Successful Inclusive Business Development Services: The IBA toolkit experience
The Inclusive Business Accelerator initiative has developed toolkits on Inclusive Business and Inclusive Innovation. These toolkits are aimed at consultants who are looking to improve their Business Development Services towards businesses operating in base of the pyramid markets.
As one of these consultants, I have worked to provide entrepreneurs with tools that have helped them make the necessary adjustments to their strategies and eventually secure income. This is an account of my experience training a Netfund awardee, John Magiro.
I remember sighing in relief when we closed the deal with Netfund to run part of their entrepreneur incubation program, although it came with a warning that the incubatees were coming from very rural locations and backgrounds. This incubatee is a young entrepreneur named Magiro, who has “electrified” his village in Muranga County in Kenya. Magiro has successfully managed to generate hydro power and supplied over 77 households. All this with no graduate education and unsophisticated equipment.
When I first met him at his power generation facility, he was oozing with confidence and obviously very proud of himself. He was indignant of the various experts who had come to visit him and said that he ended up teaching them. Everything I knew about business modelling was secondary; the key was to listen to and learn from both the business and the entrepreneur.
A few weeks after the initial meeting, Magiro was in Nairobi to learn how to pitch to investors and sharpen his business strategy, in order to raise funding for his scalability strategy. At the time he had 500 new customers queuing for a new connection.
The main challenge when working with these entrepreneurs, who have worked very hard for years to build their own business, is that it’s not uncommon that they don’t listen to you, particularly when you show up as a consultant to provide advice.
To unlock Magiro’s genius and squash his initial doubt about our consultancy, we engaged in the Inclusive Business Accelerator toolkit, without necessarily mentioning that we had these “special tools”. Step by step, we reviewed his customer segmentation, value proposition, distribution model tools etc. I think what caught him by surprise is how much potential his business had compared to what he was charging his customers.
You see his revenue model only charged for initial installation charges (Kes 15000/-), and then collected Kes 100/- per month from his customers. He did not measure how much power each customer actually consumed. When we did a simulation of what each customer could pay him per month his potential revenue showed more than a 500% correction. Yes, 500%. It explained why so many customers were queuing for his connection.
When we reviewed the resources his business would need to generate its value proposition, he realised his own need to first grow technically before engaging in scalability strategies, and it also became clear to him which kind of partners he needed for his model to succeed.
I am convinced that if we had not collaborated with Magiro using the toolkit methodology, it would have been impossible for him to unlock his potential and realise his dream. As we speak he has found both an investor and partner organization to develop his skills and entrepreneurial capability.
This success story is not an isolated case. Many other entrepreneurs have benefitted from business development tools and services which have enhanced their business plans or value propositions. For example, Strauss Energy, a venture recently shortlisted in the DEMO Africa competition, received Business Development support provided using the Inclusive Business Accelerator toolkits through Netfund.
All businesses and particularly inclusive ones face the need for adequate support to unlock their full potential. While this has been provided sporadically, there is a need to streamline the process and harmonise the practices in order to create a win-win relationship where both entrepreneur and BDS provider learn from experience.
With two toolkits on Inclusive Business and Inclusive Innovation, the Inclusive Business Accelerator is well on its way to becoming a household name in the sector of Inclusive Business Development Service provision. But a lot of work remains in terms of affordability, efficiency and partnerships to raise the visibility of IBDS provision as a professionally recognised service.
This blog is part of the September 2016 series on Inclusive Business Development Services, in partnership with the Inclusive Business Accelerator. Don’t miss the whole series on support available to inclusive business from practitioners, donors and intermediaries including Afrilabs, DFID, Endeva, EY and many more…