An Overview of SMEs in Bangladesh

Mohammad Ayub Miah Additional Secretary to the Government of Bangladesh & Project Director, Small & Medium Enterprise Sector Development Program Ministry of Industries

September 2006

Introduction The objectives of the survey is to take stock of experiences on development of entrepreneurs of small and medium enterprises (SMEs) in APO member countries and to analyze the set of initiatives, strategies, programs, policies, and competencies that lead to competitiveness of Asian SMEs. The survey therefore aims to: Examine the various entrepreneur development initiatives, policies and programs being implemented by many agencies involved at the national level; Examine the various entrepreneurship development initiatives and experiences of some exemplary individual SMEs in the country and analyze how these initiatives have contributed to their success; Undertake comparative analyses at the regional level and to identify commonalities and differences among the experiences and practices of SME development by the countries being surveyed; Identify and elicit a common framework at the regional level for entrepreneur development initiatives and strategies that will effectively work in instilling a productive and competitive mindset for the entrepreneurs of the small enterprises of APO member countries. PART A: COUNTRYS DEVELOPMENT STRATEGY AND OVERVIEW OF THE SMEs IN THE COUNTRY A. A BRIEF ECONOMIC REVIEW OF THE COUNTRY

Discuss the profile and the major economic indicators of the country. The macro economic reforms and management in key economic sectors have significantly influenced the growth in different economic sectors of the national economy. Bangladesh, mainly backed by the growth of industry and service sector has achieved a GDP growth of 5.38 percent in the year 200405. Per capita GDP and GNI stood at US $445 and US $470 respectively. The rate of national investment rose to 24.43 percent, which is the ever highest. The contribution of private sector to this investment is 18.53 percent. The contribution of the private sector to the economy is increasingly becoming prominent. In the year 2004-05, the growth of credit to the private sector stood at 17.20 percent. The average inflation stood at 6.49% in the year 2004-05. The population growth rate (as percentage) for the year 2004 stand for 1.5 and the literacy rate for this year 2004-2005 stand for 62.66 percent.

b.

NATIONAL DEVELOPMENT STRATEGY

Describe the countrys national development strategy/economic plan. Briefly comment on the implementation of this strategy till to-date. Implementation of poverty alleviation action programs and strategies is a systematic and continuous effort in Bangladesh. For that purpose, the Poverty Reduction Strategy Paper (PRSP) of 2004 has clearly identified some core principles and parameters both at macro and micro levels for reducing the existing poverty level at least half with in 2015 as targeted in the Millennium Development Goals (MDGs). Rapid and sustainable growth of SMEs is undoubtedly one vehicle for accelerating national economic growth to the point of having a measurable impact in the way of reduction of poverty and unemployment, generation of more employment. The Government has expressed her commitment in the PRSP and as well as Industrial Policy 2005 to consider SMEs as vehicles for quality of life improvement, economic growth and poverty alleviation of the common people. The government will play the role as a facilitator removing policy obstacles and neutralizing market failures and, secondly, will provide necessary promotional support to SMEs. c. OVERVIEW OF THE SMES IN THE COUNTRY

There is great interest in small and medium enterprises (SMEs) as a major plank of poverty reduction in Bangladesh. Government of Bangladesh formulated a comprehensive Industrial Policy-2005 by putting special emphasis for developing Small and Medium Enterprises (SMEs) as a thrust sector for balanced and sustainable industrial development in the country to help deal with the challenges of free market economy and globalization. With multilateral trade negotiations often leading to improving market access, and with developing countries also being a lot more willing than before to participate in globalization, rich country government and the aid agencies have apparently decided to focus on the SMEs as one important ingredient of private-sector development. A number of donors are working in Bangladesh in the interest of fostering SMEs. Some, like the GTZ, are working not with entrepreneurs but with the chambers and industry associations building their capacities to deliver needed services. Some, like the Katalyst, are putting together a comprehensive base of knowledge and insights about living production clusters, not all of them in manufacturing, namely, plastics, agricultural tools, textiles, pond culture, and vegetableraising. Yet others such as the SEDF are building enterprise-level capacities through training programs, efforts to upgrade project management skills, enhancing the appraisal and evaluation capacities of financial institutions concerned with SMEs. Industrialisations link to poverty reduction is through (a) charging-up the growth rate of the country; (b) enhancement of the productivity of the worker(s) in employment; (c) providing employment to the unemployed; (d) expanding consumer spending (and thus the confidence level) by sharing lower costs from scale economies via lower prices. The extent to which

industrialisation actually pitches up as in this virtuous scenario depends on how the promoters allocate resources with the aims of going for these effects. In particular, the impact will depend on which product groups and/or spatial clusters are targeted; on how technical-assistance resources are stacked up between technology know-how, management and secretarial know-how, market-access networking, etc. Either way, having measureable impact will often put a premium on knowing the customer well, the customer in this case being the entrepreneurs who have put their money where their mouths are. Intimate knowledge about the industrial classification of the SME establishments, the spatial distribution of those establishments within each industry between rural and urban locations, the distribution of these establishments in order of fixed investment size should all be of relevance. Such a foundation of empirical knowledge is needed so as to articulate priority among competing industrial groups, production clusters, resource receptacles, interventions time-frame of varying length, etc. Given the availability of SME-related data in the public domain, it is only possible to discuss SMEs industrial structure in two major ways, viz based on the number of establishments and the number of persons employed. 1 Bangladeshs Development Strategy and Overview of the SMEs SMEs Defined From the vantage-point of industrial assistance policy, a classification of establishments based on employment of labour---the abundantly available factor of production---may not have a great deal of policy relevance, as the amount of capital that is combined with a given level of employment may widely vary. Bangladeshs Small and Medium Enterprises Taskforce (SMETF), that reported to the Government in September 2004 defined size based on fixed investment, defined size of establishment based on fixed-investment. 2 SMEs in Bangladesh are defined for purposes of industrial policies by the Ministry of Industries (MOI). Historically, this definition has been in terms of fixed-investment brackets, and a dual-mode definition is in place, separate for manufacturing establishments, and service establishments. For manufacturing enterprises, For manufacturing industries, the Taskforce defines: (a) an enterprise would be treated as small if, in todays market prices, the replacement cost of plant, machinery, building, structures, and other parts/components, fixtures, support utility, and associated technical services (such as turn-key consultancy), etc, were to up to Tk. 10 million;
It is not as yet possible to carry out this structural discussion based on measures of output. It remains the hope of the TA Grant Team to also do so in a future date.
1 2

Head-count would nevertheless be an useful measure of size for statistically purposes.

(b)

(c)

an enterprise would be treated as medium if, in todays market prices, the replacement cost of plant, machinery, building, structures, and other parts/components, fixtures, support utility, and associated technical services (such as turn-key consultancy), etc, were to up to Tk. 100 million; From both definitions above, land is excluded.

For non-manufacturing activities (such as trading or other services), the Taskforce defines: (d) an enterprise would be treated as small if it has less than 25 workers, in full-time equivalents; (e) an enterprise would be treated as medium if it has between 25 and 100 employees; From both definitions above, land, once again, is excluded. Having said that, an alternative, albeit informal, definition, of SMEs is used by the Bangladesh Bureau of Statistics, using head-count for its basis. Enterprises with upto 9 employees are treated as micro; with between 10 and 49, as small; with between 50 and 99, as medium, and all the rest, as large. For statistical purposes, this is the definition that we use in this paper. Some data with a national scope that are pertinent to characterizing SMEs in Bangladesh as of 2001/2003 are presented in Table-1. 3 The highlights of this table is the following: (a) there are some 78,440 private-sector establishments of various size in Bangladesh with some 3.5 million workers employed in them.4 Of this, urban Bangladesh accounts for some 60% of units and 76% of employment overall in the private-sector enterprise sector, with rural Bangladesh accounting for the rest. Ninety-three point three (93.6%) of all units in Bangladesh belong in the SME category, ie have between 20 and 99 employees. However, SMEs account for only 44% of the total employment of the enterprise sector. Legal status: The proportion of SMEs that are incorporated as proprietorship is a high 81% according to data obtained from the Registrar of Joint Stock Companies. Private companies limited by liability account for strictly a very small proportion of the total number of SMEs in Bangladesh. Table-2 shows the average employment per establishment within each of the small and medium classes for urban and rural Bangladesh in 2001/2003. The following results are worth highlighting. Let it be noted that these are weighted averages. First, where small establishments are concerned, the average employment size per establishment clusters around a narrow range, namely, 17 20 workers, across the six divisions. We find a
3

Of course, establishments smaller than head-counts of 10 are excluded from this body of data. 4 BBS data on enterprises include some units under the sub-sectoral captions of public administration and defence, for instance. Clearly, these units do not belong in the privatesector.

similar clustering of average employment size for medium enterprises in a narrow range of between 65 69 employees. Also, taking the administrative divisions individually, measures of average employment levels dont differ very greatly as between urban or rural Bangladesh: the values are strung together. Table-1 Number of units and levels of employment in small and medium enterprises, 2001/2003 (All numbers are in thousands) Urban Rural Total DesCripTions Sma ll No. of 39.9 Units % of total number of 50.9 units Employme nt % of total employme nt 740. 4 21.1 4 Mediu m 3.17 4.0 211.5 Large 4.036 5.1 1712. 67 48.9 Small 29.0 38.1 516.8 Mediu m 1.29 1.6 85.85 Large 0.88 1.11 234.6 69 6.7 Small 68.96 87.9 1257. 2 35.9 Mediu m 4.46 5.7 297.4 Large 5.01 6.4 1947. 3 55.6

6.0

14.8

2.4

8.5

Table-2 Average head-count industries, 2001/2003

per

establishment

across

Bangladeshs

Small

Medium

SME

Large

All

Food and tobacco 18.6 65.1 21.0 Textile manufacturing 19.1 66.2 21.9 Ready-to-wear 17.8 70.3 22.9 apparels Wood, leather & 17.0 66.8 19.7 paper_printing Chemicals and 19.1 67.0 22.7 Plastics Non-metallic mineral 26.0 70.3 41.5 products Fabricated goods, 17.0 65.7 20.3 electricals and means of transport Mining and 24.6 65.5 32.7 manufacture nes Various personal 17.5 66.0 19.9 services Education/healthcare 18.1 65.5 20.3 All industries 18.2 66.7 21.2 Source: BBS Census of Enterprises, 2001/2003

470.5 490.9 512.7 373.9 367.2 196.8 282.5 227.7 293.3 292.4 388.5

38.9 56.6 249.6 38.0 58.0 83.4 35.1 58.9 28.2 26.7 44.6

Table-3 The structure of industries in Bangladesh with respect to size of firms, 2001/2003 % of establishments % of total persons employed Small Medium Large Small Medium Large Food and tobacco Textile manufacturing Ready-to-wear apparels Wood, leather & paper_printing Chemicals and Plastics Non-metallic mineral products Fabricated goods, electricals and means of transport Mining and 6.7 14.2 1.8 2.9 1.7 1.6 4.3 0.2 0.4 0.9 0.2 0.2 0.1 0.9 0.3 .. .03 1.2 1.7 0.2 0.2 0.9 0.3 .. 2.8 6.0 0.7 1.1 0.7 0.9 1.6 0.1 0.5 1.3 0.3 0.2 0.2 1.3 0.5 0.1 3.1 13.2 20.1 1.4 1.7 4.0 1.7 0.2

manufacture nes Various personal 23.6 1.2 0.8 9.3 1.8 5.1 services Education/healthca 31.1 1.5 0.8 12.6 2.2 5.2 re All industries 87.9 5.7 6.4 35.9 8.5 55.6 Note: These percentages are relative to the total number of establishments, and total employment by the private-sector SME sector Source: SME Cell, using data from BBS Census of Enterprises, 2001/2003

Table-3 shows the percentage importance (in terms of both number of units and the employment levels) of SMEs in the overall world of enterprises. The main result to report is that the number of SME units simply dwarf the number of large enterprises, with typically more than 90% of all enterprises being in the SME class. However, the percentage share of SMEs in total employment controlling for the location is almost always less than for the number of units. In particular, in Dhaka, Chittagong and Khulna divisions, one finds SMEs share in employment is lower than for the economy as a whole. Table-4 essentially shows that the relative importance of SMEs---both in terms of the numerical importance of establishments or employment---within the entire world of enterprises remains roughly similar in both urban and rural Bangladesh. The role of SMEs in production is therefore a-spatial. Table-5 then presents some idea as to the percentage structure of small and medium enterprises, taken separately, across a large number of industries. 5 Like in the discussion of Table-3, we again see the quantitative importance of food, beverage, textile manufacturing, non-metallic mineral products among manufacturing subsectors as providing the basis for small and medium enterprises in Bangladesh. Once again, the importance of services is highlighted.

Table-4: Proportion of SMEs in enterprise population, and in employment, by administrative Divisions of Bangladesh, 2001/2003 Divisions Urban (% of SMEs in the number of urban units) Urban (% of SMEs employment in urban areas ) Rural (% of SMEs in the number of rural units) Rural (% of SMEs employme nt in rural areas)

Entries in each column add to 100, except for rounding errors.

Dhaka 93.8 61.2 95.6 Chittagong 93.7 54.2 92.4 Rajshahi 95.3 65.9 97.9 Khulna 93.8 59.1 95.8 Sylhet 96.6 68.6 91.9 Barisal 95.7 69.4 97.8 All divisions 94.8 63.1 95.2 Source: BBS Census of Enterprises, 2001/2003

65.3 69.1 81.3 70.5 41.5 82.7 68.4

Table-5: Industrial structure of small and medium enterprises in Urban and Rural Bangladesh, 2001/2003 Sectors Proportion of small enterprises in the total Rural Urban enterprises enterprises 0.4 0.2 9.3 8.4 4.6 2.6 0.8 3.3 4.2 Proportion enterprises Rural enterprise s 1.2 7.4 29.2 1.0 .4 .1 .4 .7 of medium in the total Urban enterprises

Mining

Food & tobacco 16.6 Textiles MFG 58.7 Wearing apparels 0.3 Wood products0.2 Tanning, etc 1.1

1.0 9.0 17.5 3.3 1.8 0.2 3.4 4.6 3.1 5.8 0.7 0.7

Paper & printing 0.1 Chemicals plastics Non-metallic mineral pr. Fabricated products Electrical equipment 0.4&

6.1

1.1

47.9

0.7

3.9

.6

0.0

0.7

.2

Mfg. Transport 1.6 equipment

0.5

.9

Utility services0.2 Construction 0.1 Trade Eateries Transport Comm. 2.4 1.4 1.2 &

5.0 0.5 4.9 7.1 22.0

1.9 .6 .5 .3 2.8

3.0 1.8 4.4 5.2 7.6

13.5 7.5

8.4 Finance & Banking

16.9

3.8

Real Estate 0.2 3.9 .3 Source: BBS Census of Enterprises, 2001/2003 Type of human resource and management structure

Production workers can be grouped by skills, and those skills are relative to the industrial or product groupings of which their establishments are part. Table-2 presents a distribution of the SME establishments according to BSIC 4-digit classification of all industries in Bangladesh. Naturally enough, industries are differentiated by the skills, and specific specialization of the workers at various levels. Therefore, a distribution of the establishments according to the industrial groups is also about a decomposition of the SMEs in Bangladesh. The SMEs in Bangladesh has never been explicitly categorized with regard to the underlying management structure of the constituent establishments. However, that is just as well. This is because management structure cant be an absolutist concept: the structure that makes sense must be seen to be relative to the product the unit makes, and the technology it uses. One size or type can not aspire to fit all. That said, it is fair to say that most of the SMEs in Bangladesh have a relatively flat---as distinct from hierarchical--management structure. By flat structure, we mean one in which the management functions of strategy, systems, skills, structure, Staff, Style, and Subordinate goals---which we shall call shared values---are all concentrated in one management suite, and the suite does not traverse more than one management tier. Level of education and skills and management systems In mature industrial structures, industries are sharply characterized by the extent and character of the median educational levels of their workers. As well, sometimes, industries are also differentiated by the kind (generalist as opposed to specialized) of education of their typical workers. Some products are R & D-intensive; some others are capital-intensive. That said, Bangladeshs SMEs dont evince that degree of maturity in its industrial

structure. The average extent of education in ready-to-wear apparels industry---one of the heavy-weights of the industrial structure--- compared with say the plastics industry is not sharply different. Consequently, educational levels and skills levels are not really much of a differentiator. Technology and machinery installed Perhaps, there is room for some discussion about the situation about the choice of technology and the type and sourcing of machinery installed in the industries. Bangladeshs textiles and apparel-export industry has a strong European predisposition: Bangladeshs spinning industry wears an almost an European dcor in that virtually all the spinning mills have chosen European equipment. Some of the spinning mills are very highly mechanized, with employment size less than 100 and thus eligible to being considered of medium in size. The ready-made garments industry---the focal point of the medium enterprises in the economy---labour intensity is higher. In fact, the ratio of wages and salaries to value added in the RMG industry is one of the highest among all manufacturing industries in Bangladesh. A look at Table shows that the SMEs as an industry has as many as 11 product groupings. The most important industrial category which really dominates the SMEs as enterprises is ready-to-wear garments, and the second most important category is textiles weaving. The 3 rd most significant industrial grouping is about food processing. Clearly, the number and the type of machinery in each of the industries being discussed here are categorically different from each other. For instance, in the ready-to-wear garments industry, the dominant type of equipment comprises sewing machines. Typically, these sewing machines are of Japanese Juki brand, or Brother brand: standard kinds of industrial sewing machines which sew at very high speed. Other comparatively peripheral equipments are (i) stitching machines; (ii) cutting machines; (iii) lining machines, etc. The typical garments mill is not really characterized by labour-intensive technology, as the typical capital-labour ratio is understood to be US dollar 3000. The textile weaving industry is slightly more labour-using, with a capital-labour ratio of US $ 2600. Textiles spinning is the most capital-intensive, with capital-labour ratio of more than US $ 4000. Capital-labour ratio in food processing---at US $ 2400--- is significantly lower compared with either garments industry or textiles industry. The tendency increasingly is towards choice of more and more mechanized technologies in manufacturing industries. Access to finance and markets Table-6 gives an idea of the role of small and medium enterprises as destinations for bank credit in 2004 and 2005. Bangladeshs classification of bank advances lumps medium enterprises with the large enterprises, while small units are lumped with cottage-based units. As such, unfortunately, it is not possible to speak of the access to finance issues for SMEs per se. We know however separately that SCIs corresponds to more than 99% of all productive establishments in Bangladesh.

Out of 3.8 million establishments of all kinds in Bangladesh, only 10798, or just about 0.3% happen to fall in either medium or large establishment size class based on employment size. The percentage is even much lower in manufacturing or trade---the two subsectors from which the case studies in this paper are drawn. And yet, such staggering smallness of the proportion of medium and large establishments is coupled with a preponderance of large and medium enterprises in total credit disbursements from the banking system. It is quite safe to assume that of total credit disbursed to large-andmedium class, an overwhelming majority ---perhaps, 80% or so---is arrogated by large establishments. It becomes quickly clear that SMEs, for all their numerical superiority among establishments, receiving bank credit is the exception and not the rule. Why is the access to finance for the SMEs in Bangladesh not even based on neutral ground, not to speak of rosy or good? This is because the issue of bank credit is based on the ownership of collateral: bankers insist on immoveable property for collateral. Only about 15-20% of the owners of SMEs own any immoveable property at all in which the bankers are interested. This automatically excludes about 80% of SMEs from being among the privileged client of a bank loan.

Table-6 Percentage distribution of advances made by PCBs, FCBs and NCBs in 2005 and 2004: By receiving sectors (Numbers are percentages; last row shows the disbursements in Tk. crores) Name of Sectors and type Of financing Privat e Comm ercial Banks, 2005 Privat e Comm ercial Banks, 2004 Foreig n Comm ercial Banks, 2005 Foreig n Comm ercial Banks, 2005 State Comm ercial Banks, 2005 State Comm ercial Banks, 2005

Agriculture Large & Medium industry SCI WC large/medium industry WC for SCI

0.8 14.0 0.7 17.2 .9

0.6 11.4 .6 14.4 .7

0.1 10.9 .6 27.2 1.4

0.1 11.1 .6 26.3 1.3

56.7 17.9 .9 7.1 .4

10.8 21.1 1.1 17.9 .9

0.9 0.8 2.2 1.0 0.0 0.0 24.9 21.2 31.7 37.6 100.0 100.0 7819. Total advances 53029 40298 8 6629 Note: SCI stands for small and cottage industry; capital

Construction Transportation Storage Trade financing Miscellaneous Total

8.7 1.8 0.2 46.6 9.1 100.0

15.7 7.8 1.6 39.0 8.2 100.0

1.6 0.2 3.0 7.7 4.6 100.0

6.7 0.8 1.3 30.2 9.3 100.0

10637 37662 WC stands for working

Access to markets No custom study has ever been done in Bangladesh of the division of the output of SMEs into domestic sales and those overseas. However, some broad-brush idea of this issue can be provided here. Of the industry that are clearly export-oriented in Bangladesh, the following stand out (Table-7). Table-7 Importance of SMEs in export receipts of Bangladesh, 2004/05 Name of subsector(s) Exports producing industrial Exports during goods that are during 2004/05, exported 2004/05, US US $ $ Million Million Due to SMEs a) Woven garments b) Knitwear c) Leather d) Jute goods 3598 2819 221 307 450 352 94 12 0 Proportion exports accounted by SMEs of Definition of SME for

12.5 12.5 42.5 3-5 0

e) Fertilizer and 197 chemical products

Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers

f) Footwear g) Ceramic products h) Engineering goods i) Petroleum products j) Handicrafts k) Others Total exports

88 29 85

44 0 20 0 5 n.a. 977

50 0 22-25 0 100 n. a. 11.3

by- 35 5 621 8652

Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers Between 10 and 99 workers

Source: All estimates are based on trade estimates, and not based on detailed survey(s). Use of Information Technologies (IT) SMEs have very limited use of information technology (IT). Accounting package is used by 1-2% of the SMEs. The use of computers is revealed by say 15% of the SMEs, while the use of the Internet for business purposes applies to say 8-10% of SMEs. The role of quality certification is minimal among SMEs in Bangladesh. There is no SMEs that has received ISO 9001:2000 certification except in the software, footwear, apparel, cycle-manufacturing industries. Wherever exporting is one of the drivers of the firm, quality-assurance certification becomes an imperative. However, SMEs have ways to go before one can cite this aspect of management of quality as a role model in any serious discussion. Some SMEs in Bangladesh have availed of 5-S model of productivity enhancement. This is particularly true for a small number of medium-sized enterprises in the pharmaceutical industry of the country. MICRO---one of the pioneers of electronics-goods production with inspirational leadership---had availed of the entirety of Total Quality Management (TQM) and also Just-inTime (JIT) inventory policies. Major problems and issues challenging competitiveness of SMEs in the country?

According to the Japan Center for Economic Research, which has produced Competitiveness Index for 50 countries of the world for four years since 1980, there are eight determinants of competitiveness for nations, namely, internationalization; enterprise; education; governance; science and technology; infrastructure; finance; and IT (http://www.jcer.or.jp/eng/pdf/potential2005.pdf). According to the World Economic Forum, the following question highlight the ingredients of the business environment that positively impinge upon productivity of SMEs. Does the government maintain an arms-length relationship with respect to the private sector, or does it play favorites? Does the judicial system allow for the reasonable, expeditious, transparent, and low-cost settlement of disputes, or is justice for sale? Is tax revenue channeled back into the economy through productivity-enhancing investments in human capital and infrastructure, or is the money wasted on inefficient projects, or, what is worse, is it mostly stolen? Is the regulatory environment hampered by unnecessary layers of bureaucracy and red tape, reducing competitiveness and raising the costs of transactions and operations? How efficiently are new technological innovations absorbed, and is attention being paid to constantly upgrading the countrys educational system? Does the country engage with the outside world with openness and self-confidence, or with fear and ambivalence? What is the role of property rights and institutions? With a slight paraphrasing of the above, the following five appear pertinent to enterprise competitiveness vs. SMEs, namely, (a) modernization of the technology and management processes in the enterprise; (b) worker educational and training attainment; (c) the scope and quality of the infrastructure; (d) commitment to innovation, product quality and customer satisfaction; and (e) the harnessing of information technology (IT) to serve the customer well and to shave marketing and communications costs. Unfortunately, it is not possible to write authoritatively about how well Bangladeshs SMEs fare with regards to these competitiveness drivers, because the country has never carried out nationally representative sample survey(s) to probe these questions.6 Having said that, successful SMEs of the kind that we have included in our roster of case studies amply shows that in spite of the overall relative backwardness of both the level of management and technical expertise, and of the physical infrastructure, some individual firms respond creatively and effectively. They innovate amid leanness of resources, demonstrating in the process a significant amount of creative initiative, an innovative bent of mind. These are the people who can turn on a dime while finding solutions to their own production and technology problems. We have provided some instances in our case studies.

With financial assistance from the Asian Development Bank (ADB), the SME Cell in the Ministry of Industries (MOI) is now slated to run a set of nation-wide surveys which will sample a representative collection of SMEs in Bangladesh. An incisive questionnaire will be administered for this purpose and, it is believed, will generate information about all of the foregoing correlates of productivity and competitiveness by SMEs in all industrial groups in the country. The survey is expected to commence sometime in 2006 now.

Development implemented

public

Initiatives,

policies

and

programmes

The Policy and Institutional Framework for SME Development An exclusive focus on small and medium enterprises (SMEs) in Bangladesh is a relatively new concept. For much of the past, it was Small and Cottage Industries (SCIs) which were the operative category in the mindset for public interventions for industrialization. The focal point of the delivery of public services for that stated purpose was Bangladesh Small and Cottage Industries Corporation (BSCIC), a parastatal that was created in 1957 on the basis of an Act of the Parliament. A brief description of the BSCIC will be moot at this stage. BSCIC The operating divisions of BSCIC in decreasing order of importance are (i) promotion and extension; (ii) projects; (iii) marketing, technology and design. Because roughly 63% of the revenue budget of BSCIC is allocated to the P & E division, it follows that this is the flagship division. The main activity of this division is to provide pre- and post-investment counseling of manufacturers and tiny producers. Pre-investment counseling consists of spotting timely and potentially profitable small-business opportunities, profiling potentially viable projects based on such opportunities; identifying and matching up entrepreneurs with such projects; and then supporting such establishments through the provisioning of credit and some infrastructural facilities. In the 1980s and 1990s, the supply chain of industrial entrepreneurs for the P & E to run up big performance scores used to be managed and mobilized by an extensive project Development of Rural Industries (DRI). The DRI was subsequently absorbed into the regular, revenue budget of the country, inside the P & E division. The mandate of this P & E division is one of two majors interfaces between BSCIC and entrepreneurship development. The number of industrial entrepreneurs rose from 34219 in 1998/99 to 64, 704 in 2002/03-- The other BSCIC major entrepreneurial involvement of BSCIC has been with the Women Entrepreneurship Development Programme (WEDP). While the first was about spurring entrepreneurship among SCIs in generally, WEDP worked with women only. WEDP was an extensive programme. Over a period of some 20 years starting from the early 1980s, WEDP created more than 40,000 female-headed establishments in such sectors as custom rice-milling, goat rearing, poultry-raising, and the like. For much of its life, the project received good billing from evaluations on account of a reasonably good repayment of the credit distributed. The other important programme of BSCIC is about the Industrial Estates (IE). Under this IE programme, BSCIC develops land and some essential infrastructural support services from a greenfield environment and then invites entrepreneur applicants to come and set up shop aboard its premises. After an initial screening, BSCIC sends a short-list of the names of aspiring entrepreneurs to the District Evaluation Committee (DEC) where the final selection of awardees is made. These latter are then invited by BSCIC to take

possession of the industrial plots. BSCIC does fork out significant up-front subsidies to the awardees. The entrepreneurial development that BSCIC has brought about is not of a Schumpeterian type where a break-through idea or a commercially keen insight, which was so far not spotted by anyone, is somehow spotted by someone. When followed up and implemented in the form of a commercial venture, such a breakthrough becomes a torrent from a trickle. In stead, BSCICs contributions to entrepreneurship development has more been in the nature of every-day infusion of counseling, credit, some small input of design and market-intelligence to men and women of small and tiny means so that they could start their own business, howsoever puny, lowly and initially challenging. This has undoubtedly made a not insignificant contribution to the emergence of small and tiny businesses in Bangladesh owned by men and women who would otherwise have had no opportunities to open their own businesses. Efforts of the Government to promote small and medium enterprises The Government of Bangladesh has announced the Industrial Policy 2005. This policy document states: " the SME sector has been given priority as a privileged sector". The PRSP states:"The Government will pursue an employment intensive industrialization with emphasis on SMEs and exportoriented industries". The Government is committed to pave for industrialization led by the private sector amid a business environment that can bring out the best among all SME stakeholders. It is in the evolution of just such a business environment--- good and available infrastructure, welltrained and broad-based human resources, vigorous entrepreneurship bred out of an entrepreneurial culture, performing credit, insurance, venturecapital markets, and markets for complementary expert services---that we at the Ministry of Industries would like to take advantage of the TA resources that ADBs financial assistance has made possible in the corpus of SMESDP. The Government created a Small and Medium Enterprise Cell (SME Cell) in the Ministry of Industries (MOI) in 2003 so as to provide a focal core for implementing policies and interventions that selectively take care of SMEs in Bangladesh. Subsequently, government constituted in October 2003 an SME Taskforce which was based in the office of the Prime Minister, with the Principal Secretarty to the Prime Minister in the Chair. The SME Taskforce was appropriately blended with participation from the Government, the private sector, academia and the civil society. The Taskforces report was approved by the Cabinet of ministers, early in 2005. Based completely on the contents of the report of the SME Taskforce, the Government of Bangladesh issued, for the first time, Small & Medium Enterprise Policy Strategies, 2005---which will provide the framework for interventions and policy strategies for the development of SMEs in Bangladesh. One of the highlights of the Policy Strategies is that the Government constituted a Small & Medium Enterprise Advisory Panel as an independent and meritocratic brains-trust for the MOI for all developmental, technical and structural advisories. The SMEAP comprises again participation from the private sector and the civil society, and at the moment is prestigiously headed. The

Ministry of Industries is very responsive to the SMEAP, and the two have forged a real synergy in the interest of the development of SMEs. In the private sector, the following four have been important projects for the fostering of entrepreneurship in Bangladesh: (i) the JOBS project, funded by United States Agency for International Development (USAID); (ii) Katalyst, funded by a consortium comprising DFID, Swiss Development Corporation and the GTZ and implemented by SwissContact, a Swiss consultancy; (iii) South Asia Enterprise Development Fund (SEDF). We confine ourselves to the Katalyst and SEDF for the moment.

Private sector activities in the field of SME promotion Any account of the promotion of SMEs through private sector would be incomplete without a proper treatment of the activities of two substantivelyfunded BDS effort in the country, namely, Katalyst and SEDF. Katalyst is a 5year project funded by DFID, SIDA and Swiss Development Corporation (SDC), and is worth US dollar 25 million in funding between 2002 and 2007. It is the largest project of its kind funneling embedded services to what the project calls SMEs. The project has a head-count of 45. With a funding of US dollar 5 million annually, and with a total funding of the equivalent of US dollar 25 million, it is clear that this project had very substantial funding on its hands. The first important strategic decision Katalyst took was that it established a working lien versus the Ministry of Commerce. The primary locus of responsibility of the MoC is spurring of Bangladeshs exports or deemed exports. The industrialization of Bangladesh was not a subject-matter of direct relevance to the MoC. KATALYST has developed an integrated approach based on the sub-sector services methodology. It consists of five stages: 1.Research 2.Analysis 3.Service market identification 4.Interventiondesign 5. Monitoring & Evaluation The key characteristic is that prior to the interventions in the markets, their constraints and the opportunities need to be understood and analyzed with respect to the possible relevance for business services. KATALYST's goal is to increase the competitiveness of small and medium enterprises in selected areas and sectors with a purpose to develop more effective markets for business services in the Bangladesh economy. An

indicator of KATALYST's growth will be an increase in employment and in incomes in SME sector of the economy. KATALYST has focused its activities on the development of some of the SME sectors in Bangladesh. The first subsector to engage the attention of Katalyst was the aromatic rice subsector. The exports from aromatic rice in Bangladesh rose from a 100 tons to 3000 tons only over a fifteen year period. In 2003, the two next subsectors to engage the attention of Katalyst are agro-tools and pond fisheries. In 2004, furniture, plastics and vegetables have engaged the attention of this project. Clearly, Katalyst has worked with a fairly wide range of sub-sectors, with very highly varying densities of SMEs within them. The following shows the most major output from Katalyst since 2002, and gives an idea of the evolving focus of the project: (a) Subsector Market Assessment of the Aromatic Rice Subsector, DFID & IDE Bangladesh, 2002 (b) Subsector Market Assessment of the Aromatic Rice Subsector, DFID & IDE Bangladesh, 2002 Pond Fishery Subsector Service Market Assessments, Bangladesh, IDE & KATALYST 2003 (d) Assessing Supply of and Demand for Quality Management Services in Bangladesh, Katalyst, 2004 (e) The Accounting, Financial Advisory, and Taxation Services Market in Bangladesh, Katalyst, 2004 (f) Design of the Katalyst project, Bangladesh, June 2004. Crop diversification in agriculture, fisheries, manufacturing, cross-cutting support services, business process improvements---are in the mix of activities so far undertaken by Katalyst. Katalyst has tasked itself to make a difference, inter alia, by making industrial and rural services available mainly for the following seven product areas, namely, agro-tools, furniture, plastics, vegetable, fisheries and bamboo. As well, Katalyst has a center of expertise and regulations to offer advocacy services to the Government in advisory capacity. A typical subsector project consists of (i) donor identification of a sub-sector; (ii) SBS mapping and constraints analysis by a consulting team; (iii) selection of service market and service-market assessments; (iv) start of project activity (or not); (v) intervention design; (vi) intervention(s); (vii) monitoring and evaluation. Katalyst has so far initiated project activity in this fashion in vegetables production, plastics, agro-tools. Detailed monitoring and evaluation of project will be launched in the near future. According to Katalyst, a mid-term evaluation of itself found results to be broadly positive.

Of late, Katalyst has gone into the territory of partnering with two Bangladeshi companies to develop accounting, financial management and taxation training packages for small enterprises. Under the agreement, CEC and Skill Plus will develop a package and give training to SME entrepreneurs on accounting, financial and taxation management. The training package will be promoted under the 'More business' campaign, which is a joint initiative among Banglalink, Standard Chartered Bank, The Daily Star---three of Bangladeshs most successful corporate icons--- and Katalyst. Katalyst clearly has strategic partnerships with some of best brands in Bangladesh, although the nexus between these brands and the task of spurring of productivity and competitiveness of SMEs in Bangladesh remains, at the moment, unclear. The project is one year shy of its completion. SEDF The SouthAsia Enterprise Development Facility (SEDF), a newly launched initiative funded by the IFC and other donors, which has targeted its efforts towards greater SME financing from local Bangladeshi banks. In June 2002 SEDF kicked off operations with a conference where it brought to Dhaka several SME finance experts and officers from highly successful SME lending institutions worldwide like Business Partners of South Africa, PlantersBank of the Philippines and the National Development Bank of Sri Lanka. Local banks have, according to SEDF literature, since responded very positively to SEDFs access to finance program: Dhaka Bank Limited has already signed an agreement with SEDF to collaborate on training and TA on information technology (IT), marketing, human resource development and credit management. SEDF is also working with numerous other local financial institutions to make them aware of the profitability potential of Bangladeshs large SME sector. Between 2002 and to-date 13 banks have entered into the status of what SEDF called partner financial institutions (PFIs).

SEDF undertakes technical assistance programs for partner financial institutions (PFIs) revolving around four strategic pillars; commitment, knowledge, efficiency and tools.

Commitment: to be measured through strategic allocation of resources to SME finance; can be achieved through advocacy, strategic interaction, benchmarking with peer financial institutions. Knowledge: to be spread at various levels of the institutions; can be achieved through training, exposure to the best practices, institutional development programs. Efficiency: an imperative for sustainability of the SME finance program; to be measured in reduced time and costs of SME loan processing; can be achieved through instituting performance-based HR polices, process automation and procedural streamlining. Tools: measured through the number of financial products available to SME finance; can be achieved through introduction of new products such as factoring.

The underlying principle driving all technical assistance programs is sustainability. Enhancing Commitment to SME Finance Financial institutions are working with the SEDF on a 50:50 cost-sharing basis. Advocacy: SEDF staff members keeps PFIs abreast of the latest developments in SME finance techniques, benchmarks and trends. SME strategy formulation: SEDF has helped two PFIs in the process of SME strategy formulation through conducting institutional diagnostics and structured strategy workshops. This is in addition to the four PFIs which received assistance from SEDF on SME strategy formulation last year. The number of PFIs that come to SEDF for SME strategy formulation consultation has fallen from 4 in 2003 to 2 in 2004. Spreading Knowledge of SME Finance SEDF organized study tours for PFI senior management to best practice SME finance institutions in India and Sri Lanka. SEDF has organized a training program on Sales Leadership in order to enhance selling skills of the field level PFI professionals. SEDF organized five 5-day training programs on the Fundamentals of Good Management. One of the training programs was conducted by the Singapore

Institute of Management and the remaining four by a local consulting firm. Over 110 PFI professionals attended these programs. Improving Efficiency in SME Finance SEDF has developed Credit Scoring modules at three PFIs as pilot programs. This will enable these PFIs to reduce the time requested for screening SME loan applications. SEDF has assisted a PFI in its automation through implementation of a core banking software. The first phase of business process re-engineering has been completed by SEDF consultants. The bank, along with its 18 branches, is expected to go online by the end of 2004. A comprehensive risk grading framework has been developed for a PFI which will enable the company to better manage its lending risks and adopt riskbased loan pricing policies. The assignment was carried out by the leading Indian credit rating agency, CRISIL. IT Diagnostics: SEDF conducted IT diagnostics for five PFIs. The diagnostics was aimed at identifying gaps in software and hardware infrastructure for catering to the SME client segments. Redefining the HR policy: SEDF has helped a PFI in instituting a performancebased human resources policy which encompasses recruitment, job description, assessment, incentives and development of the bank staff. The study was carried out by a local consulting firm. ISO diagnostics: with a view to streamlining processes/procedures and promoting efficiency, SEDF has carried out an ISO diagnostics of a PFI. The first phase of this on-going project has been completed. The PFI aims for an ISO 9001 certification audit by the end of 2004. PROBLEMS AND CHALLENGES FOR SME DEVELOPMENT 1. Intense competitiveness of the global and domestic market-place in which the SMEs have to compete; 2. Secularly-increasing quotient of specialised knowledge and codified R & D that have become defining characteristics of products and competitors in globally-integrated markets; 3. Inequalities in the distribution of wealth, including human-capital, that lead to a crowding out of SMEs in general, and small enterprises in particular, from participating in markets for venture capital and credit; 4. Deficient foundation of policy-relevant knowledge and information of a kind that can make a difference to the pro-poorness of the development strategy for SMEs growth; 5. Inadequate level and uneven distribution of execution, design and implementation capacities in the facilitators and providers so as to spur competitive growth of their clients in the shortest possible time;

6. The inherent difficulties of dealing effectively with all government failures, market failures and enterprises own failures in the interest of expeditious development of SMEs. SOME IMPORTANT STEPS TO BE TAKEN FOR SME SECTOR 1. A two-stage stratified random sampling of SMEs throughout Bangladesh slated to start early in 2006, so as to bench-mark, for the first time in Bangladesh, SME comprehensively; 2. The crystalisation of keen policy-relevant insights from this survey which will hopefully input substantively into the formulation of a strategic plan of action; 3. A conscious design to embed all policy planks into Bangladeshs Poverty Reduction Strategy Programme; 4. The formation of an SME Foundation within the next 18 months or so, comprising the SME Advisory Panel and SME Cell to become an independent private-sector Foundation created expressly by Government action, and tasked comprehensively with all matters pertaining to the development of SMEs throughout Bangladesh in a thoroughly pro-poor manner; 5. An well-orchestrated effort to funnel much-needed provisioning of debt-capital and R & D funds into the world of innovative and deserving SMEs; 6. Upgrading of all relevant kinds of capacities in the SME sector. PART B: DEVELOPMENT INITIATIVES, POLICIES AND PROGRAMS IMPLEMENTED BY THE VARIOUS AGENCIES IN THE COUNTRY Initiatives, Policies A 1 2 Programs, Public Sector Organizations/ Donors Promotion of Entrepreneurial Culture SME promotional SME Cell Councils/bodies SME Advisory Panel Entrepreneurship development Bangladesh Small promotional campaigns & Cottage Industries Corporation Awards for Successful SMEs Small Business Entrepreneur of the Year Quality Awards for SMEs BEING

Private Sector Results Organizations (Success/Failur e) Just formed

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Dhaka Chamber of Commerce & Industries

President/Prime Ministers mention about entrepreneurship in his/her speeches/statements and budget statements Entrepreneurship Development Action Plan at the national level

Prime Minister, in her speech, mentioned about SMEs.

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Very recently an Action Plan has been prepared and approved by the government Governments vision promoting SME Policy entrepreneurship, innovation Strategies have and competitiveness at the been adopted by national level the government Promotion of Entrepreneurship Profile for SMEs Promotion of benchmarking To be done Model beginning and best practice networks has been made on this score by the efforts of such privatesectors efforts as Katalyst. Promotion of Women and Government has Women trade Youth entrepreneurship been bodies are implementing working for different projects women for women entrepreneurshi entrepreneurship p development development Promotion of e-business and Government has Private sector ICT development been ICT business is implementing ICT growing fast projects Promotion of technological Trade bodies innovation for SMEs Promotion of financial products ADB loan for SME Private and schemes for SMEs lending commercial State-owned SME banks and bank financial institutions Productivity promotional National campaign for SMEs Productivity Organization Promotion and availability of Bangladesh Katalyst/SEDF/ SME database, SME Bureau of GTZ/ JOBS/ publications, SME web-based Statistics MIDAS portals for information and SME Website business matching launched by SME Cell

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Provision of infrastructural facilities Regulation and Policies Laws/Regulations/Policies for SME development at the national level Availability of a SME Framework Policies /Regulations to support technological development Policies/Regulations for ICT development Policies/Regulations for SMEs access to markets Policies/Regulations for SMEs access to financial facilities Policies/Regulations for Entrepreneurship Development (separate policy in addition to the SME Policy, if any) Bankruptcy laws which smoothens the exit of enterprises that are not sustainable or competitive Labor Laws and employment regulations affecting SMEs Infrastructure facilities/exemptions provided to SMEs Specialized Prudential Regulations for financing to SMEs Regulations on Financial Incentives for SMEs i.e. tax exemptions/benefits, duty concessions for SMEs Policy/Regulation for Productivity Development in SMEs Administrative Environment/Framework Availability of permanent or ad-hoc units/cells mandated to represent SME views in the regulatory process

BSCIC Industrial Estates Industrial Policy 2005 and SME Policy Strategies 2005 Project on ICT/web-portal is under implementation

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Industrial 2005 Bankruptcy 19=== Yes

Policy

Law

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BSCIC provides Not yet Nothing special

Not yet

SME Cell Ministry Industries

under of

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Councils/Consultative National bodies/Task Force for SME Taskforce on SME development and/or to take Development SMEs views into consideration while formulating policies and procedures Experts Advisory/Advisory SME Advisory Board/Specialized Boards set Panel up to develop SMEs (in general or in specific sectors) Availability of Productivity yes improvement programs for the SMEs Availability of Entrepreneurship Yet to be Profile/Entrepreneurship developed Indicators for the country Systems/programs to monitor the entrepreneurial profile, entrepreneurial activity and entrepreneurial business environment (EBE) Programs/focus on developing Bangladesh BankEntrepreneurial Mind-sets, the Central bank corporate vision and corporate entrepreneurship Procedures for development of SMEs: Registration of firms, formation Yes of a new company, listing requirements Exit of uncompetitive firms No Compliance and reporting No. Licensing No. Accounting standards Yes IT driven communication No through web portals Taxation Yes Utilities Yes, but patchy Standardization No. Quality certificates, ISO Essentially no certification Entrepreneurship Training and Education

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Entrepreneurship Curriculum at universities and colleges (covering start-up strategies, entrepreneurial behavior, application of marketing and finance to start-up, entrepreneurial finance such as venture capital and angel investors, intellectual property rights, franchising, corporate entrepreneurship/entrepreneur , prototyping, technology transfers, etc.) Internship programs/attachment with enterprises for developing entrepreneurial skills Linkages between SMEs and colleges/universities Institute of Entrepreneurship (separately discuss model of the institute and services provided, if applicable) Entrepreneurship Training programs i.e. technical trainings, management trainings; trainings on corporate social responsibilities, entrepreneurship ethics, productivity and quality consciousness, use of information technology, ICT development, developing internal synergies and alliances with their employees, etc

Entrepreneurship is taught at some of the best private universities as part of BBA and MBA courses.

No

Very little Bangladesh does not have any institute of entrepreneurship Entrepreneurship development is included in courses offered by Bangladesh Institute of Management (BIM), which is under the Ministry of Industries. National Productivity Organization (NPO), also in the MOI, actively seeks to enhance the standards of qualityadministration in practice in the country

Other Skill Development Training Programs and Institutes (directed towards self-employment and entrepreneurship development, etc)

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Quality Standardization and Testing Institute Other Training Institutes for No human resource development of SMEs Network and Linkages for SME Development Availability of Enterprise There are Cluster (separately discuss between 30 and parameters and dynamics of 40 clusters based the cluster model, if on one or the applicable) other products, in the country.

More than 100 Vocational Training Institutes (VTIs), which are variously under the administrative oversee of several ministries (Labour, Textiles, Education), exist to offer relatively short-term reskilling training programmes No

Availability of business development and business support service providers (Separately discuss specific models of these service providers, specific services are being provided, and how are these services marketed to the SMEs)

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BSCIC used to perform a lot of profiling and then disseminating, among its own network of SCI entrepreneurs, of potentially viable business and industrial ventures. However, it essentially no longer does that, due to funding problems. Similarly, technology universities such as BUET is often approached by especially engineering industry owners for support in terms of assessing steel strength, and the needed degree of tempering in metals, for an agreed fee. Availability of business No. There are some advisory/consultancy services consulting firms for SMEs who sell such expert services Strategic alliances and joint No No ventures within domestic and/or international markets in SMEs Sub-contracting support for Yes, in apparel SMEs by larger enterprises and knitwear industries Availability of business No No incubators (separately discuss the model of incubators most commonly used)

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Linkage programs for market access /programs, product development, technological access, etc for improving domestic and international market access for SMEs Supply chain and value chain networks in the country and internationally Technology and ICT Initiative for cross border technological cooperation (joint R&D, joint commercialization), regional association for technology-led enterprises Technology business incubators Availability of back-up/pilot and demonstration projects which foster innovation and technological development Facilities for developing technopreneurs availability of knowledge centers, research and development centers, and testing laboratories, etc Facilitation of benchmarking exercises and sharing of best practices Best Practice Networks Availability and facilitation of ebusiness and e-commerce practices, use of internet and other e-market, e-business methodologies Availability of web-based SME portals, SME database, information networks Financial Support Support and role of the Central Bank in providing financial access to SMEs Availability of specialized Financial Institutions for SMEs Specialized financial products and incentives for small enterprises

No

No

Yes

Yes

No

No

No No

No No

No

No

Benchmarking facilities exist in desultory manner in BUET and other technology universities

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Availability of SME Fund, Technopreneurship or Intrapreneurhsip Fund, etc Availability of Venture Capital Funds or risk financing mechanisms, risk mitigation fund, credit guarantee schemes Grants for SMEs for technological assistance, market access, productivity improvements, research and development, innovations, product development, ebusiness, ICT development, supply chain networks, etc # A 1 2 3 4 5 6 B 1 Question Response Basic Background Information of the SME Name of the SME (organization) Corbel International Limited Name of the Proprietor/CEO M. Saiful Alam Date of Formation 1995 Legal Status Limited-liability company registered by the Registrar, Joint Stock Companies, Bangladesh Economic Sector Agro-chemicals Main Products Distributing insecticides, fungicides, weedicides, etc Business/Operations/HR Strategies (Internal) Does the firm has a corporate vision and Be a market leader; ensure mission statement opportunities for growth farmers through the route of high yield and low costs; contribute to achieving self-sufficiency in food. Corporate mission is to achieve yearly, quarterly and productwise targets. Has the firm chalked out short term and Yes, short-term objective is long term objectives/goals about achieving yearly sales targets. Long-term objective is about achieving and maximizing shareholder value over a horizon of some 15 years. Are annual action plans developed in Annual budget meeting, planning accordance with these objectives? Are and feedback meeting are the employees opinions and feedback conducted with respect to shortmade part in determining annual and long-term objectives. objectives and targets? Does the firm Mid-level managers and division

practices the concept of management by objectives/corporate entrepreneurship? 4 Is emphasis placed on individual responsibility and reward based on results Does the management organizes its human resource in venture teams to deliver the objectives What is the organizational structure of the firm. Is it a flat hierarchy? How is work managed amongst different departments/units. Is there coordination amongst different departments and process of operations? How is this managed? Does the firm believe in innovation and creation of new ideas for products and services? How is this managed? Has the firm taken initiative to develop new products/diversify into new products/business opportunities to match market needs or to enter into new markets. Is this done on a continuous basis. Get examples of these initiatives What is the firms policy on pricing its products/services. Are competitors prices kept into account when determining price levels

heads work in a group to set objectives and targets. Company follows the MBO to achieve the vision and mission Individuals are of course responsible to produce assigned/settled results, which the management considers the basis for reward. Management trained its Human Resources (HR), follow or feedback to achieve the objectives and organization goals. The organizational hierarchy of this company is quite flat, in the sense that keeping costs to the barest minimum is a priority. With five functional divisions--Finance, Marketing, R & D, HR, and Production---all reporting to the CEO, there is ample coordination at work. Company systematically encourages innovation and creativity. It organizes zonal workshops with a view to Company took initiatives of related diversified business to fulfil the markets need, ie mosquito coil-FMCG.

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Management adopts best pricing strategies which competitive and within buying capability of users. Pricing strategies deeply analyzes competitors price to find out the best price level Does the firm explore new markets, both CIL continuously explore new domestic and international on a markets in domestic areas. continuous basis. What are its current Current markets are agromarkets and how did the firm reach this chemicals within which niche status. Has the firm adopted e-marketing segments are continuously or e-business techniques. Does the firm exploring new opportunities to uses internet facilities for sharing its reach the status. E-marketing is information and expanding market not applicable for our agropotential chemical business. CIL share internet facilities gathering and transferring information from

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local and global sources. What marketing strategies are used by CIL provides best cost, the firm to sell its products. Are the 4 differentiation and niche Ps of marketing considered. Are these strategies as per nature of strategies revised from time to time. markets. CIL always consider product, price, place, promotion, which it revises from time to time per the needs of the market. Is the firm conscious of providing quality Quality is CILs commitment. products/services and maintaining it. So, CIL provides quality products How is this ensured. Has the firm and service to our valued acquired ISO certifications customers and CIL seeks to maintain it at all costs. CIL ensures quality by practicing TQM in all of our activities of production, sales, marketing, customer service, R & D, HR, etc. Has the firm taken the initiative to All of CIL equipment and replace old plant and technology platform have not as machinery/technologies or technological yet reached a stage when methodologies for improving production. replacement is imperative. CIL How were new technologies acquired. continually welcome new Were the human resource trained to use technologies for cost-effective new technologies production. CIL launched reskilling of its human resources per the requirements of upgrading of its equipment stock. Has the firm adopted any productivity CIL had adopted TQM, KAIZEN improvement technique to effectively (eliminating unnecessary enhance its operations i.e. kaizen, 5 S, activities) through innovation in total quality management, quality control all of its activities such as circles/work improvement teams, balance production, sales, HR and R & D. scorecard, Just in Time, business process TQM is sought by achieving reengineering, etc. If yes, how are these close-to-zero defects during implemented and managed production, KAIZEN in CILs daily activities. How does the firm monitors and manages CIL monitor operation cost and the cost of its operations/cost of production cost by setting target production. Has the firm devised and by comparing actual with methodologies for reducing cost of targeted cost. CIL reduces the operations/production and overhead cost by adopting economies of costs i.e. bulk purchases, maintaining scale, discount during bulk optimal level of inventories, timely purchase, by maintaining shipments/delivery of products, minimum inventories, minimizing managing utility consumption, human rework and rejects, improving resource placement, business process, communications, and sale skills reducing reworks and rejects, improving of its sales force. communication and selling

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methodologies, etc. Does the firm benefit from economies of scale Is the firm familiar with business control systems such as accounting, record keeping, financial analysis, book keeping, profit center, collections, forecasting, etc. Are these systems used in the management of the business Does the firm have a computer software to manage its business operations. Are HR working on the system been appropriately trained/skilled. Is the firm familiar with ICT development. Has any initiative taken in regard of implementation of ICT. If yes, how have these initiatives helped in the business growth

CIL does practice Business Control System (BCS) both in its Accounts (Financial analysis) and marketing (forecasting). All its divisions are familiar with BCS CIL does use computer software in the interest of more timely and cost-effective management of its business operations. HR managers are appropriately trained in terms of the information systems. CIL has already deployed customdeveloped application software in warehouse, in the interest of having an instantaneous enterprise-wide view of missioncritical variables of senior management interest.its CIL compares business performance, ie growth in sales, profit, return on investment, market shares versus its industry comparators. CIL has a HR recruitment policy by which management hire employees. CIL prefers promotion of suitable in-house candidates to fill new vacancies before it advertises. Every employee has a specific job description approved by the departmental head. CIL developed a semester-wise performance appraisal guideline to evaluate employees, and such evaluation is the basis for award of incentives bonus Promotion is linked with performance. Salaries are market-based: packages and incentives proposals are submitted by field managers comparing with similar industry, then department head

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Does the firm compare its performance i.e. business/production growth, sales growth, cost of production, profit growth, return on investment, market share, staff retention, etc with its competitors in the market (industry indicators) Does the firm have a HR recruitment policy. Is the recruitment policy followed when hiring employees. Are internal employees given opportunities to fill in job vacancies before advertising/fresh hiring Are there explicit job descriptions for each employee Is there a performance appraisal system in the firm. How often is performance appraised in one year. Is there an incentive and reward policy based on performance appraisal Is there a promotion policy in the firm. Is the performance linked to the promotion policy Are the salaries of the employees market based. How are the salary packages and incentives compared to other firms in the sector. How are the salary packages and incentives compared within the firm with

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peer groups

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approves by keeping remuneration package in line with the organization. Salary package and incentives of the peer group are set in view of nature of jobs. Does the firm has policy of giving annual CIL gives two Festival Bonuses, bonuses and other financial incentives to and a performance bonus to its its employees employees Is human resource development Management consider proactive considered important for enhancing HR policies essential to productivity of the firm achievement of high staff productivity. Does the firm have a training policy for CIL organizes semester-wise its employees. Does the firm allocates training program for employees annual budget to training of employees to upgrade skills. The company makes specific allocation in its annual budget on account of staff training. Are internal training programs organized Internal training is provided to for the employees; if yes, how often in employees twice a year (in June one year. Which level of employees are and December). Staff in trained internally production, marketing and quality-control department are a priority in training. Are employees sent on external training Employees trained by external programs; if yes, how often. Which level institutes such as Bangladesh of employees are sent on external Institute of Management (BIM), training Dhaka. Operations staff receive priority in such external training. Does the firm focuses on motivational The firm focuses on motivational programs for its employees. Does the program such as CEO and firm focuses on building staff morale and Departmental Heads visit the retaining its employees field associates to build rapport and to boost morale of the field forces. Is there any employment security offered CIL attaches great significance to to employees. staff job security. Are employees provided employment Employees are offered growth opportunities/career paths within opportunities for professional the firm self-advancement through the route of external and internal training, on-the-job training. Promotion is always meritocratically determined. Other initiatives: The best performer has opportunity for responsibility of diversified business. Business Development/Support Mechanism (External) Did any government The Department of Agricultural

regulation/policies/procedures support the growth of the enterprise. Yes/No, please elaborate Has any government intervention in terms of support organizations, councils, consultative groups, task forces, advisory bodies, incubators, export promotion facilitation, etc facilitated the development of the firm Has the firm accessed/not accessed formal financing. How has this facilitated in the business development Has the firm benefited from any grant fund Does the firm have access to infrastructural facilities

Extension (DAE) has helped CIL, recommending its products to farmers. Governments subsidies have in parted helped.

4 5

7 8

Has the firm benefited from entrepreneurship development programs and other trainings offered by universities and training institutes Has the firm benefited from any technological network, fund or facilitation Does the firm know about the ways of working with bankers, accountants, attorneys, utility providers and tax authorities. How does it handles this Others:

Firm has accessed institutional finance. Without such start-up financial intermediation, CIL could not have reached where it is now. CIL never got any grant money from any source. CILs repacking unit is located in one of the BSCICs Industrial Estates, located some 60 miles from the capital city of Bangladesh. This access to BSCICs fairly developed infrastructure has certainly helped. Yes, from BSCIC.

CIL has benefited from the Internet: it manages its entire supply chain using the Internet CIL has retained services of a professional Chartered Accoutant (CA) so that its workings with bankers and accountants are on solid footing. CIL organizes customereducation program, excursion program for distributors and retailers, foreign tour, special reward for the best marketing performance. RESPONSE Yes No No Yes

# A 1 2 3 4

QUESTION Family Background Do you come from a family that owned a business As a child, did you sell anything to earn money Do you have a relative who is in business Are you between the ages of 16 and 45

5 6 7 8 9 1 0 B 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2

Are you married or single If you are married, is your spouse supportive of the personal and financial risk involved in the business Were you the first-born child in your family Have you suffered the death/divorce of a spouse or parent Do you belong to a middle class family Do you have a lot of family obligations/liabilities Personal Characteristics Are you inquisitive, creative, innovative and aggressive Do you enjoy solving problems Do you like to make things happen Do you enjoy taking personal and financial risks Do you consider yourself free and independent spirit Do you have high need for achievement Do you take rejection personally Do you like to move around a lot Do you feel you are more lucky than hardworking Do you use advice of external consultants Do you believe that you can control your own destiny Are you a consistent goal setter and result-oriented individual Can you make quick decisions Do you have high energy level Do you follow through with implementation when a decision has been made Do you believe in your own power to accomplish goals Do you have high moral and ethical standard Are you dedicated and committed to being in business for yourself Can you inspire and motivate other individuals Do you know how to multiply your talents Have you ever made an assessment of your personality characteristics Do you believe in the power and success of selfdirected learning Do you wake up happy 99% of the times Do you consider yourself ambitious

Yes No No No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No No No No

4 2 5 2 6 2 7 2 8 2 9 C 1 2 3 4 5 6 7 8 9 1 0 1 1 D 1 2 3 4 5 6

Do you provide a period during each day for thinking, studying, planning or relaxation Do you enjoy power, control and authority Do you consider yourself enthusiastic, imaginative and tenacious Do you know how to protect your ideas from thieves Do you have a personal bank account Business Experience/Knowledge at Commencement Did you have specific experience in the area of business you undertake Did you have personal funds to start up your own business Did you have managerial skills when you started your business Were you willing to work longer hours for a minimal amount of money to set up your own business Did you have a college degree or special skills and knowledge from a vocational or technical institute at the start of your business Did you know how to raise money for starting a business or expanding it Did you know how to develop a business plan for presentation to a group of investors/bankers Did you know the four Ps of marketing Did you know how to explore for markets to sell your product Did you know how to determine break-even point. Do you know now Could you read financial statements, project cash flows Business Practices/Knowledge at Present Do you know how to enter into a franchise, JV, technical collaboration, strategic alliances, etc for business growth Are you familiar with current business and tax laws/regulations and policies Do you know how to get free publicity for your products or service Are you familiar with differences and benefits of a proprietorship, partnership and a company Are you aware of the different government and nongovernment programs supporting SMEs in your country Have you benefited from any of these programs Yes Yes Yes

No No

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No

7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6

Are you aware of different entrepreneurship development training programs offered in the country. Have you benefited from them Are you accessing formal financing Can you read financial statements Do you know what motivates customer behavior and buying habits Do you have experience in organization, planning, budgeting, personnel, marketing, advertising, administration, or evaluation Are you respected by your peers at work and by your friends in other areas of your life Do you constantly explore new technologies, markets and business opportunities Do you strive to learn for better business management practices and cost effective methodologies Do you adopt e-business methodologies in your business Do you believe in employee training, motivation and retention

No Yes Yes Yes Yes Yes Yes Yes No Yes

Case Study of Akbar Engineering Works for SME Survey # A 1 2 3 4 5 6 B 1 Question Response Basic Background Information of the SME Name of the SME Akbar Engineering Works (organization) Name of the Proprietor/CEO Md. Ali Akbar Date of Formation 1986 Legal Status Proprietorship Economic Sector Light Engineering (Sub-Contacting) Main Products Jute and Textile Mills Spare parts Business/Operations/HR Strategies (Internal) Does the firm has a corporate Vision: Contribute for the growth of vision and mission statement Light Engineering Sector in a greater extent. Mission: Supply better quality of Spare parts to Jute ant Textile Mills with competitive cost. Has the firm chalked out Short Term objective: short term and long term a) Collect more orders from Parents objectives/goals enterprises for generating cash flow.

Question

Response b) Maintain Lead time for order processing and delivery the output to their parent enterprises. Long Term objective: a) Modernization of product diversification. b) Increase volume of outputs. a) There is no structured action plan for business development. b) The management normally prepare their action plans according to the demand driven order from the parent enterprises.

Are annual action plans developed in accordance with these objectives? Are the employees opinions and feedback made part in determining annual objectives and targets? Does the firm practices the concept of management by objectives/corporate entrepreneurship? Is emphasis placed on individual responsibility and reward based on results

The enterprise responsibility and results.

has reward

individual based on

Does the management organizes its human resource in venture teams to deliver the objectives

The management informed that to produce such type of engineering outputs management / proprietor should himself technically capable to produce output as per demand submitted / collected from parent enterprises. Therefore, the management himself organizes and mange on-the-job training for human resource development at the shop floor level. What is the organizational Yes, the Enterprise maintains flat level structure of the firm. Is it a flat hierarchy through coordinating and hierarchy? How is work participatory approach among manager, managed amongst different supervisor and worker level. departments/units. Is there coordination amongst different departments and process of operations? How is this managed? Does the firm believe in Yes, management has always maintained innovation and creation of new the innovative system for designing and ideas for products and processing of outputs as per demand services? How is this from the parent enterprises. managed? Has the firm taken initiative to The management informed that without develop new taking initiative to develop new

products/diversify into new products/business opportunities to match market needs or to enter into new markets. Is this done on a continuous basis. Get examples of these initiatives What is the firms policy on pricing its products/services. Are competitors prices kept into account when determining price levels Does the firm explore new markets, both domestic and international on a continuous basis. What are its current markets and how did the firm reach this status. Has the firm adopted e-marketing or ebusiness techniques. Does the firm uses internet facilities for sharing its information and expanding market potential What marketing strategies are used by the firm to sell its products. Are the 4 Ps of marketing considered. Are these strategies revised from time to time. Is the firm conscious of providing quality products/services and maintaining it. How is this ensured. Has the firm acquired ISO certifications

products / diversify into new products / business opportunities to match market needs or to enter into new markets, it is not possible to survive in this competitive market. The management determines their firms pricing policy on its products keeping pricing information in the market and thereby fixing up the product price as sub-contacting discipline. The enterprise has maintained its domestic market only. The Management has also plan to take initiative for practicing ICT Network in their business.

Yes, the enterprise always maintain the system and operation of 4Ps in its marketing policy from its production process to delivery system. Yes, the enterprise has not acquired ISO certification yet but without ensuring and satisfying the quality of output they never met the demand of their parent enterprises. The enterprise always ensure guarantee certificate on quality after sales services. a) The enterprises has no broad based initiative for changing machinery / technology but they have replaced their small units of machine/ technology in the production line. b) The enterprises adopted their changed in the technology process by changing capacity building of their work forces.

Has the firm taken the initiative to replace old plant and machinery/technologies or technological methodologies for improving production. How were new technologies acquired. Were the human resource trained to use new technologies Has the firm adopted any The enterprise only maintain productivity improvement productivity, efficiency and cost effective technique to effectively system in their operation. enhance its operations i.e. kaizen, 5 S, total quality

management, quality control circles/work improvement teams, balance scorecard, Just in Time, business process reengineering, etc. If yes, how are these implemented and managed How does the firm monitors and manages the cost of its operations/cost of production. Has the firm devised methodologies for reducing cost of operations/production and overhead costs i.e. bulk purchases, maintaining optimal level of inventories, timely shipments/delivery of products, managing utility consumption, human resource placement, business process, reducing reworks and rejects, improving communication and selling methodologies, etc. Does the firm benefit from economies of scale Is the firm familiar with business control systems such as accounting, record keeping, financial analysis, book keeping, profit center, collections, forecasting, etc. Are these systems used in the management of the business Does the firm have a computer software to manage its business operations. Are HR working on the system been appropriately trained/skilled. Is the firm familiar with ICT development. Has any initiative taken in regard of implementation of ICT. If yes, how have these initiatives helped in the business growth Does the firm compare its performance i.e. business/production growth, sales growth, cost of production, profit growth, return on investment, market

The enterprise always maintains close supervision in every process of production for reducing cost through wastage management, design reengineering, efficient use of supervisor and worker. The enterprise also maintains close and strict measurement system of raw material uses.

The management informed that their record keeping system in the area of accounting, financial analysis and profit center are not maintained like modern record keeping systems. But the enterprise has a regular record keeping system which are process manually. No, the enterprise has not adopted computer software support for manage business operations. But the enterprise looking forward to introduce the computer base system for record keeping.

Yes, the enterprise is always maintaining its performance with other competitors.

share, staff retention, etc with its competitors in the market (industry indicators) Does the firm have a HR recruitment policy. Is the recruitment policy followed when hiring employees. Are internal employees given opportunities to fill in job vacancies before advertising/fresh hiring Are there explicit job descriptions for each employee Is there a performance appraisal system in the firm. How often is performance appraised in one year. Is there an incentive and reward policy based on performance appraisal Is there a promotion policy in the firm. Is the performance linked to the promotion policy Are the salaries of the employees market based. How are the salary packages and incentives compared to other firms in the sector. How are the salary packages and incentives compared within the firm with peer groups Does the firm has policy of giving annual bonuses and other financial incentives to its employees Is human resource development considered important for enhancing productivity of the firm Does the firm have a training policy for its employees. Does the firm allocates annual budget to training of employees Are internal training programs organized for the employees; if yes, how often in one year.

The enterprise has not maintained any strict recruitment policy but they follow a generalized recruitment for hiring worker/ employee.

Yes, there are explicit job assignment for each worker / employee. No, there is no organized performance appraisal system in the firm but based on yearly revenue and profit index and incentive policy maintained.

The enterprise has no specific promotion policy but they offer incentive / bonus based on total performance of the firm. Yes, the enterprise maintain market based salary system. The package salary / wages and incentive system are comparable with other enterprises of Light Engineering and Metal works. Yes, the enterprise has policy of giving annual bonuses and other financial incentives to its workers. The enterprise providing festival bonus and incentive base on basic salary and wages. Yes

The enterprise has no separate budget for training and capacity building.

Yes the enterprise provide on-the-job training for its employee / wokers.

Which level of employees are trained internally Are employees sent on external training programs; if yes, how often. Which level of employees are sent on external training Does the firm focuses on motivational programs for its employees. Does the firm focuses on building staff morale and retaining its employees Is there any employment security offered to employees. Are employees employment opportunities/career within the firm Other initiatives:

No

Yes, the enterprise running their business similar to family culture / discipline. This culture itself has created a sprit of motivation and good morale for their employees / workers.

Since, the type of work highly technical in this sector therefore the management never thought hire-and-fire system for their employee. provided Yes, there are options/ opportunities for growth employee career paths but the scope paths seems to be somehow limited.

a) Quality Creation b) Product Diversification c) Formation of Skill of Workers. Business Development/Support Mechanism (External) Did any government Yes regulation/policies/procedures support the growth of the enterprise. Yes/No, please elaborate Has any government Yes, the enterprise has made intervention in terms of intervention with BSCIC (Bangladesh support organizations, Small & Cottage Industries Corporation) councils, consultative groups, and NASCIB (National Association for task forces, advisory bodies, Small & Cottage Industries of incubators, export promotion Bangladesh). facilitation, etc facilitated the development of the firm Has the firm accessed/not Yes, the firm accessed for formal accessed formal financing. financing but the scope is limited. How has this facilitated in the business development Has the firm benefited from No any grant fund Does the firm have access to No infrastructural facilities Has the firm benefited from The enterprise has enjoyed an entrepreneurship development Entrepreneurship Development Training programs and other trainings from Small and Cottage Industries offered by universities and Training Institute (SCITI) and National

training institutes Has the firm benefited from any technological network, fund or facilitation Does the firm know about the ways of working with bankers, accountants, attorneys, utility providers and tax authorities. How does it handles this Others:

Productivity Organization (NPO). No The authority of enterprise has no sufficient knowledge based capability for making way of communication with bankers, accountants, attorneys, utility providers and tax authorities. The sector has enough opportunity to contribute industrial development by providing inputs for Jute, Textile, Leather, Railway, Transportation and Agriculture sector. RESPONSE Yes Yes Yes No Yes Yes No No Yes No Yes Yes Yes Yes Yes No Yes No No Yes Yes Yes Yes Yes No No

# A 1 2 3 4 5 6 7 8 9 10 B 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

QUESTION Family Background Do you come from a family that owned a business As a child, did you sell anything to earn money Do you have a relative who is in business Are you between the ages of 16 and 45 Are you married or single If you are married, is your spouse supportive of the personal and financial risk involved in the business Were you the first-born child in your family Have you suffered the death/divorce of a spouse or parent Do you belong to a middle class family Do you have a lot of family obligations/liabilities Personal Characteristics Are you inquisitive, creative, innovative and aggressive Do you enjoy solving problems Do you like to make things happen Do you enjoy taking personal and financial risks Do you consider yourself free and independent spirit Do you have high need for achievement Do you take rejection personally Do you like to move around a lot Do you feel you are more lucky than hardworking Do you use advice of external consultants Do you believe that you can control your own destiny Are you a consistent goal setter and result-oriented individual Can you make quick decisions Do you have high energy level Do you follow through with implementation when a decision has been made Do you believe in your own power to accomplish goals

17 18 19 20 21 22 23 24 25 26 27 28 29 C 1 2 3 4 5 6 7 8 9 10 11 D 1 2 3

Do you have high moral and ethical standard Are you dedicated and committed to being in business for yourself Can you inspire and motivate other individuals Do you know how to multiply your talents Have you ever made an assessment of your personality characteristics Do you believe in the power and success of selfdirected learning Do you wake up happy 99% of the times Do you consider yourself ambitious Do you provide a period during each day for thinking, studying, planning or relaxation Do you enjoy power, control and authority Do you consider yourself enthusiastic, imaginative and tenacious Do you know how to protect your ideas from thieves Do you have a personal bank account Business Experience/Knowledge at Commencement Did you have specific experience in the area of business you undertake Did you have personal funds to start up your own business Did you have managerial skills when you started your business Were you willing to work longer hours for a minimal amount of money to set up your own business Did you have a college degree or special skills and knowledge from a vocational or technical institute at the start of your business Did you know how to raise money for starting a business or expanding it Did you know how to develop a business plan for presentation to a group of investors/bankers Did you know the four Ps of marketing Did you know how to explore for markets to sell your product Did you know how to determine break-even point. Do you know now Could you read financial statements, project cash flows Business Practices/Knowledge at Present Do you know how to enter into a franchise, JV, technical collaboration, strategic alliances, etc for business growth Are you familiar with current business and tax laws/regulations and policies Do you know how to get free publicity for your

Yes Yes Yes No Yes No No No No No Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Yes Yes No No No

4 5 6 7 8 9 10 11 12 13 14 15 16

products or service Are you familiar with differences and benefits of a proprietorship, partnership and a company Are you aware of the different government and nongovernment programs supporting SMEs in your country Have you benefited from any of these programs Are you aware of different entrepreneurship development training programs offered in the country. Have you benefited from them Are you accessing formal financing Can you read financial statements Do you know what motivates customer behavior and buying habits Do you have experience in organization, planning, budgeting, personnel, marketing, advertising, administration, or evaluation Are you respected by your peers at work and by your friends in other areas of your life Do you constantly explore new technologies, markets and business opportunities Do you strive to learn for better business management practices and cost effective methodologies Do you adopt e-business methodologies in your business Do you believe in employee training, motivation and retention

Yes No No Yes Yes No Yes Yes Yes No Yes No Yes

# A 1 2 3 4 5 6 B 1 2

Question Response Basic Background Information of the SME Name of the SME (organization) Bengal Plastics Name of the Proprietor/CEO Mr. Murshed Alam Date of Formation 1980 Legal Status Private limited company Economic Sector Backward linkage to apparel exports Main Products High-quality plastics accessories (for ready-to-wear apparel industry) Business/Operations/HR Strategies (Internal) Does the firm has a Yes. The vision is one of becoming the corporate vision and mission largest operation of its kind in the country statement Has the firm chalked out Yes. There is a lot of cheap competition in short term and long term this particular product segment. In the short objectives/goals run, the goal is to survive mainly price-based competition, building the company brand on

Are annual action plans developed in accordance with these objectives? Are the employees opinions and feedback made part in determining annual objectives and targets? Does the firm practices the concept of management by objectives/corporate entrepreneurship? Is emphasis placed on Composed of a number of production individual responsibility and processes that together hew towards certain reward based on results common production goals, team-work, not individualism, is the hall-mark of the technology at work at this firm. Within that framework, there is a well-defined structure of incentives in which rewards and responsibility were rigidly defined and enforced. Does the management This model is primarily the way this firm organizes its human works. resource in venture teams to deliver the objectives What is the organizational The organizational hierarchy is a tiered one, structure of the firm. Is it a with three tiers. The top-most tier comprises flat hierarchy? How is work of the board of Directors, which is dominated managed amongst different by the founding chairman of the company. departments/units. Is there The next tier comprises a school of the firms coordination amongst senior-most production managers. The different departments and bottom of the pyramid comprises the process of operations? How production workers, of which there are about is this managed? 95 at the time of interviews. Does the firm believe in The firm strongly believes in innovation, in innovation and creation of creation of new ideas. For instance, it has new ideas for products and already introduced a kind of lightweight services? How is this plastic brood-stock for the basic raw material, managed? which is sturdier than the predecessor raw material. Has the firm taken initiative Yes. The firm has introduced lighter-weight to develop new but sturdier kinds of plastics in the products/diversify into new manufacture of its plastic hangers. products/business

solid product quality, stable prices, the ability to enter into long-term contracts with buyers who buy on bulk, and thus differentiate the buying experience from the competition. The goal in the long run is to take over competitors and thus consolidate this firms grip on the domestic industry. A long-term road-map exists. This has been the brain-child of the Chairman of the Board. It has also been translated into annual deliverables, roughly reflective of these objectives. Employees, who have high rate of turnover, are not consultatively privy to this process. The firm is very focused in terms of its management objectives and methods.

opportunities to match market needs or to enter into new markets. Is this done on a continuous basis. Get examples of these initiatives What is the firms policy on pricing its products/services. Are competitors prices kept into account when determining price levels

1 0

Does the firm explore new markets, both domestic and international on a continuous basis. What are its current markets and how did the firm reach this status. Has the firm adopted emarketing or e-business techniques. Does the firm uses internet facilities for sharing its information and expanding market potential

1 1

What marketing strategies are used by the firm to sell its products. Are the 4 Ps of marketing considered. Are these strategies revised from time to time.

This firm operates in a strictly buyer-facing industry. Often the buyers are global brands such as J C Penny, Wal-mart, and the like, who have set up shop in Bangladesh to avail of its cheap female labour. These buyers often buy in bulk at fair to steep discounts compared with small buyers. There is much competition too in the industry, as the barriers to entry---in the form of skills, or proprietary technologies, etc---are not high. As a result, pricing is very much susceptible to competitive threats. Currently, the firm is well-adjusted in its operations in Bangladesh and Nepal. It sells to buying houses and major international brands who have opened offices in Dhaka. It reached its currently pre-eminent status by diligent and pro-active execution of its business plan and models over many years. Because its distribution channels are not so much in the way of mass-mercandizing as of selective high-end selling, it has not turned to e-marketing in a big way. The main point is that this firm is well-adjusted in its selling strategy, with a posse of buyers with very little churn. The need to innovate in terms of marketing strategies is not a dire one. (Of course, it may yet change in future.) It of course has an web site of its own. The marketing strategy of the firm is simple. In this buyer-driven world, it is the customer who defines her requirement. She also signals the kind of price range of her preference. Selling to such buyer means that one has to meet the price and quantity-to-bedelivered targets. Rejects must be the lowest humanly possible. As long as a manufacturer ensure these three fundamentals, the money will follow from the buyer to the seller. The chief marketing strategy is one of gradually accumulating favourable customer referral, and company branding by reference by satisfied customers.

1 2

Is the firm conscious of providing quality products/services and maintaining it. How is this ensured. Has the firm acquired ISO certifications

1 3

Has the firm taken the initiative to replace old plant and machinery/technologies or technological methodologies for improving production. How were new technologies acquired. Were the human resource trained to use new technologies

1 4

1 5

Has the firm adopted any productivity improvement technique to effectively enhance its operations i.e. kaizen, 5 S, total quality management, quality control circles/work improvement teams, balance scorecard, Just in Time, business process reengineering, etc. If yes, how are these implemented and managed How does the firm monitors and manages the cost of its operations/cost of production. Has the firm devised methodologies for reducing cost of operations/production and overhead costs i.e. bulk purchases, maintaining optimal level of inventories, timely shipments/delivery of products, managing utility consumption, human

The firm is very conscious of providing quality goods. This is ensured by having strong design, production and quality-control teams at work, and by keeping them well-motivated. As well, heads of these three teams are given unusually close access to the CEO. Because the chairman of the board and his son---also a Director of the company---have undergone technical training in plastics technology, the twain have surprisingly in-depth command of the design and quality-control situation at this firm. The firm has successfully upgraded its stock of equipment and machinery in an effort to diversify its capability range. The new technologies were acquired in an eclectic manner. The chairman has a keen eye for value. Some of the machinery now used in this company were sourced off Thailand and Indonesia during 1998 soon after the peaking of the East Asian crisis, when debt-ridden corporate sector was having to raise cash by selling assets as steep discounts. Human resources had to be flexibly retrained in the light of such acquisitions. Yes. The main route of improving productivity is about upgrading the technical efficiency of the equipment at work.

The firm is big in terms of buying materials. And its CEO is has a strong buying savvy. Typically, the firm manages discounts on the stuff it buys. Large inventories exist, as bulk-buying leads to shaving of material costs. Keeping a tight lid on costs of production is more about keeping payroll--the focus of all costs---in check. The company keeps wages tightly in check. Because the firms efforts to build a pristine brand for the high quality quality of product has become contagiously successful, it is not bugged the problem of high churn rate (that

1 6

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resource placement, business process, reducing reworks and rejects, improving communication and selling methodologies, etc. Does the firm benefit from economies of scale Is the firm familiar with business control systems such as accounting, record keeping, financial analysis, book keeping, profit center, collections, forecasting, etc. Are these systems used in the management of the business Does the firm have a computer software to manage its business operations. Are HR working on the system been appropriately trained/skilled. Is the firm familiar with ICT development. Has any initiative taken in regard of implementation of ICT. If yes, how have these initiatives helped in the business growth

is the lot of smaller plastics manufactories).

The firm has modern business control systems in place, except systematic forecasting of demand and the like.

1 8

1 9

Company has a geographically distributed applications software to update the orderentry for the production unit which is located fifty miles away from its head-office (where all sales-order are received). The employees working on the systems have been appropriately trained as users. The firms management is savvy with regard to the use of ICTs in routine business operations. Novel steps taken to implement ICTs include (i) creating and harnessing a custom-designed radio link between the corporate headquarters and the factory; (ii) designing and creating an applications software to automate most essential aspects of running both the day-to-day and periodic management of the firm. Does the firm compare its This is not consciously done. performance i.e. business/production growth, sales growth, cost of production, profit growth, return on investment, market share, staff retention, etc with its competitors in the market (industry indicators) Does the firm have a HR Yes, it has. And the HR policy is strictly recruitment policy. Is the followed. recruitment policy followed when hiring employees. Are internal employees given opportunities to fill in job vacancies before

2 0

2 1

2 2 2 3

2 4 2 5

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advertising/fresh hiring Are there explicit job The production workers, security staff, office descriptions for each messengers, etc are not given written job employee contracts. Hence the job descriptions are more informal: employees understand what they have to do. Of course, for some important types of white-collar workers, job contracts are offered in writing, and in that case the job descriptions explicit. Is there a performance There is no formal system of evaluating appraisal system in the firm. performance of anyone on the staff. How often is performance However, for all its informality, the appraised in one year. Is performance level is reasonably high. there an incentive and reward policy based on performance appraisal Is there a promotion policy in There is no formal system. the firm. Is the performance linked to the promotion policy Are the salaries of the Salaries are very much market-based. employees market based. How are the salary packages and incentives compared to other firms in the sector. How are the salary packages and incentives compared within the firm with peer groups Does the firm has policy of Two festival bonuses and one annual profit giving annual bonuses and bonus is de rigeur. other financial incentives to its employees Is human resource Although not egregiously mechanized (in the development considered sense of a very high capital-labour ratio), the important for enhancing production platform in this industry is closer productivity of the firm to being machine-paced than labour-paced. Therefore, HR development is not deemed to be a big priority as far production workers are concerned. However, HR development for design architects in product engineering, marketing and quality-control is viewed with importance. Does the firm have a training Company organizes semester-wise training policy for its employees. program for some employees to upgrade Does the firm allocates skills. The company makes specific allocation annual budget to training of in its annual budget on account of staff employees training. Are internal training Internal training is provided to some programs organized for the employees twice a year (in June and

2 8

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3 0 3 1

employees; if yes, how often in one year. Which level of employees are trained internally Are employees sent on external training programs; if yes, how often. Which level of employees are sent on external training Does the firm focuses on motivational programs for its employees. Does the firm focuses on building staff morale and retaining its employees Is there any employment security offered to employees. Are employees provided employment growth opportunities/career paths within the firm Other initiatives:

December). Staff in production engineering, marketing and quality-control department are a priority in training. Employees trained by external institutes such as Bangladesh University of Engineering and Technology (BUET), Dhaka. Production engineering staff receive priority in such external training. The firm focuses on motivational program such as CEO and Departmental Heads visit the field associates to build rapport and to boost morale of the field forces. Company attaches great significance to staff job security. Employees are offered opportunities for professional self-advancement through the route of external and internal training, onthe-job training. Promotion is always meritocratically determined. The firm has taken the initiative of opening a subsidiary in Nepal based on a joint-venture.

3 2 C 1

Business Development/Support Mechanism (External) Did any government Government legislated a fairly regulation/policies/procedures support generous package of positive the growth of the enterprise. Yes/No, incentives to jump-start please elaborate backward linkage industry to the apparent exports in Bangladesh. And surely that helped. The package includes duty-free imports of needed raw materials, parts, components, a special exchange rate for exporters, a lower-than-commercial interest rate, access to a given percentage of export receipts at the official rate of exchange to be spent on marketing expenses. Has any government intervention in Especially, the export promotion terms of support organizations, councils, facilitation has indeed consultative groups, task forces, advisory envigorated the firms own bodies, incubators, export promotion development efforts for its own facilitation, etc facilitated the growth. development of the firm Has the firm accessed/not accessed Yes. The firm has accessed bank formal financing. How has this facilitated credit. If it werent for the bank

in the business development

4 5 6

7 8

Has the firm benefited from any grant fund Does the firm have access to infrastructural facilities Has the firm benefited from entrepreneurship development programs and other trainings offered by universities and training institutes Has the firm benefited from any technological network, fund or facilitation Does the firm know about the ways of working with bankers, accountants, attorneys, utility providers and tax authorities. How does it handles this

credit, the firm would not be able to timely fund its first episode of growth that took place about three years after its debut. No. Yes. No.

Not really. The Corporate Office of the is headed by a Company Secretary, who is also an US trained MBA from Wharton. Naturally enough, the company has a lot of softskills of the kind required in this paragraph. Not applicable

Others:

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QUESTION Family Background Do you come from a family that owned a business As a child, did you sell anything to earn money Do you have a relative who is in business Are you between the ages of 16 and 45 Are you married or single If you are married, is your spouse supportive of the personal and financial risk involved in the business Were you the first-born child in your family Have you suffered the death/divorce of a spouse or parent Do you belong to a middle class family Do you have a lot of family obligations/liabilities Personal Characteristics Are you inquisitive, creative, innovative and aggressive Do you enjoy solving problems Do you like to make things happen Do you enjoy taking personal and financial risks Do you consider yourself free and independent spirit Do you have high need for achievement

RESPONSE Yes No No Yes Yes No Yes No Yes Yes Yes Yes Yes Yes Yes Yes No No

7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 2 0 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 C 1 2

Do Do Do Do

you you you you

take rejection personally like to move around a lot feel you are more lucky than hardworking use advice of external consultants

Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes Yes Yes No Yes Yes No No No Yes Yes Yes No

Do you believe that you can control your own destiny Are you a consistent goal setter and result-oriented individual Can you make quick decisions Do you have high energy level Do you follow through with implementation when a decision has been made Do you believe in your own power to accomplish goals Do you have high moral and ethical standard Are you dedicated and committed to being in business for yourself Can you inspire and motivate other individuals Do you know how to multiply your talents Have you ever made an assessment of your personality characteristics Do you believe in the power and success of selfdirected learning Do you wake up happy 99% of the times Do you consider yourself ambitious Do you provide a period during each day for thinking, studying, planning or relaxation Do you enjoy power, control and authority Do you consider yourself enthusiastic, imaginative and tenacious Do you know how to protect your ideas from thieves Do you have a personal bank account Business Experience/Knowledge at Commencement Did you have specific experience in the area of business you undertake Did you have personal funds to start up your own business

Yes Yes

3 4 5 6 7 8 9 1 0 1 1 D 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4

Did you have managerial skills when you started your business Were you willing to work longer hours for a minimal amount of money to set up your own business Did you have a college degree or special skills and knowledge from a vocational or technical institute at the start of your business Did you know how to raise money for starting a business or expanding it Did you know how to develop a business plan for presentation to a group of investors/bankers Did you know the four Ps of marketing Did you know how to explore for markets to sell your product Did you know how to determine break-even point. Do you know now Could you read financial statements, project cash flows Business Practices/Knowledge at Present Do you know how to enter into a franchise, JV, technical collaboration, strategic alliances, etc for business growth Are you familiar with current business and tax laws/regulations and policies Do you know how to get free publicity for your products or service Are you familiar with differences and benefits of a proprietorship, partnership and a company Are you aware of the different government and nongovernment programs supporting SMEs in your country Have you benefited from any of these programs Are you aware of different entrepreneurship development training programs offered in the country. Have you benefited from them Are you accessing formal financing Can you read financial statements Do you know what motivates customer behavior and buying habits Do you have experience in organization, planning, budgeting, personnel, marketing, advertising, administration, or evaluation Are you respected by your peers at work and by your friends in other areas of your life Do you constantly explore new technologies, markets and business opportunities Do you strive to learn for better business management practices and cost effective methodologies

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes No No Yes Yes Yes Yes Yes Yes Yes

1 5 1 6 # A 1 2 3 4 5 6 B 1

Do you adopt e-business methodologies in your business Do you believe in employee training, motivation and retention

No Yes

Question Response Basic Background Information of the SME Name of the SME Sawkat Engineering Works Ltd (organization) Name of the Proprietor/CEO Md. Sawkat Hossain Date of Formation 1983 Legal Status Proprietorship Economic Sector Light Engineering (Sub-Contacting) Main Products Jute, Textile, Railway Small Equipment, Agri Small Equipment, Spare parts Business/Operations/HR Strategies (Internal) Does the firm has a corporate Vision: Contribute for the growth of vision and mission statement Small Business Particularly for Light Engineering Sector . Mission: Supply quality of Spare parts at International standard for Light Engineering Industries . . Has the firm chalked out Short Term objective: short term and long term a) Assist Light Engineering Sector for objectives/goals alleviating poverty and generating employment. b) Supply and maintain subcontracting linkages for parent enterprises with the objective for smooth growth of Light Engineering Sector . Long Term objective: a) Participate actively for the growth of SME Sector. b) Modernization and product diversification. c) Improvement of productivity and Practices the mode of culture for cost effectiveness.

Are annual action plans developed in accordance with these objectives? Are the employees opinions and feedback made part in

a) The factory prepare their annual action plan through the process of discussion with participatory approach and in house performance and failure study.

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Question determining annual objectives and targets? Does the firm practices the concept of management by objectives/corporate entrepreneurship? Is emphasis placed on individual responsibility and reward based on results Does the management organizes its human resource in venture teams to deliver the objectives

Response

The enterprise maintain certification and reward system base on their own system. The management by himself capable for providing technical training at the shop floor level. Besides, management regularly sent their personnel including workers for enjoying training to the concern training institutes like NPO, SCITI (Small and Cottage Industries Training Institute) and Other Vocational Training Institutes. The enterprise never follows the hierarchy system of management. The Enterprise think that participatory approach always better than single leadership.

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What is the organizational structure of the firm. Is it a flat hierarchy? How is work managed amongst different departments/units. Is there coordination amongst different departments and process of operations? How is this managed? Does the firm believe in innovation and creation of new ideas for products and services? How is this managed? Has the firm taken initiative to develop new products/diversify into new products/business opportunities to match market needs or to enter into new markets. Is this done on a continuous basis. Get examples of these initiatives What is the firms policy on pricing its products/services. Are competitors prices kept into account when determining price levels Does the firm explore new markets, both domestic and

The enteprise maintains innovative system like KAIZEN system for designing and processing of outputs as per demand from their parent enterprises. The enteprise always takes initiative for producing outputs as per market demand.

The enterprise determine their pricing policy on output sales and purchase of inputs based on market study and position of competitors. The enterprise has incorporated ICT based facility for their accounting

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Question international on a continuous basis. What are its current markets and how did the firm reach this status. Has the firm adopted e-marketing or ebusiness techniques. Does the firm uses internet facilities for sharing its information and expanding market potential What marketing strategies are used by the firm to sell its products. Are the 4 Ps of marketing considered. Are these strategies revised from time to time. Is the firm conscious of providing quality products/services and maintaining it. How is this ensured. Has the firm acquired ISO certifications Has the firm taken the initiative to replace old plant and machinery/technologies or technological methodologies for improving production. How were new technologies acquired. Were the human resource trained to use new technologies Has the firm adopted any productivity improvement technique to effectively enhance its operations i.e. kaizen, 5 S, total quality management, quality control circles/work improvement teams, balance scorecard, Just in Time, business process reengineering, etc. If yes, how are these implemented and managed How does the firm monitors and manages the cost of its operations/cost of production. Has the firm devised methodologies for reducing cost of operations/production

Response process and billing system.

The enterprise follows strategies of all 4Ps in their marketing policy.

Yes, the enterprise objective: Quality come first and profit may be a logical sequence.

The enterprise has partially replaced their small units of machine/ technology among some selective production line.

The enterprise use the system and practices 5S, TQM, quality control system in their operation. Some management officials have enjoyed special training on 5S, TQM and Waste management and accordingly the management use the practices of the defined tools in their factory.

They management have strong record keeping system for monitoring every aspect of cost both of output and inputs.

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Question and overhead costs i.e. bulk purchases, maintaining optimal level of inventories, timely shipments/delivery of products, managing utility consumption, human resource placement, business process, reducing reworks and rejects, improving communication and selling methodologies, etc. Does the firm benefit from economies of scale Is the firm familiar with business control systems such as accounting, record keeping, financial analysis, book keeping, profit center, collections, forecasting, etc. Are these systems used in the management of the business Does the firm have a computer software to manage its business operations. Are HR working on the system been appropriately trained/skilled. Is the firm familiar with ICT development. Has any initiative taken in regard of implementation of ICT. If yes, how have these initiatives helped in the business growth Does the firm compare its performance i.e. business/production growth, sales growth, cost of production, profit growth, return on investment, market share, staff retention, etc with its competitors in the market (industry indicators) Does the firm have a HR recruitment policy. Is the recruitment policy followed when hiring employees. Are internal employees given opportunities to fill in job vacancies before

Response

Yes.

Yes, the enterprise uses computer system for their record keeping, billing and other business operation.

Yes, the enterprise compares its all performance with other competitor through market based information system. Sometimes the enterprise has

The enterprise has proper recruitment policy by which they use to develop high quality HRD and skill people in different job elements.

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2 2 2 3

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Question advertising/fresh hiring Are there explicit job descriptions for each employee Is there a performance appraisal system in the firm. How often is performance appraised in one year. Is there an incentive and reward policy based on performance appraisal Is there a promotion policy in the firm. Is the performance linked to the promotion policy Are the salaries of the employees market based. How are the salary packages and incentives compared to other firms in the sector. How are the salary packages and incentives compared within the firm with peer groups Does the firm has policy of giving annual bonuses and other financial incentives to its employees Is human resource development considered important for enhancing productivity of the firm Does the firm have a training policy for its employees. Does the firm allocates annual budget to training of employees Are internal training programs organized for the employees; if yes, how often in one year. Which level of employees are trained internally Are employees sent on external training programs; if yes, how often. Which level of employees are sent on external training Does the firm focuses on motivational programs for its employees. Does the firm focuses on building staff

Response Yes, there are explicit job assignment for each worker / employee. The Enterprise follow the performance appraisal system entitled with Performance Linked Payroll System.

The enterprise has specific promotion policy. Yes, the enterprise maintains market based salary system. The Enterprise provides festival bonus and one time annual performance bonus.

Yes, the Enterprise provides festival bonus and one time annual performance bonus. Yes, HRD is the motto for productivity promotion. The enterprise has no separate training policy.

Yes, the enterprise provide on-the-job training for their employees / workers.

Yes.

Yes, the enterprise has very close employee motivation program. The management build team building work culture at every level in the enterprise.

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Question morale and retaining its employees Is there any employment security offered to employees. Are employees provided employment growth opportunities/career paths within the firm Other initiatives:

Response Job security designated as performance for the employees. Yes, the enterprise management build the behavior at shop floor that theri working place will accommodate them for career building. Yes, HRD, Quality and environment friendly system.

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Business Development/Support Mechanism (External) Did any government Yes. regulation/policies/procedures support the growth of the enterprise. Yes/No, please elaborate Has any government Yes, the enterprise has made intervention in terms of intervention with BSCIC (Bangladesh support organizations, Small & Cottage Industries Corporation) councils, consultative groups, and NASCIB (National Association for task forces, advisory bodies, Small & Cottage Industries of incubators, export promotion Bangladesh). facilitation, etc facilitated the development of the firm Has the firm accessed/not Yes, the enterprise has got privilege for accessed formal financing. formal financing from financial How has this facilitated in the institution, but the scope is limited. business development Has the firm benefited from No any grant fund Does the firm have access to No infrastructural facilities Has the firm benefited from The enterprise has enjoyed an entrepreneurship Entrepreneurship Development Training development programs and from Small and Cottage Industries other trainings offered by Training Institute (SCITI) and National universities and training Productivity Organization (NPO). institutes Has the firm benefited from No any technological network, fund or facilitation Does the firm know about the The authority of enterprise has sufficient ways of working with bankers, knowledge based capability for accountants, attorneys, utility communicating with the authority of providers and tax authorities. bank and financial institution. How does it handles this Others: The enterprise has potential scope to

Question

Response work with other sector like providing inputs for Jute, Textile, Leather, Railway, Transportation and Agriculture, etc.

# A 1 2 3 4 5 6 7 8 9 1 0 B 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 1 7

QUESTION Family Background Do you come from a family that owned a business As a child, did you sell anything to earn money Do you have a relative who is in business Are you between the ages of 16 and 45 Are you married or single If you are married, is your spouse supportive of the personal and financial risk involved in the business Were you the first-born child in your family Have you suffered the death/divorce of a spouse or parent Do you belong to a middle class family Do you have a lot of family obligations/liabilities Personal Characteristics Are you inquisitive, creative, innovative and aggressive Do you enjoy solving problems Do you like to make things happen Do you enjoy taking personal and financial risks Do you consider yourself free and independent spirit Do you have high need for achievement Do you take rejection personally Do you like to move around a lot Do you feel you are more lucky than hardworking Do you use advice of external consultants Do you believe that you can control your own destiny Are you a consistent goal setter and result-oriented individual Can you make quick decisions Do you have high energy level Do you follow through with implementation when a decision has been made Do you believe in your own power to accomplish goals Do you have high moral and ethical standard

RESPONSE Yes Yes Yes Yes Yes No Yes No Yes No Yes Yes Yes Yes Yes Yes No Yes No Yes Yes Yes Yes Yes Yes Yes Yes

1 8 1 9 2 0 2 1 2 2 2 3 2 4 2 5 2 6 2 7 2 8 2 9 C 1 2 3 4 5 6 7 8 9 1 0 1 1 D

Are you dedicated and committed to being in business for yourself Can you inspire and motivate other individuals Do you know how to multiply your talents Have you ever made an assessment of your personality characteristics Do you believe in the power and success of selfdirected learning Do you wake up happy 99% of the times Do you consider yourself ambitious Do you provide a period during each day for thinking, studying, planning or relaxation Do you enjoy power, control and authority Do you consider yourself enthusiastic, imaginative and tenacious Do you know how to protect your ideas from thieves Do you have a personal bank account Business Experience/Knowledge at Commencement Did you have specific experience in the area of business you undertake Did you have personal funds to start up your own business Did you have managerial skills when you started your business Were you willing to work longer hours for a minimal amount of money to set up your own business Did you have a college degree or special skills and knowledge from a vocational or technical institute at the start of your business Did you know how to raise money for starting a business or expanding it Did you know how to develop a business plan for presentation to a group of investors/bankers Did you know the four Ps of marketing Did you know how to explore for markets to sell your product Did you know how to determine break-even point. Do you know now Could you read financial statements, project cash flows Business Practices/Knowledge at Present

Yes

Yes No Yes No Yes Yes Yes Yes Yes Yes

Yes Yes No Yes Yes Yes Yes Yes Yes Yes Yes

1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6

Do you know how to enter into a franchise, JV, technical collaboration, strategic alliances, etc for business growth Are you familiar with current business and tax laws/regulations and policies Do you know how to get free publicity for your products or service Are you familiar with differences and benefits of a proprietorship, partnership and a company Are you aware of the different government and nongovernment programs supporting SMEs in your country Have you benefited from any of these programs Are you aware of different entrepreneurship development training programs offered in the country. Have you benefited from them Are you accessing formal financing Can you read financial statements Do you know what motivates customer behavior and buying habits Do you have experience in organization, planning, budgeting, personnel, marketing, advertising, administration, or evaluation Are you respected by your peers at work and by your friends in other areas of your life Do you constantly explore new technologies, markets and business opportunities Do you strive to learn for better business management practices and cost effective methodologies Do you adopt e-business methodologies in your business Do you believe in employee training, motivation and retention

No Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes