June 2, 2016 Event Recap, The Missing Middle by Rahel Boon Dejene
The evening of 2nd June was indeed an opportune moment for members and guests to network and discuss the topic at hand while waiting for the evening’s speaker to start her presentation. Talking to a few randomly selected attendees, they attended the event because they wanted to know about this new concept – The Missing Middle. Others came simply because it was AWiB’s monthly event and they were sure it was going to be a great evening while still others expressed that the event announcement caught their eyes and piqued their interest in the topic. Quite a few admitted that they wanted to know about challenges of starting/ owning and running a business which would fall under the category.
After a few welcoming remarks and announcements by the evening’s host , AWiB’s own, – Tsedey Hailu -, Rahel Boon Dejene took the stage to brief us on the topic. Sharing some statistics on the potential of Small and Medium Enterprises (SMEs), Rahel stated that they were indeed a major source of economic development in terms of contribution to the GDP of a country and creating employment opportunities for its citizens. She then asked why the audience decided to attend the event. Reflecting the same themes which were discussed the networking session, a few said they wanted to learn about the concept but most agreed that even though they don’t own a business right now, they wanted to start a business in the future but it was a scary prospect for them. The session was hoped to be a learning opportunity. Therefore, Rahel’s formal introduction started by defining what and who the Missing Middle is. In her presentation, she also shared the role of women in the Missing Middle, challenges and opportunities of SMEs as well as solutions.
After providing some background as to where she lives now – the Netherlands – and where her business is established /run – in Ethiopia-Rahel intimated that she always starts her introduction by saying she is a woman entrepreneur who has to explain that she is a migrant and a mother before delving into the subject of the business that she runs. She also explained how she started her business out of necessity – not finding paid employment upon graduation. When she started the company, she also wanted to use the business knowledge she had to solve social issues. Enter – RBD consultancy which created job opportunities for IT graduates who have the theoretical background but little to none work experience in the field. That’s when Rahel came across the Missing Middle Aspect – SMEs – organizations which are not adequately served by neither by policy makers nor banks who prefer to work with large multinationals and government backed institutions or micro financing institutions which cater for the micro level of business.
If given proper policy support and access to finance, however, SMEs are the ones reporting higher productivity and efficiency with well thought out business plans. They also contribute a great deal to the GDP of a country, creation of job opportunities and becoming self sustaining motors of the country’s economy. The presentation continued by stating that GTP I was predominantly about micro level organizations that are now assumed to “graduate” into SME’s. GTP II , on the other hand , focuses on SMEs specifically in the manufacturing, renewable energy, agro processing, gold , oil and gas and gemstones sectors. This focus is not only about availability of financing but also about registration and set up of businesses, basic infrastructure , tax holidays for manufacturing sector and creation of linkage with industrial zones .
Concerning women’s role in SMEs, it was mentioned that only 26% of the SMEs were women led and these SMEs suffer from lack of information, time and network. Additional challenges discussed included lack of access to finance, low ability to acquire skills and managerial expertise, underdeveloped business development services, poor infrastructure and lack of appropriate technology, high bureaucratic red tape.
Rahel concluded her presentation by sharing her 10 golden rules for being a successful entrepreneur.
- Re-question your passion and vision.
- Find a role model and source of drive
- Seek for continues what if moments
- Use your network resource effectively
- Look beyond the challenges
- Share your knowledge
- Be prepared to fail
- Seek partnership
- Never give up
- Ask for help -use your networks, leverage.
Then, the floor opened for questions, reflections and comments. A summary is presented here.
On Access to Capital – there are many challenges for a start up even if the entrepreneur knows how to structure a profitable business and prepare an excellent business idea. Even though feasibility of the business idea is assured, raising the required capital may entail request for collateral from banks or unfair request for equity by those who have the funds. It is, therefore, important to consider various alternatives and approaches to raise capital while maintaining one’s integrity. Since there are also many strict regulations that are restrictive for foreign funding, it is up to the entrepreneur to be creative by taking calculated risks, convincing potential investors and forming partnership with limited time frames, creative contract terms with options for re-negotiation in the future.
On the importance of leveraging networks – People are willing to help, as long as they are asked specifically what support is required by the budding entrepreneur.
Importance of never giving up – managing expectations in terms of facing lack of accurate, adequate and timely information despite an entire office for the same purpose is dedicated at the various government offices.
On prevailing corruption – being steadfast and asking for the right thing using the only way which is ethical will pay off in the long run even though it may inflict short term frustration. That’s the only way to fight corruption.
On the importance of Role modeling, training and skills development – role modeling is more impactful to youth as it will give them much needed confidence in terms of developing and leveraging their network. There are also opportunities of working on group coaching to less privileged women .It is also important to note that graduates from universities and colleges may not be ready to join the workforce without any training. In fact, it is essential for SMEs to continuously develop their employees as well as themselves in order to thrive as a sustainable business.
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