to buy household equipment. Even after many years, families often depend on constant remit-tances inflow because of not having used the cash for income-generating investments.
MITOS Tool 05: “Cash Flow Management” pro-posed to raise awareness among the target groups on the need and importance of savings and the us-age of remittances for income-generating activity.
The MITOS Tool 06: “Idea Generation for Invest-ment Opportunities” can help them to find suitable business ideas for their specific situation.
Some migrants are interested in using their savings or special know-how for investments in the CoO. In most cases this is closely related to the family, but it can involve other business partners in the origin country as well. The migrant does not necessarily wish to get personally involved in the day-to-day management of such an investment.
Key reasons for migrants to hesitate becoming an entrepreneur are:
u Lack of entrepreneurial competences or experiences
u No wish to get directly and personally involved in a business, despite their willingness to support it in the CoO
u No experiences in business planning
u Lack of awareness about their special/unique competitive advantages as migrants
The aforementioned awareness raising workshop, the household cash flow management training and the investment idea generation workshop can lay a good foundation for this tool.
1 Tool:
Business creation based on migrants’ skills and remittances.
2 Objectives:
Migrants and their families will be able to:
u Understand and assess their entrepreneurial competencies
u Systematically plan the business based on the individual level of assets and remittances
u Communicate and coordinate business activities over distance
u Forecast the market and develop individual busi-ness plans with strategies for a stable partnership to execute the business
u Access additional financing
3 Target group:
Migrants and their families living in countries of origin.
Participants of the workshops in MITOS Tool 05:
“Cash Flow Management” or MITOS Tool 06: “Idea Generation for Investment Opportunities” (if such tools are provided as well).
4 Problems and potentials of migrants addressed by this tool:
A considerable percentage of the population of many developing countries works abroad while their families stay in the CoO and receive financial assistance by the migrants (remittances). In general, remittances are used to cover day-to-day house-hold expenses, constructing houses or for instance
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This tool focuses on people who are interested in starting a business with their remittances or based on special migration-related comparative advan-tages. They will attend an 8-day-training on busi-ness creation.
The proposed training tackles ways of communi-cating and coordinating on distance, as well as the formulation of strategies to share knowledge and information on business conditions.
5 Description:
The proposed tool consists of the following items:
a. Personal entrepreneurial competencies Learning and experiencing ten personal
entre-preneurial competencies to strengthen confi-dence to start a business.
b. Market study and identification of potential markets for planned products and services Based on a preceding workshop on idea
genera-tion (see MITOS Tool 06: “Idea Generagenera-tion for Investment Opportunities”) and after acquir-ing the knowledge on marketacquir-ing and market studies, participants execute field work to verify market opportunities for their specific products and services. Special attention will be given to innovative ideas arising from the migrants’ back-grounds, which requires different ways of market analysis.
c. Business plan development
Each participant (or a group of migrant and (family) business partners) develops his/her own business plan under the guidance of trainers, based on the available remittance income and the particular business idea.
d. Strategy formulation to coordinate business activities on distance
Participants will learn how to communicate and coordinate between distance partners and about appropriate strategies to coordinate over distance. Suitable types of contracts will be pre-pared to address the need of silent business part-ners (usually migrants).
e. Viability test and access to financial resources A presentation of the business plans to financial
institutions facilitates access to credit, if needed.
It also opens the interest of financial institutions in this special target market
6 Prerequisites:
6 1 Implementing organization:
For example:
a. Business development service organizations and providers
b. Training organizations
7 Particularities and/or difficulties:
Particularities:
The training is based on the CEFE Business Creation Course. Main differences are:
u The focus on specific assets and competencies of migrants
u Utilization of remittances as main source of funding for the business
u Provision for unsteady income by remittances in cash flow planning
u Communication between partners at long distance
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u Suitable contractual arrangements between such partners
Experienced CEFE trainers can conduct this train-ing and would not need a traintrain-ing of trainers be-forehand. However, coaching by a trainer familiar with the tool and specific guidance on how to adapt the standard business creation course would be an asset for the first application of the tool in a country.
As an additional and specific advantage of migrants, remittances can be used to redeem a bank loan.
This would reduce the risk of non-performance of loans and increase the bank’s appreciation of a business plan.
Difficulties:
Processing of exercises, field work and business plan preparation would require a segmentation of the course into several units, which makes organi-sation quite difficult and takes time and resources.
The scheduled time frame of eight days might be ambitious.
8 Costs:
Costs vary from country to country depending on the rates for resource persons and other cost items.
A table of average costs for different items is calcu-lated as follows for a group of 25 participants and a duration of eight days.
Item Approximate
cost in US$
Resource person 2,400
Venue and refreshments 800
Training material and equipment 800
Total cost per course 4,000
9 Dissemination:
CEFE Business Creation Training is available in around 150 countries as a general training pro-gramme for potential and already active entrepre-neurs. However, guidance in course programme adaptation for trainers who give the course for the first time is strongly recommended.
The seminar offer can be disseminated by govern-ment agencies and/or programmes working in pri-vate sector development.
Informal migrant communities in the countries of destination can be used as a platform to introduce this tool (in brief), or at least to raise awareness for the idea. Then they can organize their local partners and link them with this project
10 Links to other MITOS tools:
MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 05: Cash Flow Management
MITOS Tool 06: Idea Generation for Investment Opportunities
MITOS Tool 09: Import and Export Service Training MITOS Tool 11: One Stop Shop Service for Migrants MITOS Tool 13: Mentoring
Prepared by:
Piyatissa Tennakoon, CEFE International [email protected]
www.cefe.net.