YOUR JOURNEYMicrofinanceJune 2015

PROLOGUEMicrofinanceJune 2015

WHAT IS YOUR ROLE?

The main problem of the entrepreneurs is that they can produce things but they don’t have any funds to start their business

Your role in the project is help the entrepreneur create a budget, get to know the minimum amount required to launch the business, loan the money to the entrepreneur and help the entrepreneur manage his business by applying principles of lean management

STEPS IN HELPING THE ENTREPRENEUR Women in Action journey

1. A business analysis to know current situation

2. Develop MVP of product

3. Assess costs of MVP and loan money

4. Financial tracking and business management

UNDERSTANDING THE ENTREPRENEURS Here, you have to know the entrepreneur to be able to work with them. So here are a few very important points:

1. RESPECT the entrepreneurs. Sure they want your help, but not your judgment. Do not make fun of them or their situation

2. Understand their education level. Most of them did not go to school. Understand that concepts that can come easy for you and not easy for them. Now now, don’t take them for stupid!

3. Understand that they will have other responsibilities and YOU are not their focus while THEY ARE YOUR FOCUS!

4. Understand that they tried a lot of times before and failed! Understand that they don’t feel the best of this and your attitude should help to motivate them!

5. Understand that we don’t have the answers and you are expected to be able to help us find the answers. Your role is to help him/her find ways to kickstart the business. If she knew already, she not need our help

6. Understand that your advice is not the ultimate advice. It is up to him/her to do what he/she wants. Understand also that he/she trusts you and know your power in guiding them. If you are not sure, DO NOT ADVICE!!!

UNDERSTANDING THE BUSINESS OF THE ENTREPRENEURS1. The business of the entrepreneurs are not very difficult business.

Most of them are not hard to develop skills. Therefore there is a lot of competition for this business.

2. Because of No1, that is why the business is very localized. We have to be able to market to the people close to her. The business is small scale and would not require big marketing tools such as adverts in newspaper! So you also have to make your strategies adapted to this as well! We cannot use TV adverts as an option as well!

3. A small amount of money might look insignificant to you but this is the entrepreneurs and often her family’s, living. Your impact is small for sure, but SIGNIFICANT!

CHAPTER 1: BUSINESS ANALYSIS

MicrofinanceJune 2015

IMPORTANT NOTE

This should be done only once. It is possible that a previous intern already did this. Please read the report before proceeding.

CREATING A SIMPLE ANALYSIS

Product

Financial situation

Plans

• What is being made?

• Legal permits?• Previous sales?• Any budget?

• Any future plans?

MOST OF THE TIME…

In developing the business, our entrepreneurs have no planning. Sometimes, the legal permits are ignored. That is why we have to start by helping them develop a plan first of all and then move forward.

Even though they have been running the business for some time, you can consider the business as a starting one.

CHAPTER 2: DEVELOPING THE

MVP

MicrofinanceJune 2015

CREATING THE MVP

Often a times, one of the mistakes the entrepreneurs do is that they go directly into production.

They will receive a course of making bags for example and instantly start producing. Afterwards, they will try very hard to sell the products without much luck and will lose all their investment.

Being a small entrepreneur, this can be devastating. That is why we have to move even more cautiously and be very cautious in the way money is spent.

That is why an MVP is of utmost importance. Create an inexpensive MVP to be able to test the market and at the same time launch the business. Adopt a conservative approach. Produce only after getting orders. Do not produce and then try to sell.

CHAPTER 3: LOANMicrofinanceJune 2015

BUDGET CREATION

First of all, lets look at the cost sides

Establish a clear cost calculation of the MVP and final product (if different)

Don’t forget INDIRECT costs which often is the source of bad financial planning

Secondly, lets establish the sales forecast

1. Establish a price for your product

2. Create an internal and external analysis

3. Create map of customers and competitors

4. Create a 3 months sales forecast using qualitative forecasting

Subsequently, produce a 3 months budget

LOANING THE MONEY

The money loaned to the entrepreneur comes from the fundraising event launched either by a specific team or by the MIFI team.

Along with the entrepreneur, you have to develop a budget for the business.

The entrepreneur has to sign the contract of the loan agreement. The amount of loan will be determined by you and the entrepreneur since you followed the entrepreneur in developing the MVP.

Based on budget, a repayment plan has to also be created.

CHAPTER 4: BUSINESS

MANAGEMENT

MicrofinanceJune 2015

FINANCE TRACKING

On a weekly basis, you have to follow the entrepreneur to see the development of the business and advice accordingly.

The most important part is to follow the balance sheet and making sure that accounts are being recorded.