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Introduction
The problem at hand and Evaluation of Methodology
Strategic planning Access to capital Other problems Overview of BPC impact study and results
Who we are
Background
The role of entrepreneurship in poverty reduction
Next Steps
Results Lessons learned Beyond BPCs
Q and A
Empower people in the developing world to build businesses that break the cycle of poverty Work in more than 30 countries throughout Latin America, Africa and Asia Founded in the U.S. in 1968 2009 revenue of $50M Obtain funding from diverse sources including U.S. and foreign government agencies, multilateral organizations, corporations, foundations and individuals
3
SME Promotion effort created in six countries in 2008 with MIF grant. Replication in Africa in 2010.
6
Agenda
The problem at hand and Evaluation of Methodology
Strategic planning Access to capital Other problems Overview of BPC impact study and results
Who we are
Background
The role of entrepreneurship in poverty reduction
Next Steps
Results Lessons learned Beyond BPCs
Q and A
2,502
MSE
TNS Focus
Micro
1999
2004
2007
* In terms of number of people living on less than $8/day Source: Universidad de los Andes
2,502
Despite strong entrepreneurial activity in Latin America, the region lags in Business Development Training
Overall Entrepreneurial Activity L.A.C. Business Development Training
Europe
North America
Others
Source:
10
Entrepreneurship in L.A.C.
Agenda
The problem at hand and Evaluation of Methodology
Strategic planning Access to capital Other problems Overview of BPC impact study and results
Who we are
Background
The role of entrepreneurship in poverty reduction
Next Steps
Results Lessons learned Beyond BPCs
Q and A
12
Implementation
Innovation
New Focus
Adjustment
New Focus
Reformulation
M and E
Conclusions
Provide practical Selection based on training for creating a quality of business useful business plan plan
Selection
Winners
Key Questions
Is our selection process effective? Are we attracting strong applicants? How can it be improved?
Research plan based on 4 interns administered previous study by Harvard survey over phone Professor Bailey Klinger and Reached out to each person other academic papers multiple times at different Survey designed based on times of the day, both via input from senior phone and email TechnoServe team members Each survey checked by Interns thoroughly trained supervisor. Data double checked and compared with previous surveys
Results
Survey efficiently designed with study goals and methodology in mind Interns prepared
Dataset
590 entrepreneurs surveyed: 60% participants, 40% non-participants Almost 85% of the people we spoke to completed the survey
Sector Company Information Annual Sales (by year) Annual full time and part time employees (by year) Demographic information (age, education) Entrepreneur Information Previous companies founded Other companies founded after competition (including sales, employees, capital raising, formality)
Capital raised (by source, before and after BPC) Level of formality Year and reason for failure
16
Notes on Analysis
Multiple regression and other analyses confirm a strong impact, even controlling for selection bias
Series3 Strong impact also seen in 1-year Series2 sales growth, capital raised, initial Series1 success, new business survival rate and rate of formalization
rain
Imp
act of T
Impact of Training
Key Insights
Non-Participants
Participants
(a) Based on multiple regression analysis, controlling for age, gender, year, country and selection bias. Other factors include these variables as well as unobserved differences.
Notes on Analysis
Neither multiple regression nor other methods found a significant impact of phase I, BUT data set is small and selection bias exists Series3 Impact of Phase I not other KPIs
Series2 Series1 found across
$8,000
$6,000
Key Insights
$4,000
$2,000
The impact of training is not statistically significant at a 95% level. This means that there is a very good chance that it does have an impact.
Non-Participants Participants Not Accepted as Finalists
$0
(a) Based on multiple regression analysis, controlling for age, gender, year, country and selection bias. Other factors include these variables as well as unobserved differences.
Phase II (Business Plan Improvement) and the Prize Awarding Have a Strong Impact
Impact of Training on Sales Growth(a)
2-Year Sales Growth ($) $50,000 $45,000
:2 53 %
Notes on Analysis
fP ha se
II T
rai ni
Regression analysis, controlling for age, gender, country, year, selection bias shows strong predicted impact, even controlling Series3 for effect of prize Series2
Series1
ng
Impact of Training
Im
pa ct o
The second round of training combined with the possibility of the prize has a significant impact on business success and growth
Finalists
(a) Based on multiple regression analysis, controlling for age, gender, year, country and selection bias.
Notes on Analysis
Results robust through a variety of techniques and across other KPIs Selection bias is not controlled for Series3 due to a small sample size
Series2 Series1
f Pr
ize :
483
act o
Key Insights
Impact of Training
The prize is a major advantage, however we could not test the impact of the prize without training. Focus groups and 1-on-1 interviews suggest that the prizes impact was multiplied by the training.
(a) Based on multiple regression analysis, controlling for age, gender, year, and country. Selection bias is not controlled for as all finalists are assumed to be of high-quality.
Imp
78,154
Se
The BPCs also had a Strong Impact on Success and Survival Rate
Self-Described Success Rate (1) 2 Year Survival Rate (2)
Impact of BPC
(1) Answer to the question were you successful in founding or expanding your business? (2) Only includes new businesses.
Agenda
The problem at hand and Evaluation of Methodology
Strategic planning Access to capital Other problems Overview of BPC impact study and results
Who we are
Background
The role of entrepreneurship in poverty reduction
Next Steps
Results Lessons learned Beyond BPCs
Q and A
24
Improvement from 2008 and on Incorporated psychometric testing in collaboration with Harvard University Introduced psychological interviews and panel presentations Introduced 1 year aftercare
Allowed assertive segmentation of the groups Provided means to continuously follow-up Created practical approach and short term results
Developed pilot to focus on training for extra 6-12 months in market linkages and access to capital
To improve the primary selection we collaborated with Harvard Universitys CID in 2008
2008-2009 Winners of Colombia, Peru, Chile, and Tanzania competitions were given 90 minute test to assess personality and intelligence First selection participants in Ecuador competition pilot tested to provide data for first selection 2008 Psychometric test given on-line to +20 participants per country Results used to fine tune test Test reduced to 1 hour given on paper 2009-2011
Review the BP and make it achievable Quantify real economic needs Undertake in depth financial training Communication and network access practice Create environment for entrepreneurs to develop strategic partnerships with suppliers, clients, and capital providers Build a commercial, milestone based plan in order to encourage sales generation Build a realistic approach for the use of resources Identify real capital needs
Specialty Training
Alliance Development
Marketing Plan
Investment Plan
PILOT PROGR
Build market relations ending in real contracts Begin efforts for export Obtain capital and recurrent relationships
18% 3%
36%
Regular Participants
COLOMB
Business Leaders
72%
57%
69%
28%
43%
31%
The new model will provide access to capital and markets to promote rapid growth: Business Accelerator
Financial planning accounting Rationalization of capital needs Intro to capital sources Help with negotiation
Access to Capital
Growth
Access to Markets
Market linkages Market info Marketing training Market niches Specific issues (packaging)
Agenda
The problem at hand and Evaluation of Methodology
Strategic planning Access to capital Other problems Overview of BPC impact study and results
Who we are
Background
The role of entrepreneurship in poverty reduction
Next Steps
Results Lessons learned Beyond BPCs
Q and A
33
Appendix
35
g: 1 40%
$6,000
$80,000
$5,000
$60,000
$3,000
Imp ac
$40,000
$20,000
$2,000
$1,000
$0 ($40,000)
(a) Based on multiple regression analysis, controlling for age, gender, year, country and selection bias.
Imp ac
$4,000
t of
Tra
t of
T ra inin
inin
$57,333
Training appears to have had the greatest impact amongst young businesses
$15,397
$23,669
Participants
Non Participants
Participants
Analytical Notes
Key Takeaways
The difference in sales growth is statistically significant The pattern holds across other KPIs, although not always statistically significant
It appears that among existing businesses, the youngest ones have the greatest potential for impact
(a) The younger participants are heavily influenced by one entrepreneur with two-year sales growth of $760,000. The difference holds, but is smaller, when he is excluded.
Non-Participant Average $3,738 $5,925 0.48 0.77 $8,173 30.4% 50.0% 76.2%
Participation 110% *** 146% *** 39% 18% 172% *** 42% *** 73% ** 22%
Phase II 333% *** 253% *** 2% 58% * 224% *** 81% *** 22% (11%)
2-Year Survival Rate (Only New Bus.) Rate of Formalization (Only New Bus.)
84.5%
Based on multiple regression analysis that controls for age, gender, country, year, and selection bias. *** 99% confidence; **95% confidence; *90% confidence. Phase II includes impact of prize. Refers to the question: Did you succeed in establishing or expanding a new business? Percent of new businesses founded that were formally constituted before the authorities.
SMEs trained
SMEs that operate with BPC SMEs that obtain financing through BPC Increase in revenue from SMEs
MM.
Jobs created
EXAMPL
3
Entrepreneurship Convene efforts to attract entrepreneurs with ideas or existing businesses Through competitions, large number of entrepreneurs convened, trained and reduced in order to provide support
Aimed at promoting productive business ventures to improve livelihoods in a specific area A small number of existing agro-producers or suppliers promoted to become rainmakers
Economic
Wellbeing
Create business Improve quality of Convey knowledge training and know- life through self to the community how assurance
Capability
Obtain respect from others Develop close ties Promote with business community environment integration and growth (gender)
Relational
Business Opportunities
Local Community
Thank you