
15h-15h30 Tea break
15h30-16h Cost calculation of the BDS activities

What are the necessary components for financing the BDS
implementation?
What is the optimum time needed for a facilitator to run BDS?
Do all facilitators have the necessary time to fulfil their BDS
tasks?
16h-17h Preparing the next BDS cycle

Time-table
Regions and zones involved
List of facilitators by region
Selection criteria for businesses involved
Number of enterprises supported by one facilitator.
50
Annex 2
Standard Programme on BDS training for facilitators

Five days from ....... to.........
1. Day, date
9h Welcome and introduction of participants
9h30 Programme presentation
10h00 Case studies of businesses and BDS
10h30 Tea break
11h General introduction to participatory BDS facilitation (please refer to annex 4)
How to put BDS into practice?
Permanent dialogue with the business owners
Situation analysis overview
How to talk to the business operator?
Interview guidelines
What is exactly behind the problem of a "lack of finance"?
Action-planning
Services provided (give own examples)
Training courses or on-the-spot advice?
Examples for on-the-spot advice
Steps involved in the development of MSE self-help- organisations
Market orientation of Business Development Services
Example of paid Business Development Services
The Business Services Delivery Cycle (BDS cycle)
Implement the BDS cycle for five consecutive months
Five-month report on BDS delivery
_______________________
12h30 Lunch
_______________________
14h00 Presentation of the situation analysis format (on a soft board)

Presentation of the action-planning format (on a soft board)
14h30 Discussion of situation analysis and action-planning (for MSEs, use the example of
Bahir Dar)
15h30 Tea break
16h00 ... discussion on situation analysis and action plan
17h30 End
2. Day, date
09h00 Field preparation for the afternoon
Forming of groups
List of businesses to visit
Preparation of survey materials and guideline cards
_______________________
12h30 Lunch
_______________________
14h00 Field survey
51
3. Day, date
09h00 Drafting the situation analysis overview... (on soft boards)
_______________________
12h30 Lunch
_______________________
14h00 Presentation and discussion of the results...
15h30 Tea break
16h00 ... presentation and discussion of the results
4. Day, date
09h00 Obtain more information in the field (improvement of data)

11h00 Improve the situation analysis overview
_______________________
12h30 Lunch
_______________________
14h00 Discuss the final situation analysis and analyse strengths and weaknesses
15h30 Tea break
16h00 Drafting the action plan (Soft board)
5. Day, date
8h30 Discuss and modify the action plan ...
10h00 Tea break
10h30 ... discuss and modify the action plan
_______________________
12h30 Lunch
_______________________
14h00 Steps to implement the action plan

How to collaborate with other service providers
How to encourage self-help and how to organise promotional measures.
15h30 Tea break
16h00 Organising the next Business Services Delivery Cycle
Distribution of the formats, time-table for the next cycle, choice of businesses,
collaboration with other BDS providers, documentation, evaluation and reports,
communication, business plan format, to-do list
18h Closing
52
Annex 3: Case studies on BDS interventions from Ethiopia and Tunisia
Coffee grinder
Problem:
The business owner does not have any
market problem. She could sell to bars,
restaurants, cafés etc. However, she
does not have a sufficient stock of
coffee. So she sells only in small
quantities.
Solution:
A credit for sufficient stock of coffee
would immediately raise her production
as well as her turnover. The credit
would be profitable. In this case we
support the credit demand. With the
profits reaped, she could buy some
machines, such as a coffee grinder for
special sorts of coffee and subsequently
develop her business with her own
resources.
Action:
The shop owner will document her
client orders and document potential
clients. The facilitator will help in
formulating business plans to facilitate
her credit demand.
Support for the extension of her

credit because the market situation
is excellent.
53
Public secretary
Problem:
No strategic location, no clients. Even
her initial funds have been exhausted.
The shop owner could not repay her

loan.
Solution:
With the prevailing bad market situation,
a credit demand for a second round
makes no sense The facilitator should
not support the owner's demand for
additional credit.
The only possibility is to change the
actual location immediately.
Action:
The facilitator provided advice for a new
strategic location (in the vicinity of
schools and administrations or in the
centre of the city).
Reassessment of the previously taken
loan was carried out.
No support for additional credit, due

to bad market situation.
54
Kindergarten
Problem:
Most kindergartens have the same
problem: Bureaucratic problems in the
start-up phase of their business delay
the opening of the kindergarten. So,
they cannot open before the new
school year and do not have a
sufficient number of children to sustain
operations. An optimum number of
children to run the school profitably is
between 40 and 80. Therefore, in the
first school year a large number of
kindergartens are not profitable and
fixed costs are too high.
Solution:
Several kindergartens need a
reassessment of the initial credit for
the first year.
Publicity and marketing measures
have to be undertaken before the
beginning of the next school year.
The high fixed costs (rent and
personnel costs) need to be covered
by obtaining a higher number of
children who could then pay for these
costs.
Before the start-up period, the
promoters have to be informed to start
business long before the beginning of
the school year, in order to overcome
this problem.
Action:
Support the reassessment of the initial
credit scheme for the first school year.
Provide advice on promotion and
marketing measures: a simple first
measure would be to support
marketing visits in their district.
Advise owner to plan for 60-80
children before the kindergarten can
break even.
55
Wood and metal workshop - Ambo
Situation
The workshop is situated in a quite part of town.
Products of this company consist of furniture, such
as beds, cupboards, chairs and doors. Metal
products, such as grills, gates and fences. Staff
consists of approx. five apprentices and workers. It
has a small five-operating-machine, however, poor
tools and a stock without maintenance
Problems
Poor sales situation, the quarter is too calm,
without any exhibition possibilities.
Regulatory problems for the supply of wood.
Poor equipment and tools apart from the
five-operation-machine.
Insufficient product quality. Work is carried
out with insufficient tools.
No adequate storage of raw materials.
small 5-operating-machine Proposals of the owner

Intends to acquire a workshop on the main
road for exhibition purposes.
Intends to improve his tools and machinery.
Actions
Start saving.
Buy some simple tools.
Support by BDS facilitator
poor tools and stock without maintenance Encourage for savings.

Encourage to buy simple tools
Make a supply study for wood. Could be a
general problem for carpenters in this region.
Refer to further possibilities of solution.
Needs on vocational training (could be part
of a technical on-the-spot advice by a
FeMSEDA master for carpenters at Ambo
town.)
Credit is not recommended because no good
sales situation.
Rent for a workshop on the main road will be
too expensive.
56
Auto-mechanics and metal works
Situation
The workshop is situated on the main road
of Ambo and obviously has a lot of clients
in both auto-mechanics and metal works.
Produces all kinds of vehicles, grills, gates
and fences. The owner himself produces
welding machines locally. He has a large
staff, with approx. 20 employees.
No sales problems.
auto-mechanics and metal works Problem

High transport costs involved in obtaining
spare parts from Addis.
No crane to lift motors as well as no
inspection ditch.
No thread cutting tools.
Proposals
Intends to open a spare parts shop or
stock in order to reduce transport costs.
Intends to buy a thread cutting tool set.
Actions
He already has a banking account.
Save more money.
Draw up a business plan, in order to gain
access to credit.
Is able to purchase the thread cutting tool
set with his own money.
Additional vocational training for thread
cutting (half-day training in another
workshop or FeMSEDA).
Support by BDS facilitator

Encourage the owner to save more.
Assist in business plan preparation.
Link owner to a provider of micro-finance.
Look for thread cutting tool suppliers and
prices in Addis.
Organise a half-day training session on
thread cutting tools.
Is there any possibility of selling the locally
produced welding machines (with a more
enhanced coachwork and painting?)
locally made welding machine
57
Tailoring workshop - Ambo town
Situation
The workshop is situated in a popular part

of Ambo and has a good sales situation.
The workshop looks very organised from
the outside and inside.
In addition to the tailoring shop, he has

opened a beauty shop, which is
complementing his first activity.
Products and services entail women

dressmaking and the renting of clothes for
festivities.
The owner has a stock of textiles.

Good sales situation.
Problems
Intends to extend his business and renew

his old and used sewing machines.
Believes to be overtaxed. Taxes are laid

down by estimated and without any
scheme.
Proposals/Actions
Start saving and draw up a business plan

to access credit.
Calculate the taxes and negotiate with the

tax administration.
BDS facilitator
Encourage savings.
Assist in business plan preparation and

make contacts to micro-finance institutions.
Analyse tax fees and assist with the

intervention to the tax administration.
58
Annex 4: PowerPoint presentation on demand-driven Business Development Services (BDS)
Steps to
- Needs Assessment put BDS into practice...
- Action Planning Each facilitator selects 15 operators in his region for the
implementation of a 5-month action plan in order to deliver
- Business Services Delivery Business Development Services.
BDS are based on a regular contact with the operators and
services are based on the operators demand.
A participatory approach to promote So, encourage the business operator to express his
SME operators problems and proposals.
Write a situation analysis overview of these 15 businesses
6/2002
and note their problems and proposals.
Dieter Gagel
mail@gagel.net 2
1
Permanent
...Steps to put BDS into practice dialogue with the operators
Agree upon a 5-month action plan for self-help

Leather works
activities of the operators and additional support by
the facilitator. Stationary Tailor
workshop
Contact facilitating agencies and BDS providers in Agricultural Regular visits
order to agree upon support for the action plan. service to the operators
Services that cannot be managed by the facilitator
himself, may be implemented by other BDS providers Carpenter
(facilitator makes contacts). Auto-mechanics
4
3
Regular Visits to Operators ! Situation analysis

Regular visits to the operators involved are Name / Products/ Supply / Markets Staff / Costs per Problems and solutions
necessary in order to solve the problems Activity / Services Sales / Clients Business month identified by the
identified. Regular means at least once per Location Marketing management operator
week, but if necessary, even 3 visits per week to
solve a problem are useful.
Problems are not solved by doing a situation

analysis and action plan. You have to go into
action and contact other partners and
administration in order to realize the solution.
4,5 5
How to talk to the business operator? Interview guidelines

The situation analysis has 3 aspects: Name and activity: Name, address, activity
To warm up with the operator Location: Location, dimensions, number of rooms, furniture etc.
To understand his way of thinking
To get data for action (and not data for data)
Equipment: Tools, machines, number and quality, maintenance
Introduce yourself and your concern. Products and services: offered by the operator
Sit down and have time, but don t waste the time of the operator. Supply: Raw and working materials, tools, machines, availability, suppliers
Listen and work off your questions without hurrying. Sales: Situation of sales, clients, intermediaries
Try to answer the operator if possible, but don t try to solve Marketing: Promotion actvities, publicity, advertising
immediately his problems or to find immediately the solution. Staff: Number and functions, qualification, school education
Not only talks, observations are very useful too!
Business management: Bookkeeping? Recording? Receipts?
When actions are identified, agree upon his self-help part and your
additional support. Costs per month: Rent, electricity, water, taxes, staff and social security contributions,
Talks are confidential, above all with the administration and other maintenance
operators. Problems and solutions: identified by the operator himself without suggestions by the
6 facilitator. Problems and solutions must be detailed! Marketing is not enough. 7
59
Insufficient qualification Low material or
Is Lack of finance really

equipment quality
the problem?
Bad location Cannot, don t want, Funds used
Rude competition Low product quality no incentive for for private
savings purpose
No marketing
Most of the operators see the Lack of finance as (advertising) Market problems No own savings and
funds
their main or only problem. Sale on credit
Insufficient
It s up to the facilitator to get to the bottom of this buying power Lack of
problem: Other problems in other fields of finance
intervention may cause the lack of finance High costs Management No business
(ask him: Why do you have a lack of finance? ). problems plan
High rent, water,
In that case, financial support will not necessarilly electricity costs High transportation costs High production No accounting
help the operator, but support in other fields of costs No stock listing
intervention can solve this secondary problem. Inefficient use of working

see overview next page... materials Labour costs
Material costs
8 9
10 Negociate with micro- Information on trade fairs

finance institution on Improve your tools and machines: on regional and national
Action planning
extension credit (spare on the spot advice to woodworker level, conditions for
parts shop) for auto- workshops of Ambo in contact with participation for several
mechanics workshop in the skills development centre Ambo regions
Ambo
Name / Problem identified Self help initiative Additional support by the

Activity of the operator BDS provider
Make contacts with Negotiate with the local

FeMSEDA for a vocational Possible administration in Bahir
training on new Dar in order to redefine
technologies for metal services provided taxation procedures
workshop
Set-up of a purchasing Courses and on the spot advice in Organize CEFE

central in the Tigray region accounting for small and medium rehabilitation course for
for electricians and businesses in Addis operators in the Tigray
plumbers region in order to
strengthen
competitiveness
11
Training courses Examples for on-the-spot advise

or on-the-spot advice? instead of courses
Training courses are often the only method used by BDS
providers. But training courses tend to be offer-oriented and do Accounting training courses often are without
not always meet the real needs. impact. On-the-spot advice to initiate a simple
On-the-spot advice can be an additional demand driven tool in a accounting system will be more concrete and
comprehensive BDS system: you can better control it in practice.
The field approach allows the operator to express his real Training for maintenance of tools and
needs on the spot and to demonstrate it.
machines with the operators own equipment
The facilitators can observe on the spot the situation and
problems of the operator concerned. and in their workshops will be more effective.
Certain problems cannot be solved in group training (operator Production run and workshop organization
doesn t want to speak in a group with competitors, specific should be optimized in the workshop.
problems with authorities etc.)
13
12
What kind of services?... ... what kind of services?
Based on the self-help initiative of the operator. Group support or group trainings are possible
if a certain number of operators have the
Necessary, according to the problems identified and same or similar problems, e.g.:
the priorities of the operators. Several carpenters need training in tools and machinery
maintenance;
Possible and realistic, according to the human
The carpenters of Ambo are not allowed to collect wood
resources and financial capacities. in the local area;
Services that cannot be managed by the facilitator Auto-mechanics of one region need spare parts store
for better supply;
himself, can be implemented by other BDS providers Vocational training in cut and design for tailors;
(facilitator makes contacts). Management training for medium entreprises.
14 15
60
Market orientation of BDS Examples of paid BDS services
BDS should be market oriented in terms of cost sharing Operators should pay services received within their
and cost recovery of its services. possibilities:
But there will always be services that will never attempt a Operators pay their own contribution for technical and
100% cost recovery but only cost sharing and micro business training courses;
enterprises that cannot afford paid BDS. Operators pay to write a business plan (but business plan
So we have to accept that BDS should be developed not forms and some general info are for free);
only by commercial business providers but also by other They pay for tender training course (but general info to
private non-profit organisations with diversified financing open tenders and tender procedures are for free);
(cost sharing services plus donor funded activities) as Operators pay for tender forms and for writing their
done by private NGO. Some services will even have to individual tender dossier.
be done by governmental or semi-governmental Pay for participation on expositions and fairs etc...
structures.
The Business
Services Delivery Cycle 5-month action planning
1. Regular talks
with the operators
5. Documentation and
common impact
evaluation by the Nov. 1 2 3 4 5 May 1 2 3 4 5 Nov 1 2 3-5...
operators and facilitators
Discussion 2. Identification of major
problems by the operators prepa- execution evaluation execution evaluation execution
Advice
themselves ration preparation preparation
4. Self help actions and Facilitation
additional support by the
BDS providers
3. Common formulation of
proposals and actions
23
22
Visualisation of
5-month report on BDS delivery your work in your office
Facilitator: BDS-provider: Date: Period:
Owner/ Support Services identified Services implemented Results and comments

Business (see action plan) (reasons for failure) Put a sign in front of your building and your
office indicating your service.
Fix the situation analysis and action planning
on the wall of your office.
Fix case studies of operators on the wall.
Make photos of the businesses and not of
seminaries and meetings.
Facilitator s additional comments: Everybody who enters in your office
immediately has to have a look on your work.
24
Situation analysis and Situation analysis and action

action planning for start-ups planning overview for start-ups
Start-ups (e.g. CEFE participants) often meet Name, address Project idea Actual situation of the project Additional
problems that couldn t be solved or taken in educational what has what has support by the
consideration during the course. level been done to be done BDS provider
So a effective follow-up system for start-ups

is essential for a better impact of the initial
training activities.
The overview for start-ups combines the
situation analysis and the action planning in
one matrix, because an analysis of an existing
business is not yet possible.
61
Steps to the Development ... Steps to the Development of MSE
of MSE self-help Associations... self-help Associations
Existing associations: Create associations:

Identify existing organisations. Encourage round tables and regular meetings
Do a SWOT analysis of these organisations and of operators of one locality or one or similar
interviews about situation and problems. trades.
Especially: What are the services for its Initiate discussions about their situation,
members? problems and solutions.
Agree upon a 5-month action plan for organi- Encourage regular networking between the
sational development and implementation of operators and with other facilitating agencies.
services. Initiate and develop network services for its
members.
Situation analysis Action planning

of self-help Associations for self-help Associations
Organisation / Problem identified Self help initiative Additional support by
Name of Number of Mission and Activities Problems and Proposals and
Group of the group the BDS provider
organi- members and structure implemented weaknesses initiatives
sation trades
Webpage-links to BDS
Ethiopian Business Development Services
Network (EBDSN)
www.start-your-business.net
Toolkit on how to start/improve your business
www.business-experience.com
Webpage on BDS experiences in Mali,
Guinea, Tanzania, Tunisia
29
62
Annex 5: Situation analysis of medium-size companies in Addis Ababa (example of Commercial Bank of Ethiopia BDS training, October 2003)
Name / Activity Products and Staff / Costs Problems identified by the owners
Location / Equipment Supply / Sales / Marketing
services Business management per month themselves and their proposals
A/ Real Estate Construction of Supply: Cement, corrugated Staff: Salaries: 1.3 Problems:
Development residential buildings: sheets, reinforcement bars, ceramic At any one time- 2,300 million Birr per - Material supply shortage
1 bedroom - 4% and plastic tiles, galvanised pipes employees of which 400 month - There are not enough suppliers of
Location: 2 bedrooms 8% and fittings, electrical and door qualified i.e. engineers, Expenditures: machineries and construction materials,
Woreda xx Kebele (new), G+0 3 bedrooms- fittings, accessories. finance administrators etc. minimum of Birr which are also highly capital intensive.
Total land area 2.4 mill. m2, 48% are employed on a 5000,000 per - Artisan labour attitude problem. Artisan
used land (built up area) G+1 3 bedrooms- Suppliers: Import from Spain and permanent basis. Are the month. labour is considered to be inferior and
25%, total plan for 1st phase 40% Italy, local dealers and highest salary payers in the Cost intensive undermined. Therefore there is a limited
6,250 houses, already built Hollow blocks ( for manufacturers. sector with salaries ranging items: number in the market.
houses: 2,125 overall plan (4 self consumption from 2,200 to 3,200 Birr for construction - Labour is considered to be cheap viewed
phases) 25,000 houses and sale) Sales: No problem in sales, 40 % of qualified personnel, payment materials from payroll point of view, but considering the
clients are Ethiopians living abroad, based on output for skilled (cement, iron, etc) inefficiency, discipline and material waste
Equipment: earns hard (foreign) currency; 30 labourers. incurred by the labour, it is expensive in
Construction machineries years of credit sales (they provide Ethiopia (due to the above-mentioned
(loader, excavator, dozer, long-term credit sale). High demand Business Management: factors, prices of residential houses are high).
dump, trucks, crusher, for 3 bedrooms of G+0 and G+1 Board of directors, board - Land lease pricing is expensive especially for
batching plant) all five years with 48% and 40% respectively. chairman, executive director, residential housing).
old. directors for finance - No preferential treatment with bank interest
Workshops (metal and wood Marketing: Mass media (radio, TV, administration, production, rates for investment activities.
work) manufacturing units journals etc...), brochures, person to engineering etc. - Collateral estimation is conservative and
(cement and cement person sales, clients bring new does not include the location value.
products) clients, pay commission for Audited financial statement - Short-term finance is not appropriate for the
meddlers. available as of June 2003. construction sector.
- Lack of necessary infrastructure
- The interest rate for the land lease (unpaid
part) is equivalent to the bank interest.
- Real Estate Development does not have tax
holyday, no incentives
- Residential building buyers are penalised
because they are expected to pay 15 % VAT.
Solutions:
- Long-term loan for building material
industries.
- Encouragement and incentive by the
government for this capital intensive sector.
- The government should create the
awareness among youth that all jobs are
equally important and promote skill based
training.
- The government should promote labour
discipline.
63
- Land lease price should be based on nominal
prices for residential buildings and should
differ from other sectors.
- Bank interest rates should be differentiated
from sector to sector and lower for capital
intensive investments.
- Collateral estimation should include location
value, as the value of land appreciates while
building values depreciate.
- As import is not possible within short periods
of time, due to various unforeseen factors
and because of the lead time being high,
loans should have a lifetime of at least three
years for trade and five years for investment.
- Government should supply the infrastructure
necessary for real estate development and
this needs special attention.
- Interest on unpaid land lease amount should
be on nominal price and if possible should be
given free for residential buildings and if
obligatory it should be on bank deposit
interest rate.
- Real Estate developers should be
encouraged and provided with tax breaks.
- Charging VAT in construction sector will
negatively affect Real Estate, as individuals
will start constructing their own houses.
Note: Companies have been made anonymous for reasons of confidentiality
Remarks to company A:
The company is a customer of CBE with a credit amount of 28,000,000 Birr.
Due date: 25/02/2005
Repayment: 2,266,677 quarterly
Statutes: regular payments
64
B/ Coffee Plantation and Products and Supply/, Sales, Marketing Staff and business Estimated fixed Problems:
Processing / Wholesaler of services: management costs per month: - Shortage of working capital.
Consumer Goods Supply: - The owner blames the bank for not paying
Export: - Supply of raw materials, labour Staff: Rent 20,000 B export proceedings on time.
Location: Addis Ababa, Coffee for export and other necessary inputs are - General Manager Electricity: 5000 B - Loan processing time is too long.
Woreda xx Kebele xx House purposes. available in the vicinity (around - Secretary Water: 1000 B - Transport requirement of imported items
No. xx, Main Office- at Addis Export of oil seeds Lemu) for the production of - Manager of the coffee Tax 25,000 B state that only Ethiopian shipping lines can
Ababa. and pulses. coffee. plantation and washing Salary for be used (monopoly).
Coffee processing, stores and Import of a variety - The coffee production line of (at Lemu)-diploma in permanent staff - The Government (NBE) does not allow
sales outlets (shops) at of consumer goods business is a major supplier for agriculture. 15,000 export guarantee schemes for coffee.
Merkato, which is the most and their coffee processing (coffee - Manager of trading Salary for - The Inland Revenue authority does not
ideal market place in the city. distribution. export). business line. Certificate temporary staff declare tax levy in due time.
The coffee plantation is Purchase of - Supply for consumer goods: in business and he is a 40,000 - The CBE does not assign a co-worker to
situated at Lemu on a total domestic consumer Domestic: from various sugar sales holder. Bank interests facilitate our relation with the bank and it
land area of 10 hectares, of goods and whole industries and domestic - Sales persons. 6,666. does not give timely advice.
which four hectares are sale distribution, factories. - Manager for coffee Maintenance - The well experienced employees sometimes
covered by coffee plants. such as sugar, salt Abroad: Major suppliers are processing diploma. 10,000 divert our customers to other competitors
There are also big coffee and oil. from China and India (easily - Purchasing Department.- Social security and leave the organisation.
processing plants, Rented buildings for available). diploma in agriculture. 1000. - Lack of collateral to receive adequate loans
warehouses and sufficient warehouses, shops, - Quality control-diploma. Total 123,666 from the bank, as the bank s policy is a
sales outlets for its activities. and a residence in Sales: For consumer goods they - Export Department. Annual export collateral based lending policy.
Number of shops: Three in the Moyale town. distribute on a wholesale basis for - Accounting Department- price amounts to
Merkato area. The main hotels, pastry and retailers. There diploma. 2 million USD. Solutions:
office has five rooms and is are three big shops for such - The bank should work with us as a partner,
sufficient enough to run the purposes. There are also large There are 50 permanent staff along with the follow-up of our day to day
business. warehouses to hold a sufficient members and approx. 200 activities.
amount of stock. For coffee export: temporary employees. - Improve the skills of employees through
Equipment: The enterprise Customers are directly contacted in training and workshops, so that they will
had a large coffee pulping Germany, Japan and Saudi Arabia. Business management: develop a sense of belonging.
machine, however, was Sometimes brokers are used to Book keeping and accounting - The bank should identify its prominent
recently sold. contact new buyers. activities are well organised; customers and extend special services, such
For coffee washing: One books of accounts have been as shorter loan processing times, grant loan
coffee washing machine, Marketing: TV advertisements for audited by external auditors on clean bases, assign co-workers and pay
one water pumping machine, certain imported goods such as up until the 2001/2002 fiscal export proceeds on a timely basis, even with
one electric generating exercise books and edible oils. year. minor discrepancies in the documents.
machine, different types of For export items such as coffee and - The Inland Revenue authority should inform
tools oil seeds they sometimes the tax levied on us in a timely manner.
Condition: All are in good participate on international trade - The Government should allow us to transport
imported goods through any means
condition fairs.
available.
Remarks to company B: diversified without the bank s consent. This was carried out by diverting the bank loan to
In general the business is well organised and profitable. It also contributes towards the activities, other than the intended purpose. We think that this is the major cause for the
generation of foreign currency for the country. Apart from the problems identified by the shortage of working capital. Currently however, they have requested a variety of facilities,
general manager, we have been informed that the business expanded and which are in the process of being realised. Past loans were settled timely, if not regularly.
65
C/ Manufacturing of Products and Supply/, Sales, Marketing Staff and business Estimated fixed
Problems:
pharmaceuticals - Monopoly of distribution by Epharm
services: management costs per month - Importation of pharmaceuticals that can be locally
Supply: produced.
Location: 4 types of intra-vein Suppliers in Europe, China, India - Production - Unnecessary specification, standards set by the
Gerji, Tel. No. xx, P.O. Box xx medicines, different Tools from France Staff: (raw material) Drug Administration and Control Authority for the
code xx types of Glucose: A total of 54 employees, 60- costs 461,375B issuance of various certificates to the
Large manufacturing (factory) 1. Dextrose in Sales/clients: 70% of them are production - Electricity manufactures (this hinders the manufacturers from
compound of around 1000 m2 water On a tender base. Distribution only workers, and have an 4,000B participating in international tenders)
- Tax structure that discourages the manufacturers
2. Dextrose in via Epharm Ethiopia (government education above grade 12. - Water: 3000B while encouraging importers: duty for importation
Equipments: saline enterprise), which is the main - Fuel for
Machinery is imported from Professionals: of drugs is 5%, while duty for import of raw
3. Normal saline distributor of pharmaceutical items. machines: materials is up to 40%
France, which has a value of 4. Ninger lactate Pharmacists -3 30,000B - Illegal and contraband drugs.
8-9 million Birr. The major Marketing: Chemists 2 - Fuel for - Lack of government protection of the sector from
pieces of machinery are: Promoting pharmaceutical products Biologists 2 generators the foreign market.
Distillation apparatus, is prohibited. Advertising and trade Engineer 1 (electricity - Non-preferential loan policy of the bank, identical
preparation tankers, filling fair participation are not possible for Technicians 3 interruption ) interest rates for all sectors
machines, laboratory Accountants 2 (1 BA + 1 - Lack of a grace period.
pharmaceuticals. 2,000B - Lack of long-term loan.
equipment, packing machines. The only option is to offer attractive diploma) - Tax break for 2 -
Druggist 1 (Diploma) Lack of supplier s credit.
prices on the tender. years Drugs:
Economist 1 - Payroll 24,000 - Restriction of their sales to one distributor only
- Rent free of (selling to retailers is prohibited).
Business Management charge (own Market:
- Have a business plan. building) - Duplication of business (investment), which
- The factory s book of contributes to market problem)
accounts has been
audited by an external Solutions:
auditing firm. - Investment office should make post investment
follow-up efforts to address problems on time.
- The factory is managed
- The government policy should encourage local
by a board of manufacturers rather than importers.
management and - Implementation of raw materials for pharmacy
professionals. products should be duty free.
- The Drug Administration and Control Authority
should revise its specifications for the issuance of
certificates in a way that considers the existing
conditions of the country.
- Loans should be granted to this sector at a lower
interest rate.
- Grace periods of more than 2 years should be
given.
- Long-term loans should be made available
Remarks to company C: Due date: 22/11/10

Credit amount granted: 15,306,136 Birr Quarterly payment: 750,000 Birr
Date granted: 22/11/02
66
D/ Jewellery and Perfumes, Products and Supply, Sales, Marketing Staff and business Estimated fixed Problems identified by the owner:
Lady s wear services: management costs per month - Failure to repay the previous loan granted for
Supply: the purpose of her textile business.
Location: Jewellery (68 Imports the goods from Dubai, Italy, Staff: Rent: 2100 B (for - Over taxation (60%) non-uniform tax
2 shops: different items such the USA and UK. Managed by the owner with both shops) collection periods.
W.xx K.xx , as necklaces, four employees (two in each Electricity: 120 B - Lack of alternative maritime transport.
W.xx K.xx) bracelets, earrings, Clients: shop). Salaries: 1000 B - Lack of sufficient sales in relation to
rings etc), High income groups. Taxes: has not yet repayment rate of the previous loan.
Dimensions:
Different brands of Management: begun to be taxed Proposal by the owner
2mx4m and 5mx4m perfumes. Marketing: - No business plan. (new) Negotiate with the bank for the extension of the
Lady s wear. - New entrant to the business - Maintains records of loan repayment period.
(one year in the existing stock cards.
business). - No training on customer Problem identified by the BDS officer
- Was previously occupied in the service. - Bankruptcy of the previous business.
wholesale business of textiles. - High monthly repayment rate (beyond the
- No advertising (personal sale) cash-flow generating capacity of the new
but good location. business)
- No advertising.
- No training on customer service.
- No savings.
- No business plan.
Proposal by the BDS Officer
- Negotiate with the bank a rescheduling of the
loan.
- The owner should promote her business via
various media.
- Encourage her to attend training (through a
voucher system).
- Advise her to also start saving.
- Assist her in the preparation of the business
plan.
Remarks to company D:
Due date: 23/03/06
Credit amount granted: 391,305 Birr Repayment: 12,169 Birr
67
E/ Spare parts trading Products and Supply, Sales, Marketing Staff and business Estimated fixed Problems identified by the business owner:
services: management costs per month - The import of poor quality spare parts from
Address: Supply: Taiwan and China with the same trademark.
Telephone xx, P.O. Box xx Provides spare Companies in Italy and Germany Staff: Costs in Birr: - Forged spare parts domestically fabricated
Addis, Fax xx parts for LADA and - Managed by the owner. Telephone: 300B like the genuine ones, using the same
Location: FIAT. Clients: - 55 permanent Fax: 30,000B trademark (counterfeiting).
xx Provides the market Abay Transport, Addis Ababa City employees of which five Electricity: 3,000B - All competitors are not registered as VAT
Dimension: A three floor with diesel Bus Transport service, Ethiopian are B.A holders, the Salaries: 70,000B (Value Added Tax) payers which creates
storey building on an area of Road Authority and other unfair competition.
generators and remaining being diploma Insurance 850B
approx. 600m2 other electrical Government and private holders and vocational Cost of goods - Frequent failure of telephone and fax
Quality: European Standard devices. organisations. school graduates (SOS). sold 200,000B services.
(Italy, Germany) Water: 200B
Trademark: LAR (original) Sales centres: Management: Solutions:
Addis Ababa, Dire Dawa Tax: 65,000B - Immediate corrective measures should have
Own building - Well designed
organisational structure. been taken by the responsible government
Marketing: bodies (i.e., police, court, SGS and Customs
Use of sign boards, newspapers - Use computerised
accounting system. Authority).
and advertising on an - All competitors should be registered as VAT
every other week (regularly contacts
payers.
with reporter). Posters and key - The telecommunication authority should
holders. maintain communication failures timely.
Remarks to company E:
Loan extended: 19,514,885 Birr for working capital

Due date: 21/01/2010
Repayment/month: 130,000 Birr
68
F/ Freight transport, Import Products and Supply/, Sales, Marketing Staff and business Estimated fixed Problems identified by the owner:
and Export, General services: management costs per month - Working capital problem.
Trading, Real Estate Supply: - Nature of the transportation sector (seasonal,
Development Freight transport Leant cotton from DES sister Staff: in Birr non-regular business).
(dry cargo) company. - Run by shareholders Office Rent 2,000 Clients:
Address: throughout the Sesame - local farmers and traders - Hired professionals for Garage 4,000B - Intentional delay in payment -907,000 long
xx country, Trucks- IVECO. finance and adminis- Electricity 700B receivables.
Export of leant Local manufacturers. tration Transport 1,500B Drivers:
Dimensions : cotton, sesame - Commercial department Salaries 48,000B
Head office with around 34 - Use of company s trucks for own business.
general trading Clients: All in all 50 employees Telephone 4,000 - Difficulty to trace the whereabouts of the
sqm 2 (AA), Branch office; Real estate Cotton: Thailand, South Korea and Insurance 25,000
B/Dar and Gondar , Garage drivers
development Japan. Business management: - Lack of communication means.
(A.A) Sesame and Cereals: Israel, - Has business plan. Total 85,200B
- Drivers do not submit payment documents in
Turkey, India and Pakistan. - Has audited financial a timely manner.
Freight Transport: NGOs, salt statements. - Drivers disconnect distance counter.
extractors, importers and other fleet Market:
operators (sub-contract). - Export: seasonal nature of exportable
products.
Marketing:
Through EPA (Export Promotion Transport:
Agency), retailers, friends, - Stiff competition.
commission agents, chambers. - Small profit margin.
business cards, exhibitions, trade - Dispersed markets (North, South).
fairs, seminars, brochures, internet, - Difficult to control the drivers (costly to
but no formal media advertising. establish check points).
- Frequent breakdown of trucks.
Solution (owner)
- The bank is to provide additional working
capital.
- The bank should work closely with the
customer to straighten out the loan instead of
executing foreclosure procedure.
- Some check points should be established to
control or trace drivers and also collect
payment documents.
Remarks to company F:
Loan size: 12,087,084 Birr

Due date: 3/3/2005
Repayment: 259,800 B / month
69
G/ Construction company Products and Supply, Sales, Marketing Staff and business Estimated fixed Problems identified by the company:
services: management costs per month - Slow market or the present market is not
Address: Raw materials: compatible to our capacity.
xx, Tel xx, P.O. Box xx Addis Construction of Cement and reinforcement bars Managing director: Co-owner, Utility expenses: - Unable to compete with foreign companies,
roads and bridges, Cement: Muger, Mesebo civil engineer, 30 years up to 120,000 p.a. due to lack of huge and modern construction
2
Dimension: 5000 m (off); irrigation, water A.A and D. Dawa (cement factory) experience Wage and equipment.
2,
Garage 10000 m with a large supply system Reinforcement bars: Foreign Gen. manager: Co-owner, salaries: up to 1 - Unfair competition.
office. - Payment delays after completion of projects;
project, building suppliers and domestic zequala civil engineer, 30 years million p.a.
projects, dam steel factory. experience. Material costs: Example: presently up to Br. 50 mil (retention
Earthmoving equipment: and receivables) are found unsettled by
Dozer (9), grader (6), wheel projects. Other Inputs: 20 million p.a.
Fuel and sanitary materials (both by Staff: Other costs: all customers.
and chair loaders (8), scrapers Sister companies Up to 2,000, all depending on depending on the
(2), compactors and rollers foreign suppliers). Proposed solution by the company:
- Real estate the projects. 50 qualified nature and
(9), front-end dumpers (6), development. engineers, 25 semi-grade, - Lobby the government to support local
excavators (6). Sales: management of contractors in the construction sector.
- Manufacturer of Major clients (more than 90 %) are others are support staff. the project.
concrete roof and - Arrangement of credit facilities.
Motor vehicles and trucks: government organisations
Light and medium pass tiles. Business management: Payment collection strategy steps for receivables:
Annual turnover up to 50 mil. B. - Amicable means are preferable
vehicles (56), light and heavy - Gold exploration Well established accounting
cargo truck(8), high and low mining. system, financial control; - Arbitration board
Marketing:
bed trucks (3), dump trucks - Side business: audited by internal and - Court
No promotion, the company has
(22), fuel truck with trailers (3), Marble and road tar been known for more than30 years. external auditors.
water truck (6), mobile production
workshop (1) etc.
Remarks to company G: The company's structure is complex. Presently, the company is not
operating at its full capacity. We observe that the company is
Two types of loans: involved in various businesses (multi-purpose), rather than
Overdraft: 10,500,000 specialising and strengthening its potential in few businesses.
Term loan: 14,906,386
Repayment for term loan: Further investigation is required to obtain a workable proposal on
1,475,593 B / per quarter the issues of financial constraints and business management.
70
Five-month action plan of medium-size companies in Addis Ababa (example of Commercial Bank of Ethiopia BDS training, October 2003)
Proposal of action
Name / Activity Problems identified Self-help initiative of the business operator Additional support by the BDS Officer or BDS provider
A/ 1. Supply shortage of construction 1.1 Study the bottle necks in construction materials supply. 1.1 Contact the Ethiopian and Addis Chamber of Commerce and look for
materials. 1.2 Negotiate with suppliers to increase the supply. interested suppliers to engage in production of construction materials.
2. Capital intensive construction 1.3 Establish hollow block production unit for supply. 1.2 Help interested potential investors to prepare viable projects and lobby
Real Estate
Development machineries. 2.1 Import machineries and produce doors and windows. financial institutions together with Ethiopian and Addis Chambers of
3. Workers are considered to be 3.1 Hire the already in-house experienced labourers from Commerce to finance these projects.
inferior, image is undermined. the market and upgrade them trough on the job 3. Bring the problem to the attentions of the Investment Authority, the
4. Labour is expensive as compared training. Chamber of Commerce and the Engineering Association.
to efficiency and material and 3.2 Provide practical training to the new graduates from 4. Contact with the TVET programmes and institutions for upgrading the
time wasted by the labourer. vocational schools before they start working. technical skills of labourers through on-the-job and tailor-made
5. Land lease price for residential 4.1 Test the skill of potential employees before they are technical trainings.
buildings is very expensive. employed to see the level of knowledge. 5. Create a forum together with the Chamber and negotiate with A.A
6. Bank interest rate is being equal 4.2 Establish 2 control systems for labourers with minimum Administration in order to have a policy that would allow land free of
to all sectors as become the output. charge, or at a nominal price for residential buildings.
problem of the sector. 4.3 Teach the employees that any working equipment is 6. Initiate the Chamber and the Engineering Association to negotiate with
7. Collateral estimation is linked directly with the life of the worker. banks and the government for the differentiation of interest rates for
conservative and does not 4.4 Establish incentive systems, such as health service, investments in the real estate development sector.
include location value. food facility, etc... In order to increase the sense of 7. Land lease for residential building is given for 99 years and business
8. Short-term loans are not belongingness of the workers. buildings for 50 years. Based on this the facilitator should initiate
appropriate for the sector. 5. Do a study on the impact of land lease price on the real dialogue as to include land location value in the estimation for the
9. Lack of infrastructure (water, state Development and submit same to the concerned indicated years.
road, electricity, etc). bodies. 8. Create awareness as to the need for specialised banks such as
10. Interest charge for land lease is 6. Negotiate for special interest rates for different real industrial, agricultural and construction bank.
equivalent to the bank borrowing estate development activities. 9. Organise a forum of discussion on the problems of infrastructure supply
rate. 7. Negotiate with the bank on revising the collateral 10.1 Together with the Chambers, the facilitator has to try to convince the
11. Real Estate Development does conditions. Addis Administration that land for residential building should be given at
not have tax break and incentives 8. Negotiate long-term loan possibilities. a nominal price and no interest on unpaid balance.
12. Building buyers are penalised 9. Start to construct roads, installing electricity and water 10.2 and 11.1 and 12. The facilitator should try to create a forum in which
because they are expected to pipes by means of own resources. the Investment Authority, Ministry of Revenue and Chamber of
pay 15 % of VAT + title deed 10. Submit petitions to the concerned organ to reduce land Commerce would discuss about the impact of the issues of interest
transfer fee (6%). lease price. charges for land lease, tax breaks and incentives for the investment
11. and 12. Submit petition to the concerned authorities. sectors and VAT payments for real estate development.
Note: Companies have been made anonymous for reasons of confidentiality

Partner Organisations and Institutions involved
- Educational Bureau (Training) - Trade Union / Engineering association
- Addis Ababa Administration (Land Lease)
- TVET program (GTZ) - Chamber of Commerce
- Ministry of Revenue (Tax) - Investment Authority (Tax break, secularity)
71
Name / Activity Problems identified Self-help initiative of the business owner Additional support of the facilitator or partners
B/ 1. Shortage of working capital. 1. Negotiate with the bank or look for other lending institutions 1.1 Assist the business to prepare a business plan and a cash-flow
Coffee Plantation 2. Export proceeds are not paid that may satisfy financial needs of the company. forecast and to use the loan only for the intended purpose.
and Proceeding timely. 2. Convince the bank to identify its good and prominent 1.2 Assist him in establishing a more enhanced working capital
3. Long loan-processing time. customers and pay export proceeds timely even with management, either by training his employees or looking for
4. Lack of officers from CBE to discrepancies of documents. professionals.
advise the business. 3. Negotiate with the bank to design a mechanism to shorten 2.1 Encourage and assist the owner to submit all the necessary export
5. Lack of collateral to receive the loan processing time. documents to the bank and concerned parties.
adequate loan from the bank 4. Convince the bank to assign co-workers to assist in the 2.2 Encourage and assist the owner to export goods timely as per the
as the bank s lending policy day-to-day activities of the company in relation to the bank's requirement of the buyer (as per the l/c terms) and have smooth
is collateral based. loan. relationship with buyers abroad by fulfilling any obligations, such as
6. The National Bank of 5. Convince the bank that the company is prominent, a good payment of commission to the buyers agent.
Ethiopia doesn t allow export customer and deserves a loan on looser terms. 2.3 Advise him to employ well experienced persons in export trade.
guarantee scheme (pre- 6. Negotiate with the National Bank of Ethiopia through the 3.1 Advice the owner to submit all the necessary documents such as
shipment export credit) for coffee exporters association and Chamber of Commerce to business plan, audited financial statements and others.
coffee exporters. allow export guarantee scheme. 3.2 Advise and assist him to hire experienced persons or to use
7. Government requirement of 7. Convince the government to allow the transportation of professional consultants to prepare such documents.
transportation of imported imported goods by means of any transport available. 3.3 Negotiate with the bank to shorten the loan processing time.
items only through the 8. Address the issue to the Inland Revenue Authority, so that it 4. Negotiate with the bank to assign a follow-up adviser.
Ethiopian Shipping Lines. may assess and inform the tax levied on him in a timely 5. Encourage him to show the bank his credit worthiness so that he will
8. The Inland Tax Revenue manner. receive a loan on clear bases or at a lesser collateral margin.
Authority doesn t assess tax 9.1 Provide incentives to the existing employees so that they 6.1 Arrange meeting with other businesses with similar problems.
obligations levy on time will serve the organisation at their maximum capacity and 6.2 Lobby with the National Bank of Ethiopia (NBE).
which may result in penalty. feel sense of belongingness. 7. Arrange meeting with other businesses with similar problems and lobby
9. The well experienced 9.2 Employ family members. with the Ethiopian Transport Authority (ETA)
employees of the 8.1 Assist the owner to organise his books of records in such a way that
organisation, sometimes, the tax authority can assess and levy the tax timely.
leave the organisation and 8.2 Encourage the owner to save own funds and pay tax voluntarily.
divert customers to other 9.1 Assist the owner to identify any problem in the management and re-
competitors. arrange the internal management system (make interviews with the
staff on problems at work).
9.2 Encourage him to provide incentives to his employees.

- Ethiopian Shipping Lines
- Ethiopian Transport Authority - Chamber of Commerce
- National Bank of Ethiopia (NBE) - Inland Tax Revenue Authority
- Coffee Exporters Association
- Export Promotion Agency
72
C/ 1. Importation of 1. Participate in the meeting to be held with the Ministry of 1.1 Identification of other pharmaceutical manufacturers that have similar
pharmaceuticals that can be Health and Pharmid Ethiopia and discuss problems. problems with imported products.
Manufacturing of locally manufactured. 2.1 Try to fulfil the basic and mandatory specifications required 1.2 Organise a meeting with these manufacturers, their association and the
pharmaceutical 2. Exaggerated specifications by the Drug Administration and Control Authority. Addis Chamber of Commerce.
products and standard set by Drug 2.2 and 3 Participate in the meeting to be held with the Drug 1.3 Assist the Addis Chamber and the association to arrange a meeting
Administration and Control Administration and Control Authority for drug specifications with Pharmid, the Ministry of Health and the manufacturers association
Authority. and distribution restrictions. on how to promote local production.
3. Restricting manufactures in 4. and 5. Participate in the meeting to be held with the Ministry 2. and 3. Assist the Addis Chamber and the Pharma association to
selling to one distributor only of Revenue for taxation problems and the Customs organise a meeting with the Drug Administration and the Control
(they are not allowed to sell Authority for contraband products. Authority for drug specifications and monopoly in distribution.
to retailers). 6. Discuss the problem with the top management of the bank. 4. Initiate a meeting with the manufacturers and the Ministry of Revenue
4. High duty tax levy on on high tax duties of imported raw materials for local Pharma
imported raw materials for production and the Customs Authority for contraband products.
the production of 5. Assist the Addis Chamber and Pharma association in organising a
pharmaceuticals. meeting with the Customs Authority on how to control contraband
5. Illegal/contraband products.
pharmaceutical products. 6. Assist manufacturers in discussing their financial problems with the
6. Non-preferential loan policy bank's top management.
of the bank for local
production, identical interest
rate, lack of grace period
and lack of long-term loans

- Ministry of Inland Revenue
- Pharmaceutical Manufacturing Association
- Drug Administration and Control Authority
- Ministry of Health - Customs Authority
- Pharmaceutical, medical supplies Import and wholesale S. Co. - Commercial Bank of Ethiopia
(Pharmid)
73
D/ 1. Failure to repay the 1.1 Negotiate with the bank for an extension of the loan repayment 1.1 Go back to the business to gather information on its cash-flow
Jewellery, Perfumes previous loan granted for 1.2 Negotiate with the bank to change the repayment terms from generating capacity.
and Ladies wear the purpose of her textile monthly to quarterly instalments 1.2 Assist the owner in negotiating with the concerned bank organ on a
business. 2. Negotiate with the Inland Revenue to spread the accumulated tax re-scheduling of the loan.
2. Non-uniform tax collection over the six monthly repayments. 1.3 Follow-up the regular repayment of the loan.
period. 3. Discuss the problem with Ethiopian Shipping Lines. 2. Discuss with the Inland Revenue that they inform the business
3. Slow transportation service 4. Make contacts with retailers and provide products on a wholesale community of their annual tax obligation in a timely manner.
provided by Ethiopian basis as second activity. 3. Organise a meeting with the Ethiopian Shipping Lines and Chamber
Shipping Lines. of Commerce to seek solutions for the slow sea transport.
4. Lack of sufficient sales. 4.1 Promotion of the products through various media.
4.2 Look for retailers where distribution can be carried out on a
wholesale basis.
Partner Organisations and Institutions involved - Ethiopian Shipping Lines
- Chamber of Commerce - National Bank of Ethiopia (NBE)
- Inland Revenue Authority - Ethiopian Transport Authority
- Inland Revenue Authority
E/ 1. Counterfeited spare parts 1.1 Ask the Customs Authority to check the genuine quality 1.1and1.2 Identify the companies with similar contraband problems and
Spare parts trading using the brand name of the standard of spare parts to be imported. arrange joint meeting with Customs Authority, Police commission,
company 1.2 Ask the police to bring the counterfeiters to the court and Justice department and Chamber of Commerce.
1.1 Imported from Taiwan and the court to pass decision timely. 2. Arrange a workshop on VAT in collaboration with Inland Revenue
China 2. Ask tax authority that all competitors should be registered Authority.
1.2 Domestically fabricated as VAT payers. 3. Identify companies with similar telecom problems and arrange joint
2. MSE competitors are not 3. Ask Ethiopian Telecom to repair communications failures meeting with the Ethiopian Telecom and Chamber of Commerce.
registered as VAT payers timely.
3. Frequent failure of
telephone, fax and internet
services
Partner Organisations and Institutions involved - Inland Revenue Authority
- Ministry of Justice - Telecommunications Authority
- Police commission - Customs Authority
- Ethiopian Chamber of Commerce
74
F/ 1. Working capital shortage. 1. Utilise the existing credit facilities efficiently. 1. Inform on the different financial facilities.
Freight Transport 2. Transportation business is irregular and seasonal. 2. Ask for additional facilities when there is a need for 3. Advise on contractual procedures.
Export/Import 3. Clients delay in payment. export guarantee services and pre-shipment export 4.1 Inform on incentive measures in personnel management.
General Trading 4.1 Drivers behaviour credit 4.2 Encourage to contact other freight operators and organise
Real Estate 4.2 Absence of check points to control drivers and 3. As far as possible make strong contractual meetings to ascertain common check-points.
Development forward payment documents agreements 5.1 Assist in efficient stock management and provide help for
5.1Seasonality of export products. 4.1 Try to change the attitudes of the drivers by contacts with suppliers.
5.2 Stiff competition in the freight sector. introducing efficient controls, incentive mechanisms 5.2 Discuss strategic pricing.
5.3 Dispersed market (North-South-East-West). and fire those who are incorrigible; strengthen 5.3 Encourage a freight operator meeting dealing with
control mechanisms possibilities of collaboration.
4.2 Surprise check at different locations (check points)
and set up check points in collaboration with other
freight operators, introduce document collection
systems at these check points
5.1 Exercise efficient stock management for export and
establish relationships with good suppliers
5.2 Quote competitively.
5.3 Negotiate regional preferences with competitors.
Partner Organisations and Institutions involved - Transport bureaus
- Chamber of Commerce - Other freight competitors
G/ 1.1 Unable to compete with foreign companies, due 1.1 Lobby the government into supporting local 1.1 Assist to arrange forum through the contractors association
Civil engineering to inadequate working capital. contractors or construction companies (Ministry of to identify the real causes of the problem and assist them to
works 1.2 Huge and modern machinery and equipment Infrastructure) present the findings to the Road Authority and the concerned
Construction of requirement in bids; 1.2 Discuss the implementation of a leasing company government bodies.
infrastructures and 1.3 Some projects are awarded without bidding. for huge machinery. 1.2 Prepare and present the pre-feasibility studies on the idea of
buildings 2. Payment delayed due to bureaucratic processes, 1.3 Ask to have a meeting with the engineering establishing an equipment and machinery leasing company.
budget problems, technical arrangements etc. association on bid procedures and discuss the fact 1.3 and 2. Help to initiate a meeting with regard to bidding
3. No long-term credit facilities for machinery of awarding contracts without bidding. procedures and payment delays with the engineering
4. Absence of specialisation in the business.. 2. Collect the payments due through amicable association and the concerned government bodies.
measures, arbitration board or court. 3. Make contacts with involved banks.
3. Negotiate with banks for long-term credit for the 4. Ask Addis ReMSEDA and the Trade and Industry Bureau to
purchase of equipment and machinery carry out a survey on sub-contracting and suppliers in the
4. Discuss with the engineering association on how to construction sector.
identify and promote potential suppliers in the
construction sector.
Partner Organisations and Institutions involved - Engineering Association - Commercial and Construction banks
- Addis Regional Micro and Small Enterprises Development Agency - Ministry of Infrastructure - Chamber of Commerce
and Trade and Industry Bureau for supply problems - Road Authority
75
Annex 6:
Analysis of the fourth BDS cycle (1/2005-6/2005)

1. Comment
1.1 Overview of all enterprises involved
1.2 Number of enterprises served and support activities achieved
1.3 Sectors of businesses supported (sample)
1.4 Gender composition (sample)
1.5 Types of BDS activities achieved (sample)
1.6 Employment program for graduates through creation of enterprises
1.7 Comparison of the four BDS cycles
1.8 Limitations and advantages of the 4th BDS cycle
1.9 Impact evaluation
1.10 Recommendations
2. Tables Statistical overviews
___________
1. Comment
1.1 Overview of total enterprises involved
It has become evident that implantation of BDS using the already introduced
approach of the Ethio-German MSE development initiative is well spreading in
Ethiopia as justified by the increased number of enterprises involved in the fourth
BDS cycle. The total number of enterprises supported by partner organizations
during the 1st, 2nd and 3rd BDS cycles were 127, 698 and 1,088 respectively.
However, this number has grown to 4,783 during the 4th BDS cycle. Some of the
factors for the increment were:
all sub-cities of Addis Ababa have implemented the cycle by increasing the
number of facilitators and business operators compared to the previous
cycles;
in Tigray region, the number of Woredas involved has grown from 11 to 25;
in Amhara region, Woredas involved have grown from 12 to 18.
A total of 501 facilitators in our project regions of Amhara, Tigray and Addis Ababa
have paid visits to 4,783 business operators and carried out a situation analysis and
action plan for each of them. A total of six organizations have implemented the
fourth BDS cycle.
Total overview of the fourth BDS cycle

Organization Number of Number of
facilitators involved Businesses
supported
Amhara MSEIDB 9 131
Contractual facilitators 79 482
Amhara Women Entrepreneurs 2 30
Tigray MSEIDB 35 350
Addis MSEIDB (10 sub-cities) 367 3,670
Alliance for Development 3 45
Progynist 3 60
Pro Pride (Merkato) 3 15
Total 501 4,783
76
1.2 Number of enterprises served and support activities achieved (sample)
As indicated in the above table, the total number of business operators is too high
for the project staff to compile all the data required for this report. Preference is,
therefore, made to compile data on sample basis. A good size of representative
sample (16% of total) has been considered and data relevant to 764 business
operators is compiled as follows.
Organization Number of Businesses Support % of initial

facilitators supported activities planning
achieved
Amhara MSEIDB 25 260 470 81%
Tigray MSEIDB 4 40 59 71%
Addis MSEIDB (10 sub-cities) 34 342 571 76%
Alliance for Development 3 46 57 64%
Progynist 2 61 181 87%
Pro Pride (Merkato) 3 15 29 74%
Total 71 764 1,367 78%
Sample: 764 of 4,783 enterprises involved
1,367 support activities of initially 1,751 actions identified have been achieved (78%
of the initial planning). The following detailed analysis is also made for better
understanding of the implementation of the fourth BDS cycle based on the sample
size of 764 businesses.
1.3 Sectors of businesses supported

The composition between trade and manufacturing enterprises is more or less
balanced. All kinds of businesses have been involved, there was no limitation to any
one sector, but trade businesses are the majority, followed by manufacturing
businesses and services.
Sales of food items are the majority of Number of %

Type of business
the trades supported, followed by businesses
sale of leather and construction/ Trade 298 39%
building materials. Manufacturing 266 35%
Service 200 26%
Food processing takes the majority of Total 764 100%
the manufacturing businesses, Sample: 764 of 4,783 enterprises involved
followed by production of textile and
leather articles.
Restaurants, bars, groceries and tearooms are the majority of the service
businesses, followed by tailoring services.
1.4 Gender composition

As regards the gender composition of Gender Number %
enterprises supported: 46% of the Male 391 51%
businesses served were run by Female 349 46%
women operators. Partners 24 3%
Total (sample) 764 100%
77
1.5 Types of BDS activities achieved
The main areas of support activities are the following:
Types of Services provided
Management/Accounting
20,50% 28,10%
Finance facilitation
Marketing service 16,50%
Access to premises 9,80%
Entrepreneurship training 8,10%

Adminstrative procedures 6,80%
Product development 2,60%
Association development 2,50%

Business planning 2,30%
Raw material/information 2,00%
Access to equipment 0,60%
Technical skill training 0,30%
0% 5% 10% 15% 20% 25% 30%
Total number of enterprises involved: 4,783
1.6 Employment program for graduates through creation of enterprises
36 TVET graduates without employment have been supported in a 6-month BDS cycle to
create their own enterprises. Three BDS facilitators of Gulele sub-city have been assigned
for this.
The implementation of the entire pilot scheme was organized in three phases:
Phase I: CEFE entrepreneurship training
Participants were expected to take CEFE entrepreneurship training as outlined in the
planning document. The CEFE knowledge was envisaged to assist participants identify
viable business ideas, analyze market and supply situations, identify main actors in their
sectors and produce viable business plan for funding.
Phase II: Business Development Services for start-ups
The 36 unemployed TVET graduates were divided into 3 groups. The main sectors selected
were construction and building, metal works, construction related woodworks, electricity,
plumbing and painting. The participants were assisted to be organized and form
enterprises. The three BDS facilitators from Gulele sub-city MSE office linked the graduates
to relevant institutions such as municipality for access to premises, training centers for
additional training and on-the-spot technical advice, financial institutions for access to credit
and others.
Phase III: Follow-up of existing enterprises
After business implementation, the initiated enterprises got a mid or long term follow-up in
order to make their businesses more efficient. The following services have been provided:
Trained in entrepreneurship training
Generated business ideas
Produced business plans
Assisted in enterprise formation and business license
78
Identified legal form of business
Introduced to official qualification test (QT)
Linked to access for premises
Linked for access to finance
Linked for upgrading technical skills in a large-scale construction company
Linked to technology center for equipment supply (hollow-bloc machine + tools)
Support for workshop organization
Linked to existing construction business for experience sharing
Linked to markets of different construction activities of the municipality
Further training in business management and marketing
Results:
36 Technical school leavers are self-employed
Created additional employment by sub-contracting with others
Secured regular income by diversified markets
Local communities access affordable services
Addis Ababa city administration gets more labor resources for
small-scale construction projects.
The experience of Gulele sub-city will be replicated by five other sub-cities with 15
facilitators and
180 graduates in the next 6-month BDS cycle.
1.7 Changes to the former cycles and totals of four cycles
Concern 1st BDS 2nd Changes 3rd BDS Changes 4th BDS Changes
cycle BDS 1st to 2nd cycle 2nd to 3rd cycle 3rd to 4th
cycle
Number of facilitators 18 51 + 183% 98 +92% 501 +511%
Number of business operators 127 698 + 450% 1 088 +56% 4 783 +440%
served
Average number of operators 7 14 + 100% 11 -21% 9.5 -14%
supported by one facilitator
Support activities achieved 65% 74% + 9% 76% +2% 78% +2%
(% of initial planning)
Number of Businesses supported

6000
5000 4 783
4000
3000
2000
1 088
698
1000
127
0
1st BDS cycle 2nd BDS cycle 3rd BDS cycle 4th BDS cycle
79
1.8 Limitations and advantages of the fourth BDS cycle
Limitations:
Frequent facilitators' turnover;
Lack of some basic office facilities in POs implementing the BDS like computers
which would help for recording data on operators;
Non-standardized communication between facilitators and supervisory staff;
Insufficient networking between facilitators;
MFI's credit policy absence of alternative lending methodologies;
On the one hand the BDS activities are painful where as the facilitators are low paid
and there are no incentives to compensate;
Some operators confuse the BDS activities with the taxation issues and are fearful
for getting the service;
Number of NGOs implementing BDS decreased during this cycle due to the very
fact that NGO projects phase-out after some years of implementation, such as three
years.
Advantages:
Increased outreach of BDS to new Woredas (Amhara and Tigray MSEIDBs), thus
increased number of enterprises that received business development services. (See
the table above for all the comparisons);
Sub-contracting of BDS provision to young graduates (Amhara MSEIDB);
Increased access to financial services, work premises and enterprise formation
compared to the last three cycles;
Customization of BDS to the needs of TVET graduates (Gulele sub-city working with
36 unemployed TVET graduates).
1.9 Impact evaluation
All figures indicated in this report make part of our activity monitoring and are not
supposed to be impact monitoring. The impact evaluation is handled by an
independent consultant who carries out impact studies in the fields of our main
intervention areas (CEFE, BDS, Organizational Development, Networking). The
impact study is available for download on www.bds-ethiopia.net/documents.html
(Monitoring and Evaluation chapter).
1.10 Recommendations
It has been agreed with the partner organizations to implement next BDS
cycles by focusing on four sub-sectors: food, textile/garment, leather and
construction. Therefore we would be sector-oriented in implementing
BDS with partner organizations, as the above mentioned sub-sectors are
also priorities for the Ethiopian government in general and the partners in
particular. In this regard, the partners would allocate sector specific
facilitators in implementing the cycles. This approach is also in line with the
Private Sector Development pillar of the upcoming Ethiopian Capacity
Building Programme (ECBP).
Implementation of the next BDS cycles would also provide room for
tailoring BDS to the needs of TVET graduates looking for self-
employment. Based on the experience gained from the recent pilot
scheme on self-employment of TVET graduates in Gulele sub-city,
80
additional efforts shall be made to scale-up the approach in other sub-
cities, too.
BDS would also be introduced within the industrial zones established in
Addis Ababa City Administration. We have been informed that there are
about 25 industrial zones in the city.
Implementation of BDS should also be strengthened within the chamber
system and our project is ready to assist this with 15 facilitators for the City
Chambers of Gonder, Bahir Dar, Dessie, Debre Berhan and Mekelle.
BDS facilitators have to be provided with the necessary orientation with
respect to sector and chamber orientations of BDS. In addition, BDS
facilitators need to be given upgrading courses to enhance their
performance. Similarly, BDS team leaders should also get the necessary
assistance to be able to make efficient communication with facilitators and
guide them for better implementation of BDS. A training workshop for team
leaders will be held in September 2005.
81
Table 1
Overview of the 4th BDS cycle
Organization No of Facilitators No. of Businesses

Addis Ababa:
Alliance for Development 3 45
Progynist 3 60
Pro Pride (Merkato Programme) 3 15
Addis Ketema Sub-city 45 450
Gulete Sub-city 50 500
Lideta Sub-city 27 270
Seven sub-cites of Addis Abeba Administration 245 2,450
Addis Ababa total 376 3,790
Tigray:
Tigray ReMSEDA 35 350
Tigray total 35 350
Amhara:
Bahir Dar Trade and Industry Bureau 7 111
Contractor Facilitators Amhara 79 482
Amhara MSE-DD (Gonder Town) 2 20
Amhara Women Entrepreneur Association 2 30
Amhara total 90 643
Total 501 4,783
Table 2
Overview of the 4th BDS delivery cycle January to June 2005
Support activities
Business operators Gender
Organization Total by facilitators
Trade Prod. Service M F M/F Planned Realized %
Amhara MSEIDB 110 79 70 260 147 111 1 580 470 81%
Tigray MSEIDB 17 9 15 41 27 14 - 83 59 71%
Addis MSEIDB 129 131 82 342 202 118 22 751 571 76%
Pro Pride 5 8 2 15 4 10 1 39 29 74%
Progynist 11 26 23 60 10 50 - 209 181 87%
Alliance 26 12 8 46 1 45 - 89 57 64%
for
Develop
ment
Total 298 265 200 764 391 348 24 1 751 1 367 78%
Total in % 39% 35% 26% 100% 51% 46% 3% 100% 78%
82
Table 3
Type of Services provided
Type of BDS provided Number of services %

Management + Accounting 300 28.1%
Finance facilitation 219 20.5%
Marketing service 176 16.5%
Access to premises 104 9.8%
CEFE/IYB/SYB/BBS 86 8.1%
Administrative procedures 72 6.8%
Product development 28 2.6%
Association Development 27 2.5%
Business Plan preparation 24 2.3%
Raw materials/information 21 2.0%
Access to equipment 6 0.6%
Technical skill training 3 0.3%
Total 1 066 100%
Table 4
Sectors involved - Type of activity

Trade/Sales No. Production No. Services No.
Food Food processing Restaurant, bars,
104 158 grocery, tea-rooms 120
Textiles (new and second Wood works Tailoring
hand) 13 24 50
Household products and Metal works Beauty saloons
supermarkets 48 19 6
Souvenirs Textile manufacturing Repairing electronics,
13 27 machines/equipment 4
Sales of construction and Shoes and leather products Barbers
building materials 60 27 10
Leather, hand bags and Bakeries Hotels
shoes 60 11 10
Total 298 266 200
% 39% 35% 26%
Total of Trade, Production and Services: 764 (sample)
83
Annex 7
Situation analysis of selected enterprises in the region of: .........................

Name / Activity Products and Supply / Sales / Marketing Personnel Costs Problems identified by the owners
Location / Equipment services Business per month themselves and their proposals
management
....
84
Annex 8
Five-month action plan of: ..........................

Proposal for action
Name / Activity Problem identified Self-help initiative of the business operator Additional support by the facilitator or BDS provider
....
85
Annex 9
Five-month report on BDS delivery
Period: From.................... To........................
Facilitator:
Institution/BDS provider:
Date:
Name of Business Support activities identified Support activities realized Impact and remarks
(repeat the actions of your last action (only your real achievements) (reasons for failure)
plan with the same numbers)
1.
2.
3.
4.
....
86
Annex 10
Cost calculation for BDS delivery
Activities Estimated Costs
1. Staff
1.1 Salaries
1.2 Per diems
2. Training of BDS facilitators

2.1 Trainer
2.2 Training materials
2.3 Per diems
2.4 Transport
2.5 Lunch / Refreshment
2.6 Room
2.7 Others
3. Situation analysis and action planning

3.1 Stationery
3.2 Others
4. BDS implementation
4.1 Transport
4.2 Stationery
4.3 Photo documentation
4.4 Telephone and communication
4.5 Others
5. Monitoring and Evaluation

5.1 Costs of field visits by follow-up men/women
5.2 Photo documentation
5.3 Other costs
Total costs
87
Annex 11:
SWOT analysis for impact monitoring

Weakness and Strengths of the CEFE and BDS organising institution
This table is to be discussed and filled by former CEFE participants and BDS beneficiaries
Strengths Weaknesses
(internal positive factors to be capitalised on) (internal negative factors to be eliminated)
Opportunities Threats
(external positive factors to made use of) (external negative factors to avoid/consider)
CEFE entrepreneurship training:

Did the start-up participants create their business by the help of CEFE training or not?
Did the business owners solve their problems by the help of the CEFE training?
Did they stabilise their business (e.g. business has run all legal procedures) or improve
their income?
What are insufficiencies to be eliminated?
What can be improved?

Did the BDS support help to improve the business (e.g. diversified products/services,
premises secured, savings increased) or increase the income?
What are insufficiencies to be eliminated?
What can be improved?
88
List of Publications for Business Development

Start and Improve your Business
Identification of viable business ideas, market and supply analysis, steps of business implementation, write a
business plan, organise business management, follow up and improve your business, evaluate sales,
improve and diversify products, expand business premises and equipment, how to start your business in the
construction sector.
Marketing Strategies for Micro, Small and Medium Enterprises

Marketing problems faced by Ethiopian businesses, marketing strategies for businesses in Ethiopia,
managing prices, product development and promotion.
Trade Fair Participation and Export Guide

Guidelines for trade fair organizers and participants, export procedures, export business registration and
licensing, Ethiopia's external trade statistics, quality export products information.
Business Planning
Business planning for micro, small and medium enterprises: personal data, equipment owned and to be
purchased, work premises at the disposal of the business, yearly production/service plan, yearly raw material
requirement, yearly sales plan, yearly operating expenses, yearly profit and loss statement.
Accounting and Cost Calculation Manual

Manual cash book format, electronic cash book format on Excel basis, records on maintenance services,
receipt formats, sales on credit format, raw material inventory, profit and loss statement, explanation to the
profit and loss statement, cash flow statement, accounting software available in Ethiopia, software providers,
training courses in accounting and bookkeeping, cost calculation, identify cost components, calculate
variable and fixed costs, calculate total cost per unit, how cost calculating improves your business.
Loan Conditions of Commercial Banks and Micro-Finance Institutions

Loan conditions in Ethiopia: loan types, loan terms, purpose of loan, re-payment schedule, type of
collateral, loan criteria, eligibility.
Improve your Business Association

Needs assessment of your members, situation analysis overview, action planning, implementation of
services, contacting partners, fundraising, association regulations and bylaws, membership fees and
accounting, cash book format for associations, how to present your association
Standards and Quality in Ethiopia

What is a standard? Why standards? How are Ethiopian standards developed? International relations,
inspection and certification: Conformity assessment, testing, product certification, what is metrology?
Investment Guide
Business environment, investment opportunities, investment conditions, costs and skills, labour regulations,
infrastructure, taxation and incentives, business organizations, organizing a private business investment,
ownership, investment protection.
Taxation in Ethiopia
Types of direct and indirect taxes, categories of tax payers, declaration of income and assessment of taxes,
tax incentives, tax problems
Publications on sale by Mega Book Store, Book Depot and the Chambers of Commerce
89

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Ethiopian Business Development Services Network (EBDSN)

Toolkit for BDS Facilitation

Addis Ababa 7/2005

Addis Ababa 7/2005

Project implemented by:

July 2005, Addis Ababa, Ethiopia

1. Demand-driven Business Development Services (BDS) ............................................... 3

2. Training Workshop on BDS Implementation ................................................................ 31

3. Next steps to BDS Implementation ............................................................................... 39

Annex 1: Training of trainers workshop programme ...........................................49

AWEA Amhara Women Entrepreneurs Association

Chapter 1 provides an introduction to BDS in general and to our approach Demand-driven

1.1 What are BDS?

Some examples of BDS include:

1.2 Demand-oriented services

1.3 Criteria to select businesses for BDS

Example of Commercial Bank of Ethiopia (CBE)

Selection of businesses on grounds of practicality:

1.4 Implementation methodology

Situation of selected enterprises in.....................................

Please refer to the example of a situation analysis on the next page

First five month action plan of......................................................

Name / Activity Problems identified Proposal for action

Please refer to the example of an action plan on the next page

Name / Activity Problem identified Proposals for action

1.5 Strengths of a participatory BDS facilitation approach

1.6 Developing a commercial BDS market

Outlook: A gradual approach towards BDS market development

Nevertheless, it is still a long way to go to long-term sustainability and a fully commercial

1.7 Costs of BDS implementation

1.8 Business Development Services for medium and large enterprises

Number of Businesses supported

CEFE entrepreneurship training:

Support provided for by the BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

Support provided for by BDS facilitator:

2.1 Action-oriented training methodology

2.2 Capacity building on the demand-driven BDS approach

2.2.1 Introduction by means of photo documentation and PowerPoint presentation

After the photo-based introduction, a general reflection on the demand-driven needs

The participatory demand-driven BDS approach is based on the following principles:

The implementation steps involve:

Regular visits to businesses

Situation analysis and action-planning

Evaluation and documentation

Communication and Visualisation

2.2.2 Introducing situation analysis and action-planning

2.2.3 Field visits to businesses

Lessons learnt on field visits:

2.2.5 Management tools for facilitators and organisational development

2.2.6 Introducing the BDS Network webpage

The above-mentioned webpages also contain information on approaches, methods, lessons

2.2.7 Distribution of BDS formats and workshop report

Final evaluation of the BDS workshop

2.3 Preparation for a five-day BDS training for facilitators

Tasks of the trainer to be undertaken before training:

Tasks of the trainer - first day: