effective business counselling for microenterprises
DESCRIPTION
Presentation for Effective Business Counseling for Microenterprises by Crispina B. AlmonteTRANSCRIPT
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EFFECTIVE BUSINESS COUNSELINGFOR MICRO ENTERPRISES
(EBC)August 14 – 18, 2006
Marco Hotel, Cagayan de Oro
Ms. Crispina B. AlmonteResource Speaker
DTI - CARP
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SCOPE
Introduction to EBC Competences needed Definitions Framework of the course Self-Assessment Exercise Counseling a change process Principles of counseling
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MODULE 1
INTRODUCTION DEFINITIONS IMPORTANCE/SIGNIFICANCE OF
OUR WORK SELF ASSESSMENT GENERAL COMPETENCIES
NEEDED
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Competences Needed for EBC and Why We Need to Master
ChangingSTEEP
Globalcompetition
ChangingEBC TOOLS
National Eco.Goals
Survival Issue
Module 1
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Competencies and Skills
Self Mastery
Enterprise Mastery
Situation Mastery
Exercise PersonalCompetence
Communication Competence
Understanding Role- Scope SBC
Conduct Business Analysis /Planning
Assess Client’s Competencies
Facilitate Clients Devl’mt -Capabilities
Capacity
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What is EBC What is EBC ? ?
Help in planning or implementing a task or a series of task,
consultant is not actually responsible for the task itself assisting those who are.
Change process. dynamic, interactive, and progressive 3Es and 3Rs, 3As
Work begins with: condition that is unsatisfactory and condition in which a change for the better has taken
place.
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What is What is EBC EBC
Partnership process entrepreneur (with a problem) and the
counselor (with access to solutions) agree to come together.
Limitations (time, competence, cost, scope of work)
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1. Knowledge of principles and conditions for counseling. no knowledge 1 2 3 4 5 6 7 thorough knowledge
2. Skill in assessing Client’s needs.no skill 1 2 3 4 5 6 7 competent
3. Skill in setting objectives of the engagement.no skill 1 2 3 4 5 6 7 competent
4. Skill in planning and designing an assistance plan.no skill 1 2 3 4 5 6 7 competent
5. Skill in selecting appropriate methods and techniques.no skill 1 2 3 4 5 6 7 competent
How Prepared Are You?How Prepared Are You?
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6. Skill in oral communication.no skill 1 2 3 4 5 6 7
competent
7. Skill in written communication.no skill 1 2 3 4 5 6 7
competent
8. Skill in planning and designing a strategic or improvement plan.
no skill 1 2 3 4 5 6 7 competent
9. Skill in preparing and using prescriptive techniques in business operations.
no skill 1 2 3 4 5 6 7 competent
10. Skill in preparing a report.no skill 1 2 3 4 5 6 7 competent
Continuation
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Assessment Score
7 statements with
ratings 7
You have the mastery needed for EBC. Pack your things and go back to work
7 statement with rating below 7 but not 4
This is a reinforcement training for you
7 statements below 7 not 4
This is a review and confirmation training for you
All statement above 4 This a course is for you
7 statements below 4 This is the training for you and you must apply learnings right away
5 statements or more with 4 rating
You do not know yourself
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WHY ARE COUNSELORS ENGAGED?
Impartial third party viewpoint
Provision of specific knowledge and expertise/skills
Source of intensive professional attention on a short term or temporary basis
Provision of arguments to justify course of action
Render professional advice through the use of new technology and/or approaches
WHY ARE COUNSELORS ENGAGED?
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SITUATIONS
Counselor is put in a
SITUATION NATURE OF ACTION
Assess a company’s condition perceptive
Rectify a deteriorating condition corrective
Improve an existing condition progressive
Improve / introduce new concepts innovative
Create a totally new situation creative
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CONSULTING AS CHANGE PROCESSPlanned Changes Agreed Upon by You and Client
Personal/ Behavioral
• Enhanced values & attitudes
• Improved human relations skills between entrepreneurs & employees
• Organizational Change
Technical Competencies
Operations Acquisition of new
technologies Expansion and/or
diversification Productivity tools Quality tools
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Fundamental Questions to Ask in EBC Fundamental Questions to Ask in EBC The 6-WH Principle / 3Es and 3RsThe 6-WH Principle / 3Es and 3Rs
WHY is it important or necessary/ implication?
WHAT are critical assessment areas to do?
WHEREthe work will take place?
WHEN will counseling happen?
WHOM – to whom is engagement for?HOW - approaches/methods/tools/ techniques used
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Knowledge of oneself will lead to self improvement
Goal of EBC Not JAH = But PAWOL
knowledge
Attitudes
Skills
GROWTH AND SUSTAINABLITY
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kk = necessary for the solution of practical economic, social, political and personal problems
A = behavioural change AIVS, positive direction, sustainability
S = Intellectual and technical competence
Oral and written communication skills. Analytical mind to formulate good alternatives. Provide good judgment, objectivity of advice to clients
J U S T B E S M A R T
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ROLES & RESPONSIBILITIES ROLES & RESPONSIBILITIES OF SME COUNSELORS ?OF SME COUNSELORS ?
TO BE AN EBC? TO BE AN EBC?
MODULE 2
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Competence Framework
SELF MASTERY (In KASH)
SITUATION MASTERY (Client)
ENTERPRISE MASTERY (In MPOF)
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The SBC as Change Agent KASH = KAIO
You KASH
K
A
I
O
Client DIFFICULTY
INVOLVED
T I M E I N V O L V E D
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As a development worker
As a professional counselors,
As extension officer provides
THE ROLE AND SCOPE OF WORK OF A COUNSELOR
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ROLES: Field/ Extension Officers Small Business Consultants Small Business Field Officer Small Enterprise Consultant Diagnosticians/ Fact Finder Industrial Counselors Teacher/ Educator/ Facilitator /Confidante Coach / Advocate Change Agent
TASKS: Promotion Continuing Education Mgn’rl /Tech Assistance Catalysts/ Initiates Linkage / Network Process analyst /specialist Information disseminator Negotiator / Go between Administrative work Monitoring and Evaluation
Business Counselors Take On Business Counselors Take On
Diverse Roles And TasksDiverse Roles And Tasks
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Business counselor takes on Business counselor takes on diverse roles and tasksdiverse roles and tasks
ROLES
Change Agent
Counsel /Coach
Educator
Facilitator
TASKS
Behavioral
change Improve
administration Provide
knowledge Negotiate for
change
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First visit will not end with a contract. Establish rapport with the client. Determine if potential client is motivated to change.
Trust
Capability
CLIENT
Right traits, good character, and Professional skills.
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Motivated towards service
Wants to share knowledge and skills
Honest or truthful
Give positive criticism
Good physical and mental health
Projecting self-confidence and skills
Possessing Etiquette and courtesy
Independence of mind
Psychological maturity
TRAITSTRAITS
RequiredRequired
1.2nd
Personal and Professional Traits
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SMALL BUSINESS COUNSELORS COMPETENCIES
General Areas and
Core Competencies and Skills
MODULE 3
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SITUATION
MASTERY
Conduct Business
Analysis and Planning
(A)
SELF
MASTERY
EXERCISE PERSONAL
COMPETENCE
(B)
EXERCISE COMMUNICATION
COMPETENCE
(C)
ENTERPRISE
MASTERY
ASSESS CLIENT’S
COMPETENCIES
(D)
FACILITATECLIENT DEV. &COMPETENCIES
(E)
ENTERPRISE
SITUATION
ASSIST IN THE IDENTIFICATION OFCLIENT & PROJECTNEEDS /SOLUTIONS
(F)
(G)
ASSIST CLIENT IN FACILITATING &
INTERPRETING THE BUSINESS PLAN
MASTERY
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At the beginning of the engagement: active listening. Analytical Thinking interpersonal skills Communicate well / Manage time well
During the engagement professionalism in delivering your commitments. interpersonal relations with client and employees, as well as
with investors/funders. analytical & problem solving ability. ability to synthesize, that is, the ability to look ahead, relaying
to your client, and developing your client’s skill to plan. confidentiality forms the core of professional traits. Learn the skill of limiting engagements.
Special Skills Needed At Different Stages Of The Engagement
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Towards the end of the engagement
conveying the message to the client and employees in such manner that they see clearly the cause(s) of the problem(s) and the concomitant factors that will affect operations.
increased capacity to handle pressing issues of a similar nature.
feedback without making the client feel inferior
client’s behavior not his business.
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Expectations from SBCounsellors/ Code of Ethics
Objectivity in their dealings Technical know-how Honesty and Sincerity Constructiveness in criticism Demand for quality and efficiency Respect commitment Avoidance/ Minimization of failure Maintenance of confidentiality Plan for contingency/safety nets Plan for length of engagement
PROFESSIONALISM
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Public interest . Integrity Objectivity
APEC TRACE : Principles of Professional Conduct
Independence Confidentiality Competence and due care Ethical behavior Credibility Professionalism Quality of service Confidence
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MODULE 4
Understanding the Client-Entrepreneur
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The Client
The Environment
PRESENTATION
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The more clients encountered, the better you will gain insights in assessing clients, his personality, and aspirations.
Major concern is that at the end of the contract, the client
is in a better position and can do better.
leave him exhibiting attributes of a successful entrepreneur
have exhibited good business sense
has the drive for growth
Before you accept/enter into an engagement, have an accurate reading of your potential client
Review of his environment
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IMPORTANCE OF DEVELOPING SMEs
SMEs are seedbeds of entrepreneurship and means of discovering latent talent
Play a vital role in regional development, decentralization and rural growth
Provide such resources as capital in entrepre-neurship and skills in managerial know-how
Small factories / plants play a vital role in regional dispersion of economic activities
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Provide means of creating employment opportunities at relatively low capital cost
Facilitate the mobilization of capital resources for productive ventures
Resource-based industries particularly those utilizing indigenous materials can be expected to generate foreign exchange thru export activities
Help build an industrial climate and a private sector in the society
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EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
Strengths Weaknesses
ThreatsOpportunities
the National Plan was crafted to promote SME
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Increase of SME from 8.7% to 12 % of total
MSME
32,000 new S&M
GVA increase from32% to 40%
SME Development Plan : Three-year objective
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Local
government
BanksAnchor
Firms
Investors
Civic
Sector
The Players in Local Economic Development
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BASICSTRATEGIES
Integrate SME DevtPrograms
NGA directed Projects /Activities
Localize the plan
Strengthen /operationalizeSME Centers
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FINANCING
MARKETDEVELOPMENT
ENTREPRE-NEURSHIP TRAINING
TECHNOLOGY INTERVENTIONS
ADVOCACY FOR ENABLING
ENVIRONEMNT
NEEDSNEEDS
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BARRIERS TO SME BARRIERS TO SME GROWTH
ENTRY economies of scale, government industrial policies and implementation, infrastructure, access to opportunities
SURVIVAL general environment,competition; foreign exchange; macro policies
EXIT labor contracting, inability to compete under a globalized market
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REQUISITES FORREQUISITES FOR SUCCESSFUL ENTREPRENEURSHIPSUCCESSFUL ENTREPRENEURSHIP
ENTREPRENEUR with his motivated team
Technically sound and marketable ideas
Thorough venture analysis and good business planning
Equity and reasonable financing
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A good client is one who is highly motivated and possesses some knowledge and/or
skills needed in the business, be it in manufacturing, trade or service.
The entrepreneur is a doer and is action-oriented.
Let us see what takes a successful entrepreneur
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Achievement drive
Adaptability
Independence
Decisiveness
Energy
Entrepreneurial
Growth Motivation
Intuition
Opportunity-seeking
Perseverance
Risk tolerance
Social Skills
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STRENGTHSSTRENGTHS
Ability to have good relationship with their publics
Determination to maintain highest quality for products
Marketing through known & successful marketing organization
Use of subcontractor for specialized work & additional capacities
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WEAKNESESWEAKNESES
No clear strategic direction Diminishing number of skilled workers Insufficiency of operating capital Below average marketing skills
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Enter new markets or segments
Add product lines Diversify into related productsAdd complementary products Vertical integration Faster market growth
OPPORTUNITIESOPPORTUNITIES
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Resistance of workers to new systems High cost of money Adverse government policies and
procedures Entry of new competitors Changing buyers’ needs and
preferences Advances in technology
THREATS
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The client’s motivation for growth is usually accompanied with the drive to make things happen.
The client’s alertness of potential product/service innovations and markets and ability to seize opportunities, convert them to sales, and ensure repeat orders.
“Gut feel” could be traced to his knowledge of the industry.
The entrepreneur knows that his products/services have distinctive features/characteristics. He perseveres to improve his products and services by exploiting every opportunity to do so.
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The client makes hard decisions to the point of self-sacrifice
Delegates some authority to employees firstly because he is not everywheresecondly, decision-making should be at all levels thirdly, he is not forever in the pink of health.
Can tolerate minor mistakes (committed once) and be able to point these things to the decision-maker(s).
Must possess interpersonal skills to make things happen without sacrificing innovation and adaptation.
Must be able to correct and/or introduce change in spite of resistance.
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EFFECTIVE BUSINESS CONSULTING and THE CONSULTING PROCESS
Module 4
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Coverage
Client development scale
Business consulting styles
Personality types
Communication Styles
Behavioral role of a counselor
The consulting process
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PHASE ONE: MAKING THE FIRST CONTACT
When a prospective client approaches the counselor, the client recognizes that he has limitations
When a counselor makes the first move, it can be misconstrued differently. The move may be perceived as motivated by other considerations.
the first meeting is usually a “getting to know you” session.
2nd
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Conduct a preliminary fact-finding activity especially when no prior relationship exists.
Both parties must agree on the scope of work.
Duration should not exceed three work days for small enterprises
Client to must make available some base documents and authorize the interview with key persons in the company.
Counselor familiarize with the operations
Prepare counseling proposal
2nd
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Technical proposal details the intended work and general approach (Inception Report).
Counseling team is identifying the persons who will form the team and their respective areas of responsibility and the delineation of the role of each one
Resume of the team wherein the team’s counseling experiences in similar businesses are enumerated.
The financial proposal may be a separate document where details on the cost of doing the work and the timetable are presented.
Parts of a Proposal
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Engagement agreement preparation in the form of one of the following
Letter of agreement
“Conforme” or an “I accept” line in the letter
Formal contract
Memorandum of agreement (MOA)
Verbal agreement which is a result of a previous relationship
Contract writing is sometimes considered an awkward step for the client and government-employed counselors but it should be done.
Formalizing the Relationship
2nd
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The owner/investors of the business must spend time for meetings and interviews.
Top/key persons participation
Employees are informed
Culture and biases of the firm
Organizing the Work
2nd
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In an interview the counselor should prepare his/her questions to ensure accurate responses and optimize time.
After the interview, the notes are read to the interviewee to confirm responses.
Observe meetings, operations and any interaction considering interpersonal and intra group relationships. In meetings, observe the following:
o Presence of agenda
o Mode of discussion
o Any dominant personality respected? Abrasive? Etc.
Data-Gathering
2nd
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Accountability
Limitations and potential constraints
Quality time of the client due to family affairs, participation in organizations, etc.
Potential constraint like holidays, access to confidential files/information
Client’s personal views
The WORK PLAN must answer the following: WHAT is to be done? HOW will it be done? WHERE will it be done? WHEN will it be done?
WHO will do WHAT, WHEN, WHERE and HOW
Steps 2.6 Consider Other factors
2nd
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At this stage the counselor is guided by the task question
Where is the firm now? What seem to be the problem (s)? What are the causing the problems Where does the firm want to go?
Analyze the Client & the Business
PHASE THREE: DIAGNOSINGPHASE THREE: DIAGNOSING
2nd
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Results-oriented
Specific as to accountability and time
Measurable in terms of quality and quantity
Realistic and achievable
Challenging and stretching
Inclusive of constraints or conditions imposed by manpower, money, material, time & other forces
Within the control of the person who is accountable for its achievement.
Develop the Goal
2nd
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Formulating an action plan to solve a problem
Developing at least three alternative ways of achieving a goal
Present to your client decision-making techniques,
Reiterate the desired situation or goal, and then allow her/him to make choices.
For clients with good computer skills encourage the use of software to facilitate decision-making.
Decision-making
2nd
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PHASE FOUR: WORKING THE PLAN
Implementing the Plan
2nd
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Break the Activities into Smaller Tasks
Use WH Principle
WHAT is to be done?
HOW will it be done
WHERE will it be done
WHEN will it be done2nd
Why is this to be done
For Whom is activity Intended
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When a deviation occurs, let the client learn how to solve problems.
Observe how the client reacts and corrects the deviation
When milestones or targets are met, there is reason to celebrate.
As problems are solved make the client feel like a winner.
Observe client and implementation of plan
2nd
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PARTS OF THE REPORTPARTS OF THE REPORT
Executive summary Body of the report must be planned both in
substance and style. Contents of the main report should have a
logical sequence Amplify the contents of the executive
summary in the main body of the report. Tabulations, matrices and graphical
presentations are encouraged. 2nd
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“Write to express not to impress.”
Writing style must be simple and in short sentences.
Writing style can also mean the use of bullets and numbers.
WRITING STYLEWRITING STYLE
2nd
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MODULE 5 Counseling /Consulting PROCESS
PHASES IN CONSULTING
PROCESS
KEY PROCESESINVOLVED
STEPS IN THE PROCESS
ROLES /STYLES
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General Phases of the SBC Process
Pre-Work Entry SeparationWork
Getting Ready /Mobiliza
-tion
Consultant explores & develops a
working relationship w/ client
Consultant –
Client agree to
work with the problem
& its solution
Consultant
decreases level of
involvement and ceases
engage-ment
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Five-Phase Model of the Small Business Counseling Process
1
2
3
4
5
Entry
Diagnosis
Action planning
Implementation
Termination
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Five-Phase Model of the SBC/ Consulting Process
Entry
Diagnosis
Action planning
Implemen-tation
Termination
Planning the workWorking the plan
Goal setting & decision making
Diagnose client situationEstablish win-win situation
Making 1st contact with client
Evaluation and termination
1
2
3
4
5
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ACTIVITIES INVOLVED
Entry Point Diagnosis Action Planning Implementation Termination
• 1st contact with client• Preliminary problem diagnosis• Assignment planning• Assign. Proposal to client• Consulting contract
• In-dept Fact Finding• Fact
analysis and
synthesis• Detailed problem exam.
• Detailed problem examination
• Developing solutions
• Evaluating alternatives
• Proposals to clients
•Planning for implemen-
tation
•Assisting with
implemen-tation
• Adjusting proposals
• Training
• Evaluation• Final report• Setting commitments• Plans for: follow-up•Contingencies• Withdrawal
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ECONOMIC WELL-BEING = ENTREPRENEURSHIP + GOVERNANCE
Direct localInvestment
Foreign Investment
• Incentives• Perks
• Policies• Practices
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ENTREPRENEURSHIENTREPRENEURSHIPP
Planning Organizing Producing
Creativity/ Innovation
Resources
Passion for business
Products or
Services or
Trading
THE ENTERPRISE
as a process
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And the components are:
EntrepreneurshipEntrepreneurship = Entrepreneur + Resources + Conducive Environment One who
starts and manages an economic activity for the purposes of profit.
is innovative and employs strategic practices
is motivated to achieve
Idea
Equity
Fixed assets
Intangible assets
Economic enabling policies
Investment climate
Political stability
Business-friendly local government
Peace & Order
Infrastructure
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SWOT Analysis of each identified project
Controllable
Uncontrollable
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STRENGTHSSTRENGTHS
Positive factors that contribute to the success of a business
• Skills, expertise
• Availability of resources
• Easy access to resources
• Strong market demand
• Low capital requirement
CONTROLLABLE
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WEAKNESSESWEAKNESSES
Negative factors that contribute to or cause the failure of a business
• Lack of skills, expertise
• Unstable supply of resources
• Lack of raw material sources
• Seasonal demand
• Lack of capital
CONTROLLABLE
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OPPORTUNITIESOPPORTUNITIES
Conditions in the environment that will allow you to earn more income
• Growing demand
• New technological innovations
• Strong government support
• Expansion
UNCONTROLLABLE
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THREATSTHREATS
Conditions in the environment that can negatively affect a business
• Wage legislations
• “Unfavorable” government regulations
• Inflation
• Stiff competition
• Raw material shortages
UNCONTROLLABLE
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A enterprise project goes through several phases which will typically include:
Idea : generation of a notion or new concept
Research : patient, systematic search and inquiry and examination into a field of knowledge
Design: conversion of ideas into a plan for a product, service or process
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Development: taking a specification and converting it into an actual product, service or process
Market study: involves the determining the need for the product or service and deliver results to customer
Production: conversion of resources to product or service that provides value to the customer
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Enterprise Development requires a
DreamerDreamerDoerDoer
RisktakerRisktaker
BUSINESS PROJECTBUSINESS PROJECT
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Self - realization
Personal competencies
Project Id
Micro screening
Business Planning
Critical functional areas
Appraisal & financing
Resources acquisition
Implementation
Start up & Operation
Evaluation
Profit or lose
STEPS IN ENTERPRISE STEPS IN ENTERPRISE DEVELOPMENTDEVELOPMENT
Management
Business Functions
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Project identification Scan the internal and external environment Assess strengths and weaknesses Identify opportunities and threats Identify market needs that the business can serve Identify resources for the business. The output of this activity is a list of alternative
business ideas that an individual can consider for investment.
Project formulation/ development of a business plan
Decision to proceed with the project Development of a simple business plan Identify critical points of the project from the point of
view of commercial viability and technical feasibility.
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Project appraisal and financing
Raise the required capital for starting the project Acquire resources for the project
Project implementation Implement the business plan Locate the business Acquire and install the production equipment needed Recruit and train workers Conduct production trial runs Sell them to customers
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Project management Planning production and sales Organizing the resources Directing the workers and coordinating their
activities, monitoring results and outputs Controlling the business operation.
The entrepreneur-manager meets concerns such as:a. Marketing problems: stiff competition, fluctuation
in market demand, customer buying and paying habits, and rejection of products.
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b. Production/ operation : desired volume, quality, and price; increasing costs of production inputs such as materials, labor and utilities; high degree of defects and product rejects; breakdown of equipment; productivity of workers and machine; running out of materials; and frequent power failures.
c. Personnel management workers are satisfied, motivated, and productive; tardiness and absenteeism; productivity; and morale.
d. Financial management : cash to finance daily operations, safeguarding of cash from losses, and high degree of inventories and receivables.
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Project evaluation assess the performance of the business Examine results of the financial operations analyze profit and loss statements and balance
sheets determine if desired return on investment is
attained
The evaluation may indicate any of the following:a. making good money and there are prospects for
expanding or diversifying into other areas.b. losing money from the business.c. the business is just breaking even.
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decide to continue
set up another
leave entrepreneurship to those who are more capable and more fortunate
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Module 6 Integration
Workshop on the Counseling Process Framework
Action Plan
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That’s all folks Have a good day