Ethiopian BDS Network

All about Theory and Practice of Business Development Services (BDS)
and revised paradigms

Everybody is speaking about "BDS", but what is it? What are the main paradigms? How does it work in practice? What is demand-driven BDS? In the following you will find the answers in our collection of BDS documents for download. In contrast to the initial rigid "full-commercial BDS approach" of 1998/2002 focussing exclusively on commercial BDS providers and considered as a binding law by many donor agencies, you will find our new revised 2003-2006 experience of mixed private sector development interventions including commercial BDS providers as well as self-help business associations and chambers of commerce, NGOs and public support institutions. We don't need any monopoly in private sector development strategies but diversity and competition of different approaches!

Committee of donor agencies for small enterprise development, Washington 2000
Business Development Services for Small Enterprises: Guidelines for Donor Interventions bds-guidelines-bluebook.doc 117 KB

Contents: Vision and scope of BDS; actors and their roles; outreach and sustainability; BDS market assessment; demand-side and supply-side interventions; delivery and payment; subsidies; role of BDS facilitation; evaluation.

Miehlbradt/McVay,Turin 2002
Seminar Reader. Developing commercial markets for BDS

Contents: What is BDS? The market development paradigm; market assessment; separate roles of provider and facilitator; tools: sub-sector analysis, demand analysis, test marketing, rapid appraisal, market overview, consumer survey, supplier interviews; fee for services; Strategies: voucher programs, consumer information, clustering, business linkages, product development; performance measuring. bds-reader-turin-2002.pdf 1,12 MB

Dr. Wolfgang Schneider-Barthold / Antonia Irwin, Munic 2002
The revised BDS paradigm. BDS for all categories of enterprises

"The level of business development services (BDS) provided depends on the type and stage of development of the enterprise. The standard provision of BDS through donors or the state fostered a favouring of the upper markets by service providers neglecting the needs of small and micro enterprises. The growing recognition that each level provides a valuable source of growth for an economy has underpinned the need for another shift in paradigm. The services need to be flexible, reflect accurately development needs and when necessary be provided for free."

Content: Market simulation instead of stimulation? Constraints of voucher schemes.

voucher bureaucracy and market distortion by subsidies; alternative BDS market stimulation instruments: strengthen collaboration between banks and BDS; use brokers for advertizing; capacity building measures for BDS providers; criticizing the "full commercial BDS approach"; "BDS" versus "Self-help"; why should commercial providers be more sustainable than NGOs, self-help organisations and public institutions? bds-revised-2005.doc 101 KB

Why Micro and Small Enterprise Owners do not want to buy BDS Services?

Most of the business consultants are targeting medium and large enterprise because of lack of capacity or willingness of micro and small enterprises to pay for management services with rather medium and long-term impact. Marketing to a great number of individual enterprises is a really difficult approach and even ineffective for most of the consultants. That is why intermediary organizations like NGOs, development projects and public institutions are financing most of the assignments for business advice and training to micro and small enterprises. Note, that it is not evident that “good services will find their market”. If the low-level segment of the business community, the micro and small enterprises, are operating on a day-by-day basis without the necessary medium or long-term resources for indirect business development such as managerial training, then even down-sized services will be difficult to sell and the acquisition work to this segment of the consultancy market would be pretty time and cost intensive.

Micro and small enterprises do not have a diversified division of labour and management like medium and large enterprises. Medium and large enterprises are organized in various divisions like staff management, supply management, sales management, accounting, and top management. Most of these divisions have their own budget for short-term and long-term interventions. A sole business owner has to spend his “own personal” money, but a manager of a medium enterprise spends the “anonymous money” of his department. Thus, trainings and consultancies can better be sold to medium and large than to micro and small enterprises which run their activities with a personal day-by-day budget. That is why MSEs want to see immediate impact which is normally not the case with medium and long-term impact of management trainings.

Based on the revised BDS approach we developed a mixed approach including commercial BDS providers, non-for-profit NGOs, local municipalities and public institutions with 500 BDS facilitators and more than 9,000 enterprises supported per year.

See also the example of Business Development Services provided by the Bahir Dar Chamber of Commerce in our last BDS Newsletter 12.

MSE Development Project, Addis Ababa 2005
BDS in Industrial Zones of Addis Ababa bds-in-addis-clusters.ppt 360 KB (Powerpoint)
21 BDS facilitators are working in 7 industrial clusters of Addis Ababa. Clusters are industrial zones with economically linked enterprises of one sector, e.g. producing and trading textile enterprises or interlinked sectors like wood, metal works and construction.

MSE Development Project, Addis Ababa 2005
Support on Self-Employment of technical School Leavers
pilot-scheme-graduates-7-05.doc 825 KB. 36 unemployed technical school leavers have been supported in a six-month period to start up three enterprises in the construction sector.

Dieter Gagel, Tunis, 2001
Needs assessment and action planning for BDS in Tunisia (French language)
tun024.doc 950 KB. Together with the Tunisian Manpower Agency, a three-month BDS
follow-up of business start-ups has been organized in all regions of Tunisia.

Dieter Gagel, Mali 1998
Needs assessment / action planning for BDS with crafts associations in Mali (French)
tableau-de-situation.xls 30 KB + plan-d-actions.xls 25 KB. Together with the National Federation of Artisans and Crafts of Mali (FNAM) 450 associations with more than 20,000 members have been supported from 1995-2001. Today FNAM has a sustainable BDS facilitation structure of its own.

Ethiopian BDS Network, Addis Ababa 2004
Success Stories on Business Development Services bds-success-stories.doc 650 KB
BDS success stories on tailor workshop, metal works, edible oil mill, mini supermarket, juice and pastry, traditional dress, food and spices, video and computer services, hollow-block production, car wash, weaving and retail shop.

All Handbooks on Business Information Services (Taxation, Business planning, Export and Trade fairs guide, Marketing, Accounting and cost calculation, Standards and Quality) are available for download on www.start-your-business.net/documents.html

Action-oriented business development in Tanzania, Mali, Mauritania, Niger
and Tunisia www.action-research.de