FIELD Projects: Direction 2

There are a number of sub-markets within the microenterprise market that require different products and services. Developing and offering new products to meet these needs can lead to increased scale, as new clients are attracted, and existing clients are able to find products and services that meet their changing needs. A differentiated product line also can lead to greater efficiencies, as staff resources are invested in offering tailored products that customers demand, rather than one-size-fits-all offerings. At the same time, as organizations add new products they must be able to deliver them in a cost-effective and sustainable manner.

Moving toward a more differentiated line of products and services requires, first, that programs invest in developing better market knowledge. For information on market research for microenterprise programs, see the “Market, Market, Market” page of this Moving Forward section. Second, programs need to develop processes for assessing, early on, the specific needs of each client. Third, programs need to develop products and services tailored to client demands. The following resources provide information to microenterprise practitioners interested in (1) developing new mechanisms for client assessment, and (2) implementing product development processes that yield new products that both meet client needs, and are financially cost-effective and sustainable for their organization. It also provides information on tools and strategies that the microenterprise field already has developed for specific sub-markets of microentrepreneurs.

Client Assessment Resources

Client Assessment and Screening for Microenterprise Training Programs. This excerpt from FIELD Best Practice Guide: Volume 1, Entering the Relationship: Finding and Assessing Microenterprise Training Clients covers the basic issues involved in assessing clients interested in enrolling in microenterprise training. The publication touches briefly on the following:

The issues involved in engaging in assessment and screening,
The factors covered in assessment and screening,
The processes used to assess and screen clients,
Best practices lessons regarding client assessment and screening.

Entrepreneurial Training Institute, Self-Assessment Tool. The New Jersey Economic Development Agency’s Entrepreneurial Training Institute (ETI) has developed a simple self-assessment tool entrepreneurs can complete on-line to help them evaluate their readiness to start or expand a small business, and to explore their fit with the services provided by ETI. The Excel-based tool explores readiness along three dimensions: the business idea, financial and personal. Results are automatically calculated, and a guide to interpreting the results is included, along with space to develop an entrepreneurial action plan. For individuals that decide to enroll in ETI’s “Get Set for Entrepreneurship” class, the completed self-assessment tool is required for the first night of class. (Fall 2005, 4 pages, developed by the New Jersey Economic Development Agency’s Entrepreneurial Training Institute and Susan Schaper of Novia, Inc.)

Resources on the Product Development Process

New Product Development for Microfinance, Innovations in Microfinance Technical Note #1. This 11-page technical note from U.S. AID’s Microenterprise Best Practices program presents an overview of a new product development process used by microfinance institutions (MFIs) to expand their reach into rural areas. While the note was designed for programs seeking to expand outreach into West Africa, it is based on lessons from MFIs around the world, and provides a brief but very strong overview of the product development process, including:

How products must align with the needs of the financial market,
When programs should explore new products,
The four distinct phases in new product development,
Ten lessons for successful product development.

Looking Before You Leap: Key Questions That Should Precede Starting New Product Development. This brief article for the Journal of Microfinance is based on the premise that successful microfinance institutions will ultimately be those that are “market-driven.” A key part of this process is developing client-responsive products. This paper outlines some of the basic questions and issues that MFIs should address prior to embarking on the product development process, and argues that effectively conducted, systematic product development will result in products that are popular with clients and more cost effective for MFIs. (Spring 2002, Volume 4, Number 1; 15 pages, authored by Graham A.N. Wright, Monica Brand, Zan Northrip, Monique Cohen, Michael McCord and Brigit Helms.)
New Product Development for Microfinance: Evaluation and Preparation. This technical note, much more detailed than the two above, focuses on the institutional and market analysis that organizations should undertake when deciding whether to expand their product line. Specifically, it covers how to:

Understand the competitive landscape,
Define product lines and how they are evaluated,
Identify the steps in a conventional product development process,
Recognize the signals for new product development,
Evaluate the financial, institutional and methodological implications of a new product,
Determine whether it is a suitable time for the MFI to move forward,
Create an organizational culture that supports product innovation.

New Product Development for Microfinance: Design, Testing and Launch

New Product Development for Microfinance: Design, Testing and Launch. This publication, which follows up on the one above, picks up after an MFI has evaluated the feasibility of introducing a new product and is ready to proceed with the development process, including design, testing and product launch. Specifically, this document illustrates how MFIs:

Gather the institutional resources and commitment necessary to successfully design, test and launch the product;
Undertake preliminary market research to segment the market and solicit focused feedback from target customers;
Design a product prototype, to be used in the pilot test;
Conduct a pilot test to refine the prototype and determine if launching the new product makes sense;
Develop a marketing strategy and internal systems to successfully launch the new product and manage its on-going refinement;
Understand the factors contributing to successful product development.

Resources on Products and Services for Specific Sub-Markets

The following section provides resources for the following types of specialized training, technical assistance, and financing products: programs for refugees, individuals with disabilities, and TANF recipients; products targeted to growth-oriented firms, child care businesses, food, craft and tourism enterprises, and construction firms; and specialized loan and financing-related products such as peer loans, Individual Development Accounts, financial education and tax preparation.

Refugees

Refugee Microenterprise Development: Achievements and Lessons Learned. This paper summarizes the lessons from 11 years of experience with refugee microenterprise initiatives funded by the Office of Refugee Resettlement of the U.S. Department of Health and Human Services. It provides an overview of the achievements and lessons learned by 34 organizations in 24 states, and includes the following topics:

The types of agencies that operated refugee microenterprise programs,
Achievements of the programs,
Eleven lessons learned.

Individuals with Disabilities

Microenterprise Services for Entrepreneurs with Disabilities: A Market of Millions. This training manual from the Association for Enterprise Opportunity (AEO) is designed to give microenterprise organizations an introduction to the potential of extending services to entrepreneurs with disabilities. It covers issues such as the language of disability, understanding the vocational rehabilitation system, best practices for offering microenterprise services to vocational rehabilitation clients, and understanding the benefit system. (2004, 43 pages, authored by Patti Lind and Mark Nolte, The Abilities Fund.). The manual can be ordered from the AEO Bookstore.
The Abilities Fund. The Abilities Fund is a non-profit organization dedicated to advancing entrepreneurial opportunities for Americans with disabilities. The Abilities Fund offers on-site training to help microenterprise organizations and Statewide Microenterprise Associations (SMAs) provide effective, responsible services to entrepreneurs with disabilities. Additionally, the Abilities Fund provides information on its Web site that can help programs reach and provide services to microentrepreneurs with disabilities. Topics covered include:

Disability 101: Getting comfortable with the language of disability.
Is my organization accessible?
How can I properly market to individuals with disabilities?
What do I need to know about Social Security benefits and self employment?
How do we provide services to state rehabilitation programs?

TANF Recipients

Findings from the Microenterprise Welfare to Work Demonstration. This series of brief reports from FIELD describe various components of microenterprise programs targeted to TANF recipients, based on the experiences of the 10 grantee organizations that received funding from the Charles Stewart Mott Foundation.

Growth-Oriented Firms

Bridges to Success: Promising Strategies for Microenterprise Growth in the United States. This broad literature review amalgamates documentation available on business growth from an array of fields – microenterprise development, entrepreneurship education, business incubation and business management. The review is divided into four sections:
- Business growth definition,

Factors influencing business growth,
Best practice services for increasing U.S. microenterprise business growth,
Key issues and further research.

Connectors and Conduits: Reaching Competitive Markets from the Ground Up. This publication from FIELD presents findings from the multi-year Access to Markets demonstration project, which explored innovative ways for microenterprise programs to help entrepreneurs place their products in more lucrative markets. The authors look across programs and highlight the innovations adopted, the implementation challenges that emerged, and the lessons learned. (July 2002, 45 pages, authored by Karen Doyle Grossman with Amy Kays Blair and Tamra Thetford.)
Models for Advanced Technical Assistance, Client Retention, and Business Growth. This 55-page PowerPoint provides an in-depth overview of the challenges of providing individual business consulting, describes key issues in program design, and explores emerging models for best practices in business consulting, including:

Evaluating client progress and skill-development,
Structured performance based consulting,
Leveraging business professionals in the community,
Staff specialization,
On-line training and TA,
Creating a membership program.

Microenterprise as a Re-entry Strategy

Venturing Beyond the Gates: Facilitating Successful Reentry with Entrepreneurship. This monograph from the Prisoner Reentry Institute presents the results from a year-long research project that examined the viability of entrepreneurship as an employment strategy for reentry. The monograph includes background information and statistics on reentry and entrepreneurship, describes opportunities to facilitate reentry with entrepreneurship, describes the experiences of microenterprise programs in the U.S., U.K., Canada and Mexico that have worked to serve this population, and provides cases studies of formerly incarcerated entrepreneurs. The publication also suggests strategies for funding these efforts, and contact information for a variety of resources. (Summer 2007, 95 pages, authored by Nicole Lindahl with assistance from Debbie A. Mukamal, Prisoner Reentry Institute at John Jay College of Criminal Justice.)

Child Care Businesses

The Child Care Microenterprise Toolkit is a new resource from the Child Care Bureau, Administration for Children and Families, U.S. Department of Health and Human Services. According to the kit’s introduction, it is aimed at helping “child care providers to start or improve their businesses and economic self-sufficiency; helping programs improve their services, training, and assistance to child care providers; and improving the quality and supply of child care in communities.” The toolkit currently includes three tip sheets for child care providers and aspiring or existing business owners about small business and asset-building opportunities. It also has two tip sheets for programs providing technical assistance to child care providers. A Child Care Microenterprise Program Directory is an additional resource for both providers and programs, and provides information on 85 organizations in 36 states, the District of Columbia, and Puerto Rico that have experience serving child care providers and business owners and/or have established specific programs for this group. (2006, U.S. Department of Health and Human Services.)
First Step Fund. The First Step Fund, a training-led microenterprise program in Kansas, has created the Developing Your Family Child Care BusinessT Curriculum to train individuals to open home-based child-care businesses. The eight module course is facilitator-led and interactive. Completion of the curriculum results in a business plan and parent handbook. The curriculum is available for sale to nonprofits certified by the First Step Fund. For information regarding the curriculum and the process for becoming a First Step Fund Child Care site, visit the First Step Fund Web site.
Good Work. Good Work is a training provider in North Carolina committed to fostering entrepreneurship and supporting self-employment. Good Work has developed targeted curricula (in both English and Spanish) for child-care enterprises. The curricula are licensed on a sliding scale to other nonprofits. Good Work also offers a train-the-trainer program with the curricula, and ongoing follow-up and assistance are available for an additional fee. Please contact John Parker (919-796-2730, johnp@goodwork.org) for additional information.

Food, Craft and Tourism Businesses

Food Ventures is a project of ACEnet, the Appalachian Center for Economic Networks, which works with community partners to open opportunities for new specialty food jobs and businesses in southeastern Ohio. As a national leader in supporting local specialty foods ventures, ACENet’s Web site provides a wide range of resources, including a curriculum that provides a detailed set of on-line worksheets and resources for specialty food businesses, publications and presentations, and a national listserv for those working in the specialty foods industry.
Innovations in Microenterprise Development: From the Rural Experience. A culmination of the Rural Microenterprise Successful Practices Project, AEO created a booklet that “outlines the successful practices identified by the Learning Cluster participants.” Learning Clusters were held around the food sector, tourism and connecting artisans to markets. Copies are available through AEO: aeo@assoceo.org. (April 2003, 55 pages, authored by Natallie Keiser and Jennifer Hird, Association for Enterprise Opportunity.)

Construction Businesses

Good Work. Good Work is a training provider in North Carolina committed to fostering entrepreneurship and supporting self-employment. In addition to a six-week introductory, “Building Your Business™” class, Good Work has developed a curriculum, available in both English and Spanish, for businesses in the construction trades. The curriculum is licensed on a sliding scale to other nonprofits. Good Work also offers a train-the-trainer program with the curriculum, and ongoing follow-up and assistance are available for an additional fee. Contact John Parker (919-796-2730, johnp@goodwork.org) for additional information.

Peer Lending Products

Peer Plus: The Evolution and Success of Peer Lending in the United States. This training module from AEO describes how today’s peer lending, rather than being a stand-alone product or model, typically serves as one product or function within a range of microenterprise products and services – hence the term “peer plus.” The manual describes the evolution of peer lending in the U.S., and describes strategies and practices for effective peer lending. (2003, 28 pages, Melissa Scudo.) Available through the AEO Bookstore.
Observations about Peer Group Lending in the U.S.: Strengths and Weaknesses. This page on FIELD’s Web site provides a summary of key lessons from FIELD’s data collection and evaluation work on peer lending programs. While these lessons are drawn from program experiences in the 1990s, they do represent the field’s experience with peer lending. Many of the lessons and steps identified in AEO’s Peer Plus manual (see listing above) represent programmatic responses to the lessons noted here.

Individual Development Accounts

www.idanetwork.org. This on-line resource from CFED provides a wide range of information on Individual Development Accounts. The Web site includes a resource library that includes a section on IDA program design, as well as information on asset training, financial education, funding and asset policy.
The Savings and Credit Toolkit. This resource from CFED describes the critical steps involved in integrating microenterprise and IDA programs. It outlines a systematic product development process that can assist programs in determining appropriate goals for integration, and developing the steps required to implement those goals. The kit also provides sample designs and tools developed by five organizations that took part in its “Integrating Savings and Credit Initiative.” Components of the toolkit cover: determining goals and organizational capacity, knowing your target market, product design, pilot testing, product launch, training, and evaluating your program. (2005, CFED)
Savings and Credit for Microentrepreneurs. This bulletin, which is Volume 4, Number 1 in CFED’s Effective Policy and Practice Guide series, explores how Individual Development Accounts (IDAs) and microenterprise development (MED) products and services can be integrated to enhance asset accumulation among low-income entrepreneurs. (Undated, 6 pages, CFED.)
Integrating Savings into Microenterprise Programs for the Poor: Do Institutions Matter? This paper uses data from microenterprise programs that support savings through IDAs to examine which institutional characteristics – match rates, flexibility in program rules, hours of financial literacy training, etc. – have an affect on the savings rate of program participants. Although this is a fairly technical research report, the findings on pages 20 and 21 will be useful for those designing IDA programs for entrepreneurs. (2004, 27 pages, Fred M. Ssewamala and Michael Sherraden.)

Financial Education

Financial Planning for Your Microenterprise. This publication, developed jointly by the Association for Enterprise Opportunity and the National Endowment for Financial Education, is aimed at entrepreneurs who want to develop and strengthen their personal and business financial management skills. Topics include: personal budgeting, the use and misuse of debt, building financial assets, and cash flow and break-even analysis. (2003, 76 pages, National Endowment for Financial Education.)
www.idanetwork.org. CFED’s IDA network includes a section on financial education as part of its resources on IDA program design.
The Financial Education Clearinghouse. The clearinghouse, developed jointly by American Express and the National Endowment for Financial Education, provides resources in support of community-level financial literacy programs. This on-line resource includes a list of financial education materials, including one section on resources for entrepreneurs.
Building Blocks for Financial Success. This interactive, distance- learning curriculum provides financial training and counseling on-line. Developed by the Women’s Opportunities Resources Center, a microenterprise organization in Philadelphia, the course allows participants to enroll, set goals, and take basic financial courses on-line. Provider agency and individual learner fees apply.

Tax Preparation Assistance

Self-Employment Tax Initiative (SETI). This initiative by CFED and its subsidiary, the National Fund for Enterprise Development (NFED) is supporting the exploration and development of a tax code delivery system for providing services to microentrepreneurs. The initiative includes research, policy development, and funding for nonprofits interested in offering tax preparation services for microenterprise start-ups. For more information, as well as tools that practitioners and tax preparers can use to assist microentrepreneurs in filing their taxes, visit the SETI Web site.
EITC and Microentrepreneurs: One Program’s Experience. This issue of the FIELD forum takes an in-depth look at how West Company, a California-based Microenterprise program, has helped microentrepreneurs document their participation in the economy and access potentially thousands of dollars in tax refunds through the Earned Income Tax Credit (EITC). The publication points out that microenterprise programs are uniquely positioned to fill a critical need for affordable or even free tax preparation assistance among certain entrepreneurs, given that they have expertise in serving small, start-up and side businesses and have staffs skilled in providing outreach, training and technical assistance to the working poor. Although replicating West Company’s tax and EITC service may not be right – or easy – for other programs, the publication suggests it is a service worth exploring. (September 2005, 12 pages, authored by Karen Doyle Grossman, The Aspen Institute/FIELD.)

Have additional resources to suggest? Email us at fieldus@aspeninstitute.org.