NucleusInternational net Basics about Nuclei of Entrepreneurs and

Nucleus-International. net Basics about Nuclei of Entrepreneurs and Organisational Development of Business Chambers 06/2006 Nucleus-International. net 1

1. Analysis of SMEs 06/2006 Nucleus-International. net 2

One can analyse the entrepreneur and his company in two ways: • Technically – From top to bottom, – stressing objectively existing problems • Socio-economically – From bottom to top, – stressing the way the entrepreneur perceives the world subjectively 06/2006 Nucleus-International. net 3

a) Technical analysis Using technological, legal and business management criteria: • Poor organization, planning and management • Poor technological input • Poor product quality • No professional training • No access to credits • etc. , etc. . 06/2006 Nucleus-International. net 4

• Hypothesis 1 : There is a great demand of SMEs for training, consultancy and support. This means that the entrepreneur – is perfectly aware of his needs – is always looking for breakthroughs – is always interested in learning about new subjects • Hypothesis 2 : The supply of services and support is poor 06/2006 Nucleus-International. net 5

The strategy • Identify of the SMEs’ needs (research) • Improve the quality and quantity of services offered to SMEs • The entrepreneur uses the offered services – participates in training programs – looks for consultancy –. … and starts to improve his business results 06/2006 Nucleus-International. net 6

Improving the supply of services Support Agencies for SMEs we know what is good for SMEs Su Project y l pp Improving the supply SME 06/2006 SME SME Nucleus-International. net SME 7

The favoured instrument …. Support Agencies for SMEs we know what is good for SMEs Su Project y l pp Improving the supply SME 06/2006 SME SME Nucleus-International. net SME 8

The problem. . . • Nevertheless, many entrepreneurs do not accept and use the good service supply. . . 06/2006 Nucleus-International. net 9

The chamber & project does not reach the SMEs. Why? • Either the chamber / project is good (has good intentions) • But the target group SME is bad (does not accept the good offers) • Or the chamber / project is bad (does not reach the SME) • But the target group SME is good (acts according to its experiences) The big misunderstanding : Need does not mean automatically Demand 06/2006 Nucleus-International. net 10

b) Socio-economical analysis • The country is full of SMEs with “drive”. They are – – – flexible creative serious courageous with entrepreneurial spirit. . . Question: Does this assumption ring true or not true in this country? 06/2006 Nucleus-International. net 11

But. . . • The SME is isolated within his/her enterprise: – Does not have anyone to discuss doubts and to develop new ideas – Nobody stimulates / provokes him/her to look for new solutions • Result : he/she remains in a “tunnel of thoughts” Note: this applies all over the world! 06/2006 Nucleus-International. net 12

• The entrepreneur lacks often education and professional training. Consequence: He / she never learned how to learn, how to identify and apply new business techniques in an enterprise Question: does this assumption ring true or untrue in this country? 06/2006 Nucleus-International. net 13

• Other entrepreneurs are seen as competitors = personal enemies – He / she does not talk to them – He / she does not share information & experience – He / she does not benchmark his/her business against others – He /she stresses the differences rather than the common features with others This is true in Latin America and in Sri Lanka, but not in West Africa. How is it in this. Nucleus-International. net country? 06/2006 14

• The SME is not able to accumulate capital for major investments: As soon as he/she has a little bit of surplus he/she has to attend to demands for help and support of the big family Note: This is true in Africa and the Pacific Islands! It is not true in Latin America and in Sri Lanka. How is it in this country? 06/2006 Nucleus-International. net 15

• The SME perceives the world as a whole. He/she does not differentiate between – family life – entrepreneurial life and – religious life • Therefore he/she does not run the business like a “homo economico” This is true in many countries! And in in this country? 06/2006 Nucleus-International. net 16

• He / she does not trust anybody: the world is full of “robbers” Government Suppliers Clients Employees Banks Business Association SMESupport Agencies City Hall This is true in many countries! And in this country? Nucleus-International. net 06/2006 17

• He/she defines problems, needs and ideas in a diffuse and abstract way – Always tries to explain his/her problems with external reasons (problem outsourcing) – Has often unfeasible and unrealistic objectives This is true in many countries! And in this country? Nucleus-International. net 06/2006 18

If this description of the SME is right, then there are some key questions: ? • How to reach this entrepreneur ? • How to gain his / her trust ? • How to stimulate learning processes and changes ? 06/2006 Nucleus-International. net 19

• Hypothesis 1: The supply of services is not the central problem The central problem is the demand of the entrepreneurs for services 06/2006 Nucleus-International. net 20

• Hypothesis 2 : Entrepreneurs are only open for discussion of those problems and needs which they perceive themselves in a subjective manner Nobody likes someone saying: You have a problem! 06/2006 Nucleus-International. net 21

• Hypothesis 3 : The identification of problems and needs is the result of a communication process of the entrepreneur with other people rather than the beginning (that is why studies to identify the SMEs' needs do not provide proper answers) 06/2006 Nucleus-International. net 22

Objective of a chamber & project: • Stimulation of a communication process among the entrepreneurs • Identification, structuring and organization of the demand for services from bottom to top • Improvement of the performance of business chambers and associations • Creation of networks between the business chambers and other private and public institutions 06/2006 Nucleus-International. net 23

Mobilization of self-organizing forces : Stimulate, structure and organize the demand Su pp ly Support Agencies for SMEs Project SMEs must define what is right for them d n a m e D SME 06/2006 Mobilisation of selforganizing and helping forces Organizations of SMEs (business chambers) SME SME Nucleus-International. net SME 24

Is this case the instrument of grants and gifts is useless and inefficient Su pp ly Support Agencies for SMEs Project SMEs must define what is right for them d n a m e D SME 06/2006 Mobilisation of selforganizing and helping forces Organizations of SMEs (business chambers) SME SME Nucleus-International. net SME 25

2. Analysis of Business Chambers 06/2006 Nucleus-International. net 26

Characteristics of the Business Chambers in many Countries • Only deal with. . . • Institutions of the elite, closed to SMEs • Poor / not professionalised • Employees only administrate, do not initiate, create. . . • Do not know the affiliated SMEs • Are more Business Clubs than Service Enterprises 06/2006 Nucleus-International. net LOBBY Chamber 27

Another vision for Business Chambers • Lobby is not the only task of a business chamber LOBBY • They have two tasks: – LOBBY and – SERVICES for the affiliated members Chamber SERVICE 06/2006 Nucleus-International. net 28

Services – what for? • To help the member in the – foundation – development – modernization – expansion of his enterprise • To support him/her in day-to-day activities 06/2006 Nucleus-International. net 29

The Structure of Services request professional staff ! 06/2006 Nucleus-International. net 30

3. Nucleus and Group Counselling 06/2006 Nucleus-International. net 31

Elements of Nucleus Counselling consists of 6 basic elements : Nucleu s Nucleus Counsellor Time Problem and / or Idea 06/2006 Solution Action Nucleus-International. net 32

Definition of a "Nucleus" A Nucleus is a Working Group of Entrepreneurs + Counsellor SME SME Counsellor SME 06/2006 SME Nucleus-International. net 33

Definition of a "Nucleus" The Counsellor is an integral part of the Nucleus! No Counsellor - No Nucleus ! SME SME Counsellor SME 06/2006 SME Nucleus-International. net 34

The Nucleus serves as a) Communication centre to exchange know-how, experiences, problems and ideas among its members (= counselling) SME SME Counsellor SME 06/2006 SME Nucleus-International. net 35

The Nucleus as communication centre SMEs counsel SMEs ! SME SME Counsellor SME 06/2006 SME Nucleus-International. net 36

The Nucleus as communication centre SMEs counsel SMEs ! The decisive question: Do SMEs put their "business secrets" on the table ? If everyone puts 1 business secret on the table he invests 1 – and gets back 10, 15 or more ! Is this a good return of investment ? 06/2006 Nucleus-International. net 37

The Nucleus serves as b) Action centre to execute activities in a group Activity SME SME Counsellor SME 06/2006 SME Nucleus-International. net 38

Possible activities of a Nucleus • Counselling • Training – members and their staff – workshops, conferences and similar events • Visit of other institutions – Companies of the same sector, suppliers, purchasers, – Training, consulting, research institutions – Business associations and chambers 06/2006 – Group and Individual counselling – About administrative and technical problems and developments • Procurement of technical information and market data • Collective promotion activities of the Nucleuscompanies Nucleus-International. net 39

The Nucleus aims in two Directions a) Internal : to stimulate ideas and activities to improve the enterprises SME The Nucleus has service character SME SME Counsellor SME 06/2006 SME Nucleus-International. net SME enterprise 41

The Nucleus aims in two Directions b) External : To influence the entrepreneurial environment SME SME Counsellor SME 06/2006 SME Nucleus-International. net The Nucleus has lobby character: alone the entrepreneur is a nobody - in a group he gains power 42

The Work Cycle of a Nucleus initiate, invite reduce distance, build trust identify problems / ideas decide on activities, implement them (look for solutions outside the Nucleus) analyse problem / idea, identify causes look for solutions inside the Nucleus . . . an open process, with a start but without an end! 06/2006 Nucleus-International. net 43

Where to Look for Solutions world-wide within the country within the region within the town within the association within the Nucleus 06/2006 Nucleus-International. net 44

The Working Process Entrepreneur : Action within his / her company Counsellor : - Preparation of Nucleus meetings / actions - Execution of Nucleus decisions Counsellor : Individual Counselling of members Meeting Action Time 06/2006 Nucleus-International. net 45

4. The Nucleus Counsellor 06/2006 Nucleus-International. net 46

The Nucleus Counsellor : Tasks Group Counselling Moderation of meetings Execution of activities Individual Counselling of members 06/2006 Nucleus-International. net 47

The Nucleus Counsellor : Tasks • Stimulation and organisation of the communication process amongst members = Moderation • Focal point: the group dynamic • Objectives : – High quality of the discussions – Strong orientation towards goals No confusion, no "blah. . " 06/2006 Nucleus-International. net 48

The Nucleus Counsellor : Tasks • At the “right” moment, the counsellor – Participates actively in the discussion – Contributes with - know-how, - questions, Nucleus - ideas, - experiences, - comparisons, - proposals = Counselling 06/2006 Nucleus-International. net 49

5. The Nucleus in the Chamber 06/2006 Nucleus-International. net 50

The Nucleus in the Chamber 1. Small groups of entrepreneurs (12 – 30 members) have access to professionalised services Chamber Nucleus 06/2006 Nucleus-International. net Nucleus 51

The Nucleus in the Chamber 2. A Counsellor can attend 8 – 10 Nuclei = 100 to 200 members Chamber Nucleus 06/2006 Nucleus-International. net Nucleus 52

The Nucleus in the Chamber 3. World wide rule in Chambers: 100 to 200 membership fees finance one Counsellor Chamber Nucleus 06/2006 Nucleus-International. net Nucleus 53

The Nucleus in the Chamber 4. The Nucleus serves to make the Chamber more attractive … Chamber Nucleus … and more entrepreneurs apply for membership 06/2006 Nucleus-International. net 54

Logic of the Development of Chambers of Entrepreneurs Law of great number: the more members, the more influence Lobby in front of Government and other groups of the society Chamber Services Information / Consultation Training / Support More means to finance more and better services Higher attractiveness for Entrepreneurs More members pay more membership fees More Entrepreneurs apply for membership 06/2006 Nucleus-International. net 55

Logic of the Development of Chambers of Entrepreneurs • However, this works only, if the Chamber – has open doors for entrepreneurs – wants them as members – has a membership fee system which is recognised as "fair" also by entrepreneurs 06/2006 Nucleus-International. net 56

Nucleus-International. net • This file is part of our material to present and illustrate our activities to professional and elected officials of business associations, personnel from technical cooperation projects, and other people with an interest in this field. We are involved in a constant process of elaborating and improving this material, and targeting it to the demands of specific groups. • You may use, copy, and change this file as you like (we do not insist on a copyright). • We would, however, like to ask you for the following: please send us a copy (as a file or printout) and additional information if you use the file or parts of it. • Thank you! • The Nucleus-International. net team 06/2006 Nucleus-International. net 57