Handbook On The SME Business Training and Coaching Loop. Working Version, July 2016

Handbook on the “SME Business
Training and Coaching Loop“

Working Version, July 2016
Published by:
Deutsche Gesellschaft für
Internationale Zusammenarbeit (GIZ) GmbH
Registered offices
Bonn und Eschborn
Global Programme “Green Innovation Centers for the Agriculture and Food Sector”
Competence Center Private Sector Development
Friedrich-Ebert-Allee 36
53113 Bonn
T +49 228 44 60-0
F +49 228 44 60-17
E info@giz.de
I www.giz.de
Authors:
Ralf Barthelmes, Ralf Arning, Anna Wanetschek in collaboration with
Alphonso S.O. Campbell, Samson Moura Kougbadi and Aloupea Nossa Ahoussa
Layout:
Nadescha Beckmann
Photo credits:
Green Innovation Centers for the Agriculture and Food Sector in Benin
Youth Employment promotion through agricultural development, Sierra Leone
URL link:
Responsibility for the content of external websites and exercises linked in this publication
always lies with their respective publishers. GIZ expressly dissociates itself from
such content.
GIZ is responsible for the content of this publication.

Bonn, July 2016
Content
List of Abbreviations and Acronyms .............................................................................................. 1
1 Introduction .......................................................................................................................... 2
1.1 History of the SME Loop .......................................................................................................... 2
1.2 About this handbook ............................................................................................................... 3
1.3 How to use this handbook....................................................................................................... 3
2 The SME Loop Approach ........................................................................................................ 5
3 Define your SME Loop ........................................................................................................... 7
3.1 Setting the boundaries ............................................................................................................ 7
3.2 Define the objective and target group .................................................................................... 7
3.3 Cooperation with service providers and other partners ......................................................... 9
3.4 Human Resources required!.................................................................................................... 9
3.5 Costs to consider ................................................................................................................... 11
4 Let’s get started .................................................................................................................. 12
4.1 Cooperation with partners .................................................................................................... 12
4.2 Selection of service providers ............................................................................................... 12
4.3 Selection of trainers and coaches ......................................................................................... 13
4.4 Capacity development for service provider, trainers and coaches ....................................... 14
4.5 Get in contact with financial institutions .............................................................................. 16
4.6 Identification and pre-selection of entrepreneurs................................................................ 17
4.7 Time planning for setting up your SME Loop ........................................................................ 18
5 SME Loop Implementation step by step ............................................................................... 18
5.1 Assessment and selection of entrepreneurs ......................................................................... 19
5.2 The trainings – Structure and methodology ......................................................................... 20
5.3 The coaching – Structure and methodology ......................................................................... 23
5.3.1 Coaching principles ...................................................................................................... 23
5.3.2 Roles and Responsibilities ........................................................................................... 24
5.4 The Training contents ............................................................................................................ 28
5.4.1 Modules of the first training ........................................................................................ 29
5.4.2 Modules of the second, modularized training ............................................................ 35
5.5 Graduation ceremony ........................................................................................................... 42
6 Measure, learn and share .................................................................................................... 43
6.1 Measure................................................................................................................................. 43
6.1.1 Loop monitoring as integral part of the programme monitoring system ................... 44
6.2 Learn ...................................................................................................................................... 45
6.3 Share ...................................................................................................................................... 45
Appendix ................................................................................................................................... 47
List of Abbreviations and Acronyms
CEFE Competency Based Economies Formation of Enterprise
EMPRETEC Spanish acronym for emprendedores (entrepreneurs) y tecnologia (technology),

integrated capacity-building programme of UNCTAD that promotes the creation of
sustainable support structures that help promising entrepreneurs build innovative
and internationally competitive small and medium sized enterprises
EPP Employment Promotion Programme (GIZ)
GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH
ICT Information and communications technology
ILO International Labour Office
M&E Monitoring and Evaluation
MoU Memorandum of Understanding
MSME Micro, small and medium enterprises
SIYB Start and improve your business
SME Small and medium sized enterprises
UNCTAD United Nations Conference on Trade and Development
1
1 Introduction
1 Introduction
Small and medium sized enterprises (SMEs) play a crucial role in the economic and social
development of many countries. SMEs are involved to a significant degree in economic and technical
innovations; they provide a large share of jobs, pay a high share of taxes and contribute to social
stability, economic dynamism and national economic growth.
Yet again, SMEs are often unable to fulfil their role in society and the national economy adequately.
Unfavourable business environments impede business start-ups, investment and growth.
Entrepreneurial skills are often lacking, and promotional measures run by the state or by chambers
and associations frequently take insufficient account of the divers business community needs.
Various approaches for training entrepreneurs are existent; so why do we need yet another tool? We
are convinced that the SME Business Training and Coaching Loop (hereinafter called “SME Loop”)is
unique because it offers a combination of assets that lead to fast visible results for the benefit of the
entrepreneur, its employees and the society the enterprise is acting in:
 Individual assessment of the enterprise and the entrepreneur to specifically refine the content
to the needs and potentials of the enterprises
 Systemized alternation between training, coaching and peer-to-peer learning to bring the
entrepreneurs into active utilization of knowledge and experience
 Individual business coaching as the centrepiece of the Loop to integrate training contents into
daily business life. It leads to a higher uptake of the lessons learned and allows for the
entrepreneurs to work – supported by the coach – on personal challenges and the individual
entrepreneurial development path.
 Financial literacy and access to finance closely incorporated into the entire Loop
 A set of exercises and templates to flexibly adapt the SME Loop to the context and realities in
each country. It allows for a strong adaptation of the content to the needs of each participant,
creating high motivation and involvement.
We invite you to experience “the SME Loop” and to make it your tool for SME development.
1.1 History of the SME Loop

The SME Loop was developed in 2014 in Sierra Leone after thoughtful reflections by two GIZ
advisors1 of the GIZ-supported programme “Youth employment promotion through agricultural
development (EPP)“. It addresses three of the most important challenges facing SMEs in Sierra
Leone:
 Inadequate business knowledge and management skills
 Lack of guidance and practical steps that could bring about change and development
 Insufficient financial resources to grow businesses respectively.
Currently, it is being implemented in EPP’s target districts of Kono, Kailahun and Koinadugu in Sierra
Leone and has targeted mainly small businesses2 (employing less than 5 people permanently or
casually), mostly sole proprietors, and largely agribusinesses that have existed for at least six months.
1
Kay Grulich (international advisor) and Alphonso Campbell (national advisor)
2
National MSME Development Strategy
2
1 Introduction
Until February 2016, a total of 245 participants have been trained and coached or are undergoing the
SME Loop. About 35 % of the participants are currently female entrepreneurs.
In 2015, the approach was transferred to Benin within the context of the Special Initiative One World,
No Hunger and its programme “Green Innovation Centres for the Agriculture and Food Sector“. Here
the SME Loop is applied already at a larger scale aiming to reach 1.500 SME in 17 communities until
the end of 2017. So far, more than 500 business owners underwent training. At the moment, 29
qualified coaches provide their service to the entrepreneurs. Almost 200 enterprises have developed
their business plan as part of a final assignment and have presented them to local financial
institutions. One of them is Modeste Dayato.
Modeste Dayato
Poultry farmer
Village of Kahounhouagon
Community of Zogbodomey
Benin
“I appreciate the SME Business Loop as it takes into
account my individual needs and helps me to apply
what I have learned during the training. Furthermore,
I got to know other entrepreneurs in the training with
whom I am still in contact and discuss experiences
and difficulties.”
Modeste Dayato, poultry farmer in the community of Zogbodomey in Benin, likes the SME
Business Training and Coaching Loop as it is adaptable to take into account his individual needs.
1.2 About this handbook

Because of the success in Sierra Leone and Benin, we believe the SME Loop shall be made available
to programmes and institutions interested in promoting SME development. The handbook provides
in a systematic manner a description of the SME Loop and guides through the most important steps
for the utilization of the Loop as a tool to support employment promotion via an increase of the
competitiveness of SMEs (mainly peri-urban and rural).
It is addressing:
 Programme managers who want to run or support a proven tool at enterprise level.
 Providers of business development services who want to increase their service offers.
 Public and private SMEs support agencies searching for an approach to systematically enhance
the competitiveness of SMEs.
1.3 How to use this handbook

The structure of this handbook closely follows the process of planning, preparation, implementation
and follow-up of the SME-Loop:
1. Define your SME Loop
If you plan to implement the SME Loop, you will have to set the boundaries for the endeavour
that means to determine and clarify what your financial and human resources allow for and
what the conception of your programme demands for. Then you can proceed to define the
objective and target group. For the implementation of the SME Loop you will need service
providers and, if applicable, partners – analyse your institutional environment to check which
3
1 Introduction
organisations are appropriate. Finally, it will be necessary to then sketch out the human and
financial requirements for the implementation.
2. Let’s get started
Here, we are stepping up to the hands-on preparation of the SME Loop – how to cooperate with
partners, selection of service providers, how to identify and pre-select entrepreneur candidates
as well as the scheduling of the process.
3. SME Loop implementation step by step
This stage starts with the assessment and (final) selection of preselected entrepreneurs (see
previous stage). Two trainings of three days will take place, each followed by a coaching period.
A graduation ceremony will conclude the SME Loop.
4. Measure, learn and share
Implementation of the SME Loop and effects of it should be measured and integrated into the
programme framework. This requires an appropriate M&E set-up, and, as far as GIZ’s Global
Initiatives are concerned, the feeding of data into the central information system.
The SME Loop is conceived as a learning process for all involved parties. It provides lessons that
can help improve its implementation and its impact. The success stories and lessons learnt
should be shared within the country and within (German) development cooperation so that
others as well can be inspired from it.
Still, it is necessary that you read or at least scan through the whole manual before you start working
on “your” SME Loop. It is important since the SME Loop is conceived as a flexible instrument; hence,
there is no binding chronological order; also, it will help you making sure you have an idea of the
whole process before starting. While working on your own programme, you can make use of the
different chapters one by one; however the topics are sometimes overlapping or repetitive. To avoid
repetition of the subjects and explanations, references are given to indicate where further; more
detailed information on a specific topic can be found.
We acknowledge that the SME Loop has not yet a track record of dozens of years of experience. But
the content of the Loop is built on generations of experience in providing SME support. We see this
handbook as a milestone in a broader process of setting up and institutionalizing a promising
approach in the forthcoming years. We are very interested in your feedbacks and comments (please
address your feedback to: ralf.barthelmes@giz.de) so that the quality of the SME Loop can be further
enhanced and the outreach and the impact will be further increased.
4
2 The SME Loop Approach
Figure 1: Synopsis of the SME Business Training and Coaching Loop
The SME Loop consists of seven phases that are briefly described in this chapter. The time span for
the implementation of one entire SME Loop process amounts to six months (excluding the
preparatory time).
 Assessment & Selection
 First Training (3 days)
 Coaching Phase 1: (2 coaching sessions per month for 2 months)
 Second Training (3 days)
 Coaching Phase 2 (3 coaching sessions per month for 3 months)
 Graduation Ceremony (1 day)
 Coaching Phase 3 (4 vouchers for 4 additional coaching sessions)
Assessment & Selection

The identified and pre-selected potential participants in the SME Loop should be assessed regarding
their entrepreneurial profile and motivation, training needs and capacities. Final selection will then
be made based on the assessment.
First Training (3 days)

In a first training of three days, the entrepreneurs will learn basic skills and attitudes to become
successful entrepreneurs through different methods of adult learning like exercises, role plays and
discussions. Selected topics vary according to the results of the assessment, but usually the following
topics are addressed, amongst others: Entrepreneurship, record-keeping, sources of finance,
5
introduction to enterprise analysis etc. Peer-to-Peer learning is an important format that is used
within training sequences and promoted beyond them.
Coaching Phase 1 (2 coaching sessions per month for 2 months)

For a period of two months, a coach visits each entrepreneur two times each month. In those four
coaching sessions (as well as in the following coaching phase), the coach supports the coachee
according to his/her needs and jointly set goals. At the beginning, coachee and coach agree on a
work plan for the full coaching period, fixing goals of enterprise and self-development. This plan is
considered as a guideline for the coaching relationship and remains adaptive, allowing for changes
and ad-hoc issues to receive sufficient attention.
Second Training (3 days)

The second training is building on the first training and coaching phase. The trainer and coaches go
through the coaching reports and the assessments of the enterprises to select the modules and
contents of the second training. Potential topics include: Communication skills, decision-making,
marketing, purchase and production management, risk management, access to finance, business
planning.
Coaching Phase 2 (3 coaching sessions per month for 3 months)

After the second training block, a more intensive coaching phase is taking place with three coaching
sessions per month for three months. Coachee and coach continue working on issues of the first
coaching phase, new topics, maybe some that surfaced in the second training or ad-hoc issues. In this
phase, the development of an entrepreneurial vision and a long-term plan are usually key issues.
Graduation Ceremony (1 day)

To mark the official end of the supported phase - in which the entrepreneurs get intensive training
and coaching - they come together to celebrate a graduation ceremony. In the course of this
ceremony, (self-) evaluation, as well as exchange of experiences and planning of future networking is
on the day’s agenda.
Coaching Phase 3 (4 vouchers for 4 additional coaching sessions)

At the graduation ceremony the graduated entrepreneurs receive four vouchers that allow them to
arrange four additional coaching sessions during the next four months with the coach.
Access to finance
Access to finance is one of the most important aspects to successfully run a business. But it is not only about
choosing the best financial product. It’s start much earlier. The SME Business Training and Coaching Loop is
addressing financial management and access to finance throughout the entire loop cycle.
 Already during the preparation of the SME Loop contact to financial institutions shall be made to
inform them about the programme and to raise their interest in getting involved.
 While doing the assessment of pre-selected enterprises financial competencies are part of the
aspects that decide whether or not an entrepreneur will participate in the SME Loop. Entrepreneurs
with some basic understanding on financial issues and a good potential to make best use of it
additional financial means are preferred.
 In training access to finance is a cross cutting topic that is addressed in various ways indirectly or
directly:
- by increasing financial skills and critical knowledge on financial services and therefore improve
the chance for responsible access to finance.
- Two of the seven modules of the first training are directly focussing on financial issues: Module 2
“Record keeping & costing”, module 6 “Financial planning & banking”
6
3 Define your SME Loop
- The second training provides another two modules focussing on “Production, purchase & selling”
(module 10) and “Access to finance” (module 12).
- In the trainings inputs and exercises are provided to apply the inputs to the entrepreneur’s
individual reality.
- By inviting financial institutions to present themselves and to foster individual contacts.
 In the coaching phases the topics of the training modules are taken up so that the entrepreneurs
gradually integrate in daily business life what is of importance to them. This is done
- by imparting specific knowledge on business skills favourable to access to finance like Business
Planning, SWOT analysis, negotiation skills and support practical use
- by supporting financial decisions prepared and taken by the entrepreneurs
- by facilitating the contact and exchange with local financial institutions
- by encouraging Peer-to-Peer discussions on experiences with different forms of finances
- During the second coaching phase a final assignment is foreseen. This assignment is the
culmination of the Loop where the Loop participants apply the newly acquired competencies to
push forward her or his business. Quite often the final assignment focusses on a financial project
such as the acquisition of a loan or is closely related to financial issues such as the Pitching of a
new business idea based on a solid financial calculation.

In this first step, the implementing organisation lays the foundations for a successful implementation
of the SME Loop. The appropriate definition of “your” SME Loop is a function of what the
implementing development programme wants to achieve (objective, outreach, target group) on the
one hand, and the available resources (human, financial) and country-specific conditions
(accessibility to communities, distances, weather and climatic conditions) on the other.
3.1 Setting the boundaries

Setting the boundaries refers to a number of aspects and conditions that need to be clearly defined
before engaging into SME support in any ways. More specifically, you need to be explicit about:
 Your objectives (what do you want to achieve?)
 Criteria for your target group (required size, sector, position in the value chain, literacy level,
etc.)
 Your geographical area of intervention (are you targeting your entire intervention area or just
a part of it)
 Number of participants (how many promoted SMEs do your indicators demand, how many
participants can you possibly train, any minimum requirements?)
 Available time (in what time span do you want to achieve your objectives, can you go beyond
the programme phase?).
Experiences from Sierra Leone and Benin show that the number of participants a single coach can
handle varies between 12 and 25 per Loop.
3.2 Define the objective and target group

The SME Loop is aiming at increasing competitiveness and promoting employment. Nevertheless,
you may want to add or refine the objective so that it better fits your purposes. The SME Loop
potentially contributes to:
 Income increase of employees
7
 Higher employment rates per enterprise

 Improving the operating ratio of enterprises
 Improved business skills of business owners and managers
 Better matchmaking between SMEs and providers of financial services
 Better access to finance for SMEs
 Increase in demand for business development services
 Capacity development and extension of portfolio of service providers
 Framework for service provision of public and private SME support agencies
According to your programme, the target group should be defined precisely. A set of criteria may be
elaborated that will serve for the succeeding steps, the identification and selection of participants,
the selection of service providers as well as the choice of trainers and coaches.
Possible criteria for the selection of the target group:

 Business has existed on the market for at least six months.
 Formal and informal businesses may be included.
 Business has the potential to increase its revenue/competitiveness and to provide additional
employment opportunities.
 Participants in the SME Loop are owners or managers of market-oriented businesses.
 The SME is regarded as main source of income for the owner.
 Meso-level service and input providers are explicitly part of the targeted economic actors.
 Emphasis on women and/or youth.
 Entrepreneurs should be able to read and write and to do some basic calculation3.
 Entrepreneurs that are used to work with written documents and to produce them.
 Openness for innovation (e.g. already uses or states interest in a specific innovation).
These following questions may help in defining the target group and the criteria for the selection of
participants:
- Is a specific value chain or a specific link in the chain of particular interest?
- Are youths and/or women specifically addressed?
- Should informal or formal businesses or both be targeted?
- What should the educational level of the entrepreneurs be like?
- Do we want to include the most successful or rather the less successful ones
with supposedly promising potential?
A programme-related maximum target number, the targeting intervention area (nationwide,

selected states, provinces, regions, districts), programme objectives or the presence of other
development programmes in the area of intervention might also influence the choice of participants.
In the global programme “Green Innovation Centres for the Agriculture and Food Sector” a value
chain approach is applied. Like in Benin, the SME Loop is specifically targeting SMEs up- and
downstream of the production. This can be input suppliers, producers of agricultural tools and
equipment, lenders for harvest and post-harvest technology, food processing companies, packaging
3
In case illiterates are accepted as participants, the SME Loop needs to be adapted and methods, topics and materials
should be selected accordingly. It is recommended that Illiterate candidates for the SME Loop may go through a programme
of functional literacy before they are accepted to the SME Loop or are linked to such a programme while participating in the
Loop. Some trainings exercises are designed in a way that they can be utilized as well when illiterate entrepreneurs
participate.
8
firms, traders, restaurant owners using products from the supported value chains, retailers, private
laboratories for product quality, etc.
3.3 Cooperation with service providers and other partners

There are certainly different ways of utilizing the SME Loop. So far, it has been used in the way that
GIZ-supported programmes contract a number of service providers to run the SME Loop. In other
settings, the SME Loop can be seen as a tool to be integrated into the service portfolio of a service
provider to enlarge his service portfolio. These service providers may be public or private institutions
that are capable and experienced in implementing training and coaching/mentoring assignments
such as business associations, local consulting firms, SME agencies from sector ministries or in some
cases NGOs offering service provision. A third way of utilizing the Loop is to propose it as an
approach for the implementation of strategic programmes such as ministerial policies aiming at
promoting SME development, employment promotion, youth empowerment or private sector-led
initiatives with similar goals.
By any means, the final goals with regard to sustainability should be to anchor the SME Loop within
appropriate institutions and/or strategies.
Another important aspect to be considered is the collaboration with strategic partners such as donor
agencies or other programmes that are interested in achieving similar objectives or that are already
running initiatives addressing the same target group. Possibilities to join hands either in
conceptualization or implementation should be analysed. This cooperation might increase the
outreach and the visibility of the SME Loop and might result in a wider and faster acceptance of the
approach within the target groups and political partners.
The following considerations concerning human resource requirements and costs involved are based
on the assumption that a programme is collaborating with service providers to implement the SME
Loop.
3.4 Human Resources required!

The SME Loop is concerted action of a funding programme, a service provider and, if applicable, a
partner institution. It is the funding programme’s task to clarify the need for human resources in
their own ranks as well as with regard to service provision (for the tender) in order to establish
favourable conditions for a successful implementation process. As the funding programme, you will
need persons dedicated and qualified to coordinate and implement the Loop. The requirements
indicated in the following table are derived from the experience in Sierra Leone, Benin and other
training and coaching programmes. This is, however, very indicative and can vary depending on your
structure, mode of operation, target group and number, etc.
Example of staff and designated roles - SME Loop Implementation within the Green Innovation Centre in
Benin:
The Green Innovation Centre deploys two national programme coordinators, one in charge of eleven
communes in Southern Benin, the other in charge of six communes in the North. Monitoring & evaluation of
the Loop is assured by the M&E Team for the overall programme.
For the implementation of the SME Loop, the programme has contracted eight service providers: seven local
organizations and one international NGO. The local NGOs employ each one programme manager, two trainers
and one coach, all from their existent staff. Since the international NGO has a large number of parallel Loop
groups, it has engaged two programme managers, four trainers and 22 coaches. In addition, they contract
external consultants for the selection of entrepreneurs and for the monitoring & evaluation.
9
Role Coordinator of SME SME Loop Programme Focal person for M&E Coordinator Trainers Coaches Trainer(s) of Trainer
Loop programme Manager of service SME Loop and coaches
provider Programme in
partner institution
Employment form Programme staff; Employed by (each) Personnel of partner Programme staff; Employed by Employed by Contracted by the
mostly full-time, service provider; institution(s) ideally, M&E of the partner/service partner/service programme or
depending on size of depending on size of Loop will be provider; provider; service provider;
the SME Loop may target group and integrated into the long-time employed full-time contracted as short-
also work in other geography: part-time overall M&E of the or independent and employment; term expert
programmes work for the SME Loop programme and contracted number depending according to needs;
parallel, of one person up to done by the M&E according to need: on target number of optional: two
depending on scope more persons in full- officer of the necessary number of entrepreneurs persons – one for
and geographical time; programme trainers depends on training of trainers
area SME Loop target number of and one for training
responsibility needed entrepreneurs to be of coaches
trained
Tasks Defining structure of Refining structure with Monitoring Help defining set-up Developing full Delivering individual Delivering training of
SME Loop, targeting GIZ team/Programme implementation of of SME Loop to ease training curriculum coaching sessions trainers: structure of
group and objectives coordinator; selecting SME Loop; M&E e.g. adapt including handouts (12 coachees per SME Loop,
of SME Loop trainer and coaches providing advice and assessment to M&E etc., possibly coach); methodology and
(together with (with GIZ Programme feedback for the requirements; translating material administrative work; content training;
team); Coordinator);organising implementation developing M&E (might be done by supporting M&E; Delivering training of
selecting service training and coaching process; tools; one senior trainer); supporting trainer at Coaches: structure
provider; (and assessment), feeding results and training coaches in preparing and training session (co- of SME Loop;
creating and supervision; organising lessons learnt into M&E tools in case delivering trainings facilitator) methodology and
managing relevant intervision of trainers partner institution; they should (with up to 24 content of coaching
partnerships for the and/or coaches, etc. ensuring knowledge contribute; participants)
programme; transfer into partner supervising; carrying according to
overseeing organisation out or organising full assessment and
programme delivery, M&E; analysing discussions with
etc. data, writing reports coaches
Needed at which All stages All stages All stages All stages, First, second training All stages of Training of trainers
stage depending on M&E and graduation implementation, and coaches
set-up ceremony maybe not for
assessment
10
3.5 Costs to consider

Depending on the mode of delivery, you need to calculate with varying costs. In order to have fast
and visible results, contracting of service providers will be your first option. This is the way it is
handled so far in Sierra Leone and Benin. The biggest budget item will be the contract with service
providers followed by the salary for programme staff responsible for the Loop.
What should be avoided by any means, is the provision of tools and equipment to target groups. The
SME Loop is about entrepreneurial competencies, about how to run a business. Giving away gifts
such as input or equipment does not reflect the entrepreneurial spirit and would be
counterproductive. Further on, we are convinced that no sitting allowances shall be paid. The
participants receive a full package of training and coaching for free (or at a symbolic charge); hence
there is no argument at all to add financial incentives.
In some countries, there might be a lack of experienced service providers for the Loop. First of all,
you should rethink the idea of utilizing the Loop. If you need years to capacitate the service providers
before you can start partnering with them for the implementation of the Loop, please do not even
start at all. We want fast results with the SME Loop. Your goal should be to collaborate with service
providers that have experience in training and coaching and may even have trainers that are certified
in the training exercises proposed in this handbook. Still, even experienced service providers do not
yet know the SME Loop. Therefore, in most cases you should budget for training of trainers and
training of coaches sessions to assure that the service providers understand the logic and principles
and methodologies of the Loop, which is key for a successful implementation.
In addition, other costs need to be considered when setting up a budget for the SME Loop:
 Capacity development:
- Venue and catering of training for trainers and coaches (possibly also service providers and
partner organizations)
 Travel expenses:
- For trainers and especially coaches
- For entrepreneurs to first and second training and graduation ceremony (if agreed to pay
those expenses)
- For programme manager and other required personal (e.g. consultancy)
 Training for entrepreneurs:
- Costs for venue of first and second training and graduation ceremony
- Costs for catering
 Costs for stationery, printing:
- Costs for training material (including trainer and coaching manuals, handouts, blackboard,
etc.)
- Possibly: printing of cash books etc. for entrepreneurs
- Printing of material for coaches (development plans, visiting report, etc.)
 Possibly:
- Petty cash for coaches (facilitate visits; go to internet café with entrepreneur, etc.)
- Costs for facilitation/kick-off of peer-to-peer (e.g. costs for first meeting)
Financial allowances to or contribution by participants for training and coaching are matters that are
strongly subject to local and national habits and regulations. We recommend:
11
4 Let’s get started
 Not to pay any sitting allowances.

 GIZ caters for training, accommodation and food.
 To demand a symbolical contribution by the coachees at least in coaching phase 3.
 Transport might be organised and paid by participants themselves.
In case you are planning a financial contribution to be paid by the participants of the SME Loop,
please consider the financial possibilities of the entrepreneurs. Depending on your target group, you
might consider charging contribution to training and/or coaching according to the economic size of
the enterprise. Most of the SMEs, however, will certainly not be able to pay a cost-covering price for
the Loop.

4.1 Cooperation with partners
Cooperation with a government agency or a business association to include the SME Loop in strategic
documents and programmes will be made under the header of the overall programme and will
therefore not be elaborated on at this place.
When bringing on board an additional partner such as a donor agency, you need to clarify and fix the
roles and responsibilities of each party.
 What are the objectives of the partnership – why do you come together? What are the
benefits for each partner?
 What kind of partnership is appropriate?
- Collaboration involves great autonomy and no permanent organizational commitments or
combined services. Examples: sharing information, coordinating efforts.
- Strategic alliance involves shared or transferred decision-making power e.g. joint
programming and planning.
- Cost-sharing occurs when each partner provides different resources, such as facilities, staff,
or equipment.
- Grant-match occurs when a partner organisation provides a grant and you as the recipient
provide a match in e.g. services or supplies.
The kind of partnership you agree on will then determine the responsibilities and roles of each
partner as well as the nature and amount of contributions of each side.
4.2 Selection of service providers

Service providers are the implementing partners for the SME Loop. They will take over such tasks as
training and coaching of participants. You will try to find experienced service providers with
experience in
 The conception and implementation of entrepreneurial training (and coaching)
 Staff management of a number of (self-employed) trainers and coaches
 Project management
 Participatory group methods
 Adult education
 Peer-to-peer learning
12
The service provider should already have personnel that can be involved in the SME Loop. A
qualified, dynamic and committed programme manager is essential to adequately running the Loop.
Trainers and coaches may be employed by the service provider or can be identified easily because of
a network of available and qualified experts.
Whenever it is possible, local service providers should be preferred because of their local knowledge
when it comes to local structures and actors, customs and traditions as well as languages. Working
with these local service providers will strengthen their role, create local capacities for the SME Loop
also for the time when the GIZ programme is terminated, and thus, help anchoring the approach in
the locality and in the country for the future.
If there are no suitable local service providers available or if their capacities are not suitable for the
targeted numbers, service providers from the capital city or international institutions may also be
contracted.
At this point in time, you have to make a strategic decision.

 Do you prefer fast results and maybe less institutional sustainability? Then you may opt for a
service provider which is doing whatever you want him to do.
 If institutional sustainability is core, you may choose an institution which is deeply rooted in
the local society even though it might not be the strongest partner and needs more capacity
development than others.
 A third alternative is a committed SME support agency that already offers services to its clients
or members and wants to enlarge its services by taking up the SME Loop. Here you will
probably have an increasing degree of impact over time with the possibility that the Loop will
be implemented even without support from your programme.
According to GIZ rules and regulation, the selection and contracting of a service provider has to
follow GIZ rules and regulations with regard to public tender.
The collaboration should be ruled by a contract or MoU that incorporates clear terms of reference
and a clarification of rules and responsibilities of the signing parties.
4.3 Selection of trainers and coaches

Some service providers will have employed trainers and coaches; others will need to contract them
from their networks. In any case, the selection of these persons is of utmost importance since they
are the ones that will be working on a continuous base with the participants of the Loop. Below you
find the qualifications, skills and competencies trainers and coaches should have:
SME Loop Trainer SME Loop Coach

High Motivation!
BACKGROUND
economics, business management, value chains economics, business management; adult
(+pedagogics) education, coaching
KNOWLEDGE/SKILLS
(basic) understanding of economics, market and value chains
local language and official language(s)
training facilitation, group dynamics and adult adult education, change management, coaching
education basics
SOFT SKILLS
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attentive listening, asking solution-oriented

ability to motivate
questions, positive attitude, genuine helping
ability to adapt to a group’s learning level
attitude, promoting self-development
ability to motivate
flexibly, respectful and emphatic personality
good communication and explanation skills good communication skills
does not need to be in the centre of attention
at ease and self-assured in front of a group
but has a certain presence in the room
feeling for the needs and capacity of individuals and feeling for the needs and capacity of the
groups and ability to adapt to it coachees and ability to adapt to it
ability to create constructive and open atmosphere ability to create constructive and open
within the group atmosphere between coach and coachee
good group management
entrepreneurial attitude
process-oriented (rather than result-oriented)
Analytical
EXPERIENCES
as a professional business coach (need depends
as a trainer needed
on training for coaches)
in group management
as an entrepreneur
You should be very attentive during the selection process. A senior business man who shall receive
training or coaching from a 20 year old high school graduate will probably not stay committed and
may drop out of the Loop.
In many countries you will find trainers with qualification and/or certification of different
entrepreneurship approaches such as “CEFE”, “Start and improve your business” (SIYB) from the
International Labour Office (ILO) or “EMPRETEC” from UNCTAD. These certifications give an
indication about the quality of the trainers. You may want to add this to your criteria catalogue for
the selection of trainers and service providers.
In order to select trainers and coaches, the following aspects are worth considering:
 One person may be trainer and coach at the same time
 Yet again, trainers and coaches need to be selected separately since the profiles vary
considerably.
 Selection should take place on the basis of
- The CV of the applicant
- Motivation letter for work as SME Loop trainer
- Interview
- Explaining the methodology of a freely chosen training exercise (for trainers)
- Role play to practice coaching situation
Expectations towards the potential trainer and coach, workload, tasks and role should be made very
clear from the beginning.
4.4 Capacity development for service provider, trainers and coaches

The SME Loop is built on various approaches for business development. Probably you will not find
trainers and coaches that will cover all the qualifications needed. Even in cases where all trainers and
coaches fulfil high standards and possess long experience in their jobs, it is still recommended to
14
organize an introductory session to the SME Loop. Besides skills for training and coaching, it is
important for both groups to understand the SME Loop, its goals and the whole process very well. It
is crucial for the success of the approach that trainers and coaches develop an understanding of their
role within the whole SME Loop process. They both should participate together in the introductory
session to reach the following objectives:
 Trainers have sufficient experience and expertise in the training content and methodology.
 Trainers are clear about the approach to learning underlying the SME Loop and, thus, have the
right understanding of their role as trainer-facilitator as opposed to teacher.
 Trainers and coaches understand the need to work as a team.
 Trainers and coaches know each other and understand what the other part is doing.
 Coaches need to know about the training contents.
 Coaches need to develop a common idea of coaching and learn methods and tools.
 To kick-start the cooperation between trainers and coaches.
In Annexe 1 you will find a coaching guide that can be used by service providers and coaches to
prepare and continuously improve your coaching skills.
In addition, the coaches should also participate in the two trainings for the participants of the SME
Loop for three reasons:
 The coaches get to know the entrepreneurs, their future clients.
 The coaches will know which topics are discussed during the trainings.
 The coaches can assist and support the trainers in setting up the second training based on the
on-going coaching with the entrepreneurs.
The introductory session could look like as follows:

 The SME Loop (overview, preparation and implementation process)
 Training methodology of SME Loop
 Training content
 Coaching methodology and content of coaching
 Introduction into training and coaching formats, reporting
 Team building amongst trainers and coaches
The duration of the session depends on your experience with the Loop and the experiences of the
selected trainers and coaches. When introducing the Loop to trainers and coaches for the first time,
the introductory session will probably take up to two days.
The introductory session can be organized by the funding programme or can be sourced out. The
contractor shall have a solid understanding of the trainings contents and methodologies selected for
the SME Loop. Additionally it might be necessary to organize Training of Trainers and/or Training of
Coaches to assure a good quality of the Loop. It is recommended to contract nationally or
internationally renowned institutions that provide certified (master) trainers in the approaches
referred to in this handbook. If you decide to source out any of these training, you will need to
respect the tender regulations by GIZ.
Processual Capacity Development for service providers

It is advisable that service provider(s) and partner(s) are assigned to responsibility in the SME Loop as
much as possible to guarantee ownership and sustainability. Nonetheless, since the Loop is new for
15
most of the service providers, we see the need to take a step by step approach to build the capacities
of the service providers towards a sustainable solution in which they will be capable of managing the
entire process. At the beginning, trust hast to be built between the programme, the service providers
as well as the trainers and coaches. In most cases, it will be necessary that the programme will take
the responsibility and the financial commitment to kick-start the implementation of the Loop. By
gaining experience with the tool, a path to transfer more and more responsibilities to the service
provider shall be elaborated. For example,
 During the first round of the Loop, identification and assessment may be organized by the
programme and overseen by programme staff, but service provider(s) and/or partner(s)
participate and/or take an active role within the process.
 In the second round, the service providers might take the task of identification and
assessment, with programme staff only giving support where needed.
 In the third round, full responsibility will be assigned to the service providers. They will
implement the Loop independently (according to the agreed plan and with the agreed
reporting to GIZ).
The implementation of the Loop itself should always be done by service providers and not by
programme staff. The programme supports service providers in the first rounds with exchange
sessions about the implementation of the Loop and content-wise refresher units, if necessary.
Otherwise, strengthening the implementation capacities of the service providers is very similar to GIZ
core business of human capacity development. This can easily be provided by GIZ staff but may be
outsourced e.g. combined with the qualification measures for trainers and coaches.
4.5 Get in contact with financial institutions

The SME Loop is taking into account that quite often financial services are scarce or poorly adapted
to the actual needs of SMEs. This is done by actively providing hands-on information and establishing
face-to-face exchange between entrepreneurs and finance institutions along the entire Loop.
In order to get local financial service providers involved in the SME Loop, it will be important to share
a maximum of information on the SME Loop with them so that they clearly see the potentials and
their role in the process. This will require some preparatory action before bringing them together
with entrepreneurs in the framework of the training:
 Preparation of a written brief description of the SME Loop (objectives, approach, target group,
area of intervention, etc.)
 Identification of existing local financial institutions in the proximity of the participants
 Making contact – personal visit in order to create interest in getting involved in the Loop:
- Explain the SME Loop
- Hand over some written information, leaflet or something else
- Explain the specific interest/important role of local financial institutions
- Elaborate on successful examples of SME Loop implementation and the advantage of close
links between financial institutions and participants
- Explore possibilities for collaboration and their interest in the Loop; are there any specific
conditions or requirements for collaboration from institution’s side?
- Find out what are relevant financial products of this institution
- Define time span appropriate for visit of participants to the institution and/or of the
institution to the participants at the training venue
16
 Stay in touch; keep the financial institutions informed about the Loop and potential financial
needs of participants.
4.6 Identification and pre-selection of entrepreneurs

Potential participants need to be identified and informed about the SME Loop and the process of
application. Entrepreneurs will be pre-selected on the basis of their application documents.
Information and identification of potential participants

With this step you start going public. It includes
 Information about the Loop in a way that catches the interest of possible participants
 Provision of application channels for interested business owners
 Description of the application process
To assure transparency of the identification and selection process and a wider coverage about the
Loop, we propose to organize a call for proposal. According to the specific ways of communication in
your country, this can be done via different media channels such as social media, print media, radio
but also poster ads and display of leaflets in relevant institutions.
Additionally, strategic partners, business associations, chambers, relevant ministries and of course
SME support agencies (might they be implementing partner for the Loop or not) can be asked to use
their channels in order to have a multiplication effect of media utilization.
The disseminated information may include the following elements:

 What is the SME Loop?
 What are conditions for participation?
 Do I fit in the target group?
 How do I apply?
 Where do I find the application documents?
 What is the deadline for my application?
 How do I know if I am pre-selected or not?
 What are the next steps if I am pre-selected?
Attached to the form, the conditions of participation should be made clear again (e.g. time- and
workload, financial contribution, no direct access to finance etc.) not only to avoid false expectations
but also to avoid application, assessment or even participation of applicants who do not agree to
those conditions.
Process of application
Pre-selection may be carried out on the basis of a short application form. The form should not be
longer than one page and only ask for basic data and information about the entrepreneur and their
SME, which is necessary to assess whether the applicant fits in the target group.
Questions may cover, for example, contact address, structural data of the applicant (gender, age,
education level) and the enterprise (sector, years of activity, size of the enterprise, whether it is the
main source of income, problems exercising business, future objectives).
Where access to Internet is common, the application forms can be placed online, for download,
filling and sending. If the targeted business men/women are mainly from rural areas where the
17
5 SME Loop Implementation step by step
access to the web is difficult or the interested people are not acquainted with modern media, you
need to find local places (office of Loop partners, GIZ programme, business organisations) where
printed application forms can be found and handed in.
In cases (semi-)illiterates are part of the target group, a consultation hour may be offered where the
questionnaire can be filled in together.
Pre-selection
At the end of the application period, all applications are screened and rated according to the criteria
and priorities that have been set by the programme (in coordination with partners and service
providers) beforehand. On this basis, a short-list of all potential applicants eligible for assessment will
be established.
The number of entrepreneurs eligible for assessment should be significantly higher than the targeted
number of participants to be able to choose only entrepreneurs that are really eligible for and profit
from the programme.
Please do not wait too long after the deadline has passed to inform the pre-selected (or all
applicants) about who has been chosen for the next step, the assessment.
4.7 Time planning for setting up your SME Loop

There are quite a number of issues to be considered to refine your SME Loop and to get started. It is
therefore better to schedule enough time for proper conceptualization and preparation. Make a
realistic time plan! Factor in all the tasks as well as less foreseeable elements like bureaucracy and
absences of important stakeholders.
The time plan presented below figures the major tasks that the programme and other involved
stakeholders need to conduct before the SME Loop can be implemented. If at a later stage, the SME
Loop outreach should be increased or major adjustments are necessary, it might be necessary to
repeat some of the tasks. The actual time needed for one task may vary extremely according to many
circumstances like administrative procedures, scope and objectives of the programme, available staff
and time. Moreover, this is not an all-encompassing list of tasks, some others might be relevant as
well for some projects while others do not need to carry out all tasks.
In some cases (for instance in agricultural value chains), it might also be necessary to consider rainy
or planting season and adapting length and intensity of the Loop accordingly (e.g. because
entrepreneurs might not have time for training and coaching during peak season of processing, trade
etc.).
In annexe 4you will find a table presenting the time requirements for setting up the SME Loop in
Benin.

This chapter describes the implementation of the SME Loop once the preparatory activities are
completed. It is elaborating on the steps how to select the participants of the SME Loop (chapter
5.1.), it explains the training and coaching methodology and structure (chapter 5.2. and 5.3.),
18
describes the content of the training modules (chapter 5.4.) and explains why you should close the
Loop cycle with a graduation ceremony (chapter 5.5.).
Ideally, most of the activities described below should be taken over by service providers. GIZ as
funding programme is mainly acting as supporting entity for the process, has a say in the selection of
the entrepreneurs and verifies that quality standards and reporting are respected by the service
providers.
5.1 Assessment and selection of entrepreneurs

Each enterprise that has been pre-selected will undergo an assessment. Next to the enterprises, a
closer look at the business owner will be done. Please inform the pre-selected persons about the
whole process to ensure transparency and to avoid misunderstandings.
The assessment combines different functions:

 Selecting the “right” entrepreneurs who fit the selection criteria
 Proving motivation and entrepreneurial potential of the business owners
 The information gained through the assessment is the starting point for training and coaching;
it strongly enhances chances that content and methodology are adapted to the participants’
needs and capacities.
 Moreover, the data will be used for the monitoring of the programme as well as for (self-)
evaluation for the trainer and coaches.
The main instrument of the assessment is a questionnaire that covers three areas:
1. Assessment of entrepreneurial characteristics:
(Self-) evaluation of entrepreneurial characteristics like initiative, risk acceptance and ability
for problem-solving
2. Assessment of training needs and capacities of the entrepreneur:
Analysis of general skills like reading, writing and counting as well as specific business skills like
record keeping, marketing and business planning to document the existing competencies,
possible gaps and the areas where the entrepreneur wants to create more competencies
3. Assessment of the profile of the enterprise:
Questions about the enterprise like its field of activity, years of existence, number of
employees, or profit give a first idea about the potential of the enterprise.
The questionnaire will be filled by the entrepreneurs themselves or together with an interviewer.
Especially for a target group with lower educational level, the latter method should be favoured to
make sure that the entrepreneur fully understands all questions. Ideally, the questionnaires may be
complemented by a short interview with open questions. In this interview, the entrepreneur gets the
chance to provide more detailed information on his/her enterprise, the entrepreneurial vision, the
personnel, challenges and issues he/she wants to work on.
Assessment can take place as a visit of the enterprises or as an event at one location where the pre-
selected entrepreneurs are invited to undergo an interview. To visit every entrepreneur in his/her
enterprise is more time- and resource-consuming, but the information quality is assured. In addition,
a first impression of the enterprise can be gained which helps to correlate the information provided
by the business owner with the situation in his/her enterprise. If the enterprises cannot be visited,
the assessment questions need to be more specific and offer possibilities for triangulation.
19
Another option may be a self-evaluation done by the entrepreneur. Nevertheless, to avoid or

minimize the danger of unbalanced decisions, it is advisable to not only rely on that. The
entrepreneur might not really understand the questions posed in the self-assessment form or has no
possibility to compare with similar enterprises. Annexe 4 offers some examples of assessment tools
and forms.
On the basis of the questionnaire results and the interviews, the applicants will be ranked and
selected. It is not necessary to always choose those with the best results. Basically, those applicants
who are best suited to the target group are those who will be selected. However, an individual
impression of the applicant’s motivation and commitment shall at least contribute to the final
results. Particularly in case of entrepreneurs with lower capacities, selection should prioritize highly
motivated entrepreneurs with a solid business concept and vision to guarantee the worthiness of the
high (work) input of the organisers and implementers.
Who is responsible for the selection?

The assessment can be undertaken in different forms depending on the institutional anchorage of
the Loop. Wherever possible, GIZ staff should not enter into the assessment process. The service
providers contracted for the SME Loop should be in charge of the assessment as well. Ideally, the
trainers and coaches will already be involved in the assessment. They could be in charge of
conducting the open interviews since these require more experience than assisting the filling of a
questionnaire. The integration of trainers and coaches brings along a number of advantages:
 Better understanding for assessment process and collected data leads to better integration of
assessment results into their coaching/training work.
 More and first-hand information about and experience with the target group assures better
understanding for their capacities and needs. This eases a successful adaptation of
training/coaching methodology and content from the very beginning.
 Through the early first contact a basis of trust between participants and trainers/coaches is
built faster.
When partnering with a business association or a SME support agency, they should be involved in the
assessment and selection process as promoters of SME development. Contracting out the
assessment as tasks separate from the rest of the implementation is not seen as a preferred solution.
You would have too many actors that fiddle around the business owners and the necessary trust
building between the business owners and the trainers, coaches and the key service provider may
become more difficult.
The GIZ programme remains responsible or is at least actively involved in the selection of participants
to assure that the selected persons correspond to the criteria for the target group. Furthermore, it
receives the collected data to feed them into the M&E system of the programme.
5.2 The trainings – Structure and methodology

The SME Loop’s strongest asset is certainly the combination of training and coaching elements that
reinforce one another. Both parts are meshing in the sense that coaching reacts to training
experiences and vice versa, so that knowledge and skills can be developed at a more general level in
the trainings, and then taken up and applied to the entrepreneur’s specific context in the coaching.
At this point, the training part is introduced whereas the next chapter provides more information on
the coaching part.
20
The SME Loop consists of two modularized training blocks of three days each. We recommend a
certain structure of subjects for which we recommend relevant tools (i.e. exercises, learning
activities) to use in the training. Which structure for the training, what timing for the different
modules, and which tool trainers select from the variety at hand essentially depend on two factors:
 Needs and demands of participants:
- The assessment of participants provides information on the entrepreneurs’ capacities and
businesses that can be used to outline a training session.
- Some tools are also more suitable for participants with a weak literacy level than others.
- Participants may as well utter demands regarding a certain subject or topic.
- During the first coaching phase, coaches will come across recurrent issues and challenges
that entrepreneurs are facing that may require integrating them into the second training.
 Experiences and preferences of the trainer:
- We recommend working with experienced trainers (i.e. experienced in the field of
entrepreneurial development trainings). Trainers have their preferences and experiences
with regard to what works well and how participants react to it. It is wishful that they make
use of these experiences to develop session plans and select tools.
At a more general level, SME Loop trainings are guided by some orientations that are fundamental to
the overall understanding of the SME Loop and “training”:
 Adult learning: This is a practice in which adults engage in systematic and sustained self-
educating activities in order to gain new forms of knowledge, skills, attitudes, or values.
 Facilitator instead of teacher: Facilitation is closely linked to the concept of adult learning.
Facilitators help a group of people understand their needs and objectives, and
methodologically support them in self-educating activities; the facilitator is basically neutral
but in the case of training is also asked to provide advice if needed. The facilitator is the
“master of ceremony”, not the master of entrepreneurial know-how.
 Consequently, for each training session we recommend two trainers, or one trainer and one
coach as co-facilitator.
 Training methodology encompasses presentations, case studies, role plays and work groups.
 Creative learning needs an atmosphere of openness and trust.
 Trainings sessions may be held in any language helpful for participants’ understanding.
Suggested modules for the first training (3 days):

Introductory Session
1. What makes a successful entrepreneur?
2. Record-keeping &Costing
3. Setting &achieving goals
4. Introduction to enterprise analysis
5. Introduction to business planning
6. Financial planning and banking
7. Business Formalization (optional)
Closing session
Second training
The second training builds on the same foundations and values as the first one, and proposes the
same guidelines. The goal of it is twofold: On the one hand, to convey new knowledge and skills to
the participants (according to their needs and insufficiencies determined during coaching phase), on
21
the other hand to deepen knowledge, skills and understanding of subjects already touched upon in
the first training.
As for the first training also in the second training, modules, timings and exercises have to be
adapted and arranged by the trainers according to the given group. This should be done by analysing
the progress made by the entrepreneurs during the coaching and specific thematic topics that might
have come up after the first training.
This second training will put a stronger focus on peer-to-peer learning in order to strengthen
cohesion among group members for future collaboration and exchange.
Peer-to-Peer Learning
Advantages of peer-to-peer learning:
 Peer-to-Peer learning supports the idea of self-help and demand oriented learning and
appreciative inquiry.
 Learning is mutual in both directions, both peers express what they have achieved and
what is difficult to achieve. Each peer brings his/her own experience, which can then be
compared, under different circumstances.
 The learning environment is often the working environment. The
positive results of good practices can be shown on site. This leads to a
high absorption of knowledge.
 The opposite peer has no personal interest in changing the situation of a neighbouring
area.
Peer-to-Peer Learning needs structure!
In the framework of the trainings:

First and foremost through:
 Group works and exercises - whatever the size of the group!
 Role plays
 Discussion and exchange formats like information market, world café, station walk, and
others.
Beyond the training context:
By means of
 Enterprise visits (as a group or individual)
 Cooperation and network formats (club of entrepreneurs, round table, ‘field days’,
platforms, etc.)
 The initiative from participants might be needed to start it and make it viable; however,
some kind of external support (organizational, financial) or kick-off-initiative may be
helpful or even necessary.
Annexe 4 provides further readings about Peer-to-peer learning approaches.
Bringing together entrepreneurs and financial institutions

For the first training, representatives from finance institutions will be invited to exchange on
available financial products and loan access. The actual methodology for this face-to-face exchange
with finance institutions is up to the trainers to develop. However, basic elements should comprise:
 A very brief self-presentation of the finance stakeholders, their products and conditions of
access to these products.
 A comparison of mutual expectations and needs.
 A statement of overlaps and incongruities.
 A resolution on further steps (if applicable).
22
 Without the finance stakeholders: An additional reflection on the conclusions and

consequences of the exchange for entrepreneurs.
At the end of the session, participants ought to have a clear idea of the different financial products
available, how they can access them, what they would need to deliver and what they can realistically
expect from the different finance institutions.
Suggested modules for the second training (3 days):

Introductory Session
8. Market &Marketing
9. Good relations &Communication
10. Purchase, production &selling
11. Risk management
12. Access to finance
13. Visioning &Planning
Closing session
5.3 The coaching– Structure and methodology

What is coaching?
The word “coaching” literally means to transport someone from one place to another. One thing that
all forms of coaching seem to have in common is that people are using it to help others move
forward or create change.
Coaching is a process in which the coachee is supported by the coach. In this process, the coach
strengthens the coachee by using suitable questions, techniques and instruments as well as reflecting
observation to reinforce the coachee’s capacities for (widely) self-reliant problem solving, enterprise
and personality development. The needs, priorities, and capacities of the coachee determine content
and methodology of coaching.
In a coaching relationship, the coach and the coachee are equal partners. It is based on the idea that
the coachee has all required resources, skills, and experiences to improve his/her situation and to fix
a problem himself/herself.
Coach : Coachee :
Expert of the process Expert of the specific context
5.3.1 Coaching principles

By deciding to become a coach, you are intervening according to a number of principles or beliefs
that guide you. These principles underpin your actions and behaviour when you communicate with
the coachee. They are a set of common guidelines or values for your work with the coachee.
1. I will maintain my commitment to support the individual in his/her entrepreneurial

endeavour in a non-judgemental way.
23
As a coach, your role is to be non- Inform,

judgemental regarding the coachee’s instruct
explain and
issues; it is to support the coachee in demonstrate
his/her own self-development no
matter what the issue and how minor Promote,
Trust,
support,
it might seem to you. challenge and
encourage and
confront
2. I will build my coaching relationships activate
on truth, openness and trust.

Two simple rules that may guide you:
- Never say anything about your
coachee that you would not want Be accessible,
discuss Coach and
him/her to hear about afterwards. problems, train
- Basically any word uttered provide advice
between you and the coachee

remains confidential information unless your coachee has given you permission to do
differently.
3. I will always remember that the coachee is responsible for the results he/she is generating –
but I will provide support with as much energy and dedication that I can offer.
We are coaching from the principle that individuals are entirely responsible for their own
experience, decisions and the results they are getting.
4. I am fully aware that the coachee is capable of achieving much better results in his/her
business than he/she is currently doing.
To be an effective and impactful coach, you need to believe in the individual and his/her
capabilities to doing better and achieving more.
5. I will maintain my focus on what the coachee thinks and experiences.
The focus in coaching conversation is on what the coachee thinks – not the coach. You are
working with someone to help him/her get where he/she wants to go.
6. My coaching conversation will be based on equality.
Your relationship with the coachee should feel like a partnership of equals rather than
anything parental or advisory.
5.3.2 Roles and Responsibilities

The coachee expects you to have a good understanding of his/her living environment and the
challenges he/she is facing and that you know how to best manage these challenges (role of an
expert consultant).The coachee also expects you to energize and motivate him/her, to give
encouraging feedback and provide moral support when he/she encounters obstacles (role of a
mentor/advisor).However, the most important role you are expected to take is the "person of trust".
Hence, in practice, this means as a coach you need to feel at ease in different roles that are all
equally important for a successful coaching process and that include the following activities:
Note that these five elements are not displayed in a chronological order, knowing that at any stage of
the coaching process any of these activities may be used. However, a coaching process does certainly
not start by challenging and confronting a coachee but rather by informing, explaining and
encouraging.
A SME Loop coach will specifically have to:

 Support assimilation of training content
24
 Support the application of training content to the coachee’s individual (business) reality
 Support financial decision-making and, if applicable, access to financial services
 Introduce and support implementation of relevant topics e.g.
- In-depth analysis of the enterprise
- Organisational development& management of the enterprise (incl. human resources)
- Information management (incl. use of ICT)
- Business formalization
 Where helpful and appropriate e.g. to support implementation of learnt or discussed topics,
the training session can take place outside the agreed coaching space (e.g. joint visits to banks,
internet cafés, service providers, etc.)
 Support peer-to-peer learning
 Support the coachee in the completion of the final assignment (see below)
 Support the coachee in establishing an individual development plan for the time after coaching
Additional tasks of coaches:

 Support the conduct of the assessment if required
 Participation in the two trainings of entrepreneurs
 Writing reports, completing evaluation sheets, etc., as required by the employer and GIZ
 Exchange with other coaches by way of formally organised meetings and informally where
necessary and appropriate
 Exchange with other coaches (formally) by participating in organized meetings
Fundamental skills
There are some basic skills whichcan be learned and developed that will distinguish coaches of
different levels. We all have some level of ability related to the skills required, e.g. we all have some
ability to develop rapport. Other skills come less naturally, such as effective questioning, and may
require learning and practice.
Once skills are acquired, it is not like riding a bike – these skills need to be practised. Coaches do
forget! Skillsare more like muscles; they must be used regularly to keep them strong.
As a coach you need to

1. Build rapport and relationship
In the coaching relationship, your aim as coach is to create a level of rapport that lets the
coachee feel confident to talk honestly about his/her challenges, decisions, or actions in a
particular area.
2. Practice attentive and deep listening in the coaching sessions

A really good coach will have an ability to listen that often goes beyond the point at which
most people are actually able to listen. As a result of their listening, a coach is able to pass
beyond what is actually said and begin to notice the ‘unsaid’.
3. Ask good questions

The most effective way to elicit the coachee's ideas of how to address a challenge facing
him/her is to ask the right questions. Developing the ability to ask questions that set free the
information you need to facilitate your coachee's understanding of a topic and thus help
him/her to find a solution is crucial to your success. As coach you need to use questions to
25
direct the focus on particular

aspects of a problem or issue that
you want to encourage the coachee
to explore in detail.
4. Provide constructive and

encouraging feedback
Feedback is a message to a person,
which informs that person on how
the feedback-giver perceives,
understands and experiences
his/her behaviour. The ability of a
coach to give his/her own views of a
coachee constructively is important
to the coaching experience.
Effective feedback can accelerate a
coachee’s learning, inspire him/her,
motivate him/her, help him/her feel
valued and literally catapult
him/her into action.
The “typical” coaching session

The following figure illustrates the basic path that a typical coaching conversation might follow.
While there are obviously five stages illustrated, the first and last are very basic in terms of the skills
you will need to use. The ‘middle’ three stages are what actually distinguish this as a coaching
conversation, rather than any other type of conversation.
1. Establishing conversation
This stage is about the coach building the basics of a conversation, e.g. saying hello, having the
other person feel comfortable, welcoming him/her into the conversation and creating a good
balance between warmth and formality.
2. Identify topic and goal
In this activity, both coach and coachee agree on a place to begin and a desired destination. It
is a gentle orientation for the session, rather than a rigorous, detailed assessment. We are
balancing clarity and a sense of direction while maintaining pace with the coachee.
3. Surface understanding and insight
At this stage begins the real process of enquiry in order to surface real understanding and
insight for the coachee. The coach will also become clearer at this point although the primary
goal is to support the self-awareness of the coachee. At this stage it is where the magic of
coaching is happening. As the coach gently surfaces someone’s thoughts, feelings and
realisations, an insight that proves invaluable may be freed up. As someone’s head is emptied
of what has been filling it, coach and coachee may uncover a perfect idea that moved
unnoticed in the swirl of other thoughts surrounding it.
4. Shape agreements and conclusions
Here the coach is shaping the previous elements of the conversation into conclusions, or raised
awareness, or maybe actions, to encourage further progress. The key to this stage is actually
26
the previous stage. Where the coach has effectively surfaced the relevant information,
feelings, contradictions, comparisons, etc., this stage is normally straightforward. The previous
discussion has helped the coachee clarify what is actually happening, what he/she thinks about
what is happening, and also what he/she might want to do about it. The coach’s role now is to
help refine the coachee’s thoughts so that he/she can maintain progress after the session.
5. Completion/Close
This final step is about drawing the conversation to a professional close. As in the first stage, a
coach will have experience with how to complete a conversation; however, note that there’s
no ‘right’ or ‘wrong’ way to close a session. A close that lets the coachee leave with a good and
committed feeling (i.e. something has been moved, ‘I have really taken a step today’, etc.) will
strengthen his/her overall will for the change process and the commitment for the upcoming
next steps. We recommend that coach’s write “Coaching session reports” (a template is
provided in annexe 4) that may be signed by the entrepreneur.
The Coaching Cycle

Coaching is target-oriented. How to get to the target is the coach’s responsibility. After building
rapport and establishing a trustful relationship with the coachee, you can get started with jointly
setting goals and developing an action plan defining activities to achieve the goals.
In the framework of the SME Loop, coaches will supply 13 coaching sessions over a six months period
(2 sessions/month for 2 months; 3 sessions/month for 3 months). It makes sense to agree an outline
schedule of sessions (and a development plan) beforehand. The coach will probably want to plan
his/her approach over the course of sessions, e.g. what performance measures are possible? What
might be appropriate points at which to give or receive feedback?
Establish the context Create understanding and

for coaching direction
Background information Investigate the coachee

Physical environment Agree specific goals, outcomes
Mechanics of coaching
Engage the coachee in coaching
Coaching cycle Personality profiling
Completion Review andconfirmlearning
Leave the coachee feeling Review progress on goals

comfortable Look at results on coaching in
Encourage learning the coachee’s environment
Maintain a sense of support for Gain feedback from the coachee
the coachee for the coach
From: The Coaching Manual, J. Starr, Pearson 2008, 2016 (adapted)
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Final assignment
The alternating training-coaching cycle, which is at the heart of the SME Loop, will be terminated
with a final assignment. This assignment is compulsory for all participants in order to conclude the
SME Loop and is a pre-condition for receiving coaching vouchers that entitle the entrepreneur to
call upon a coach for four additional coaching sessions after the second coaching phase and
4
graduation ceremony (see below) .
The final assignment is an individual, personal assignment that is agreed upon by coach and
coachee according to the specific situation of the coachee i.e. literacy level, entrepreneurial
status quo, challenges, needs, development path so far, development plans, etc. The completion
of this final assignment will then automatically lead to the reception of four coaching vouchers at
the graduation ceremony. Note that there is no grading of the assignment; it is rather considered
a symbolical completion act of the SME Loop.
The following list provides examples for the final assignment. Which one of these examples will
eventually be chosen or whether coach and coachee agree on a completely different assignment
is subject to discussion and consensus between these two:
 Formulation of a detailed written entrepreneurial vision according to the individual
capacities of the coachee and definition of steps how to get there (for illiterates picture-
drawing or any other way of doing this is also appropriate)
 Development of an action plan (one to two years) for entrepreneurial and/or personal
development
 Development of a long-term strategy for the enterprise
 Development of a business plan or, if applicable, only parts of it like a marketing plan
 Completed process for business registration
 Completed loan application process
Coaching Phase 3
Coaching phase 3 is beyond the actual supported and accompanied SME Loop and happens after the
graduation ceremony (see below). The idea is to provide a follow-up coaching, according to the
coachee’s needs and initiative. Under the condition that the final assignment is completed, four
coaching vouchers will be given to the coachee; but whether and how many of these vouchers will be
redeemed is entirely up to the individual. Hence, the intention of the vouchers apart from additional
support is to promote self-reliant work (final assignment) and self-responsible decision-making for
coaching support.
5.4 The Training contents

The SME Loop is a combination of coaching and modularised trainings for enterprise development.
We recommend modules for both, the first training as well as the second training, and exercises that
can be chosen from and help convey the content of the modules in a way that is respectful of the
intrinsic knowledge and know-how of the individual person as well as basic ideas of adult learning.
This chapter presents descriptions of the different modules and lists the suggested exercises. The
training materials for the module are to be found in the annexe 1 and 2. Exercises that are provided
by CEFE International and ILO are copyrighted. They can be used free of charge but they cannot be
changed without prior approval from the authors.
4
Coaching vouchers for one coaching session per month over a period of four months according to the needs and
preferences of the coachee.
28
5.4.1 Modules of the first training

Introduction Session
Title Introduction Session
At the beginning of the first training block, the introductory session sets the basis
for the following training sessions. After an introduction of both trainers and
coach(es) – the latter are present as to observe and support the trainer – the
participants, trainer and coach(es) will get to know each other. An introduction
round (e.g. stating name, business, function in the business, etc.) may be an
element of this session, but interactive plays and games that require participants
Description
to move physically and in which they are the central active part are preferable.
The trainer will then present the objectives and structure of the programme to the
participants, both, of this training block and of the whole process that follows. At
the end of the introductory sessions, rules for a constructive cooperation and
communication within the group will be developed together with the participants.
At the end of the module, participants will

- Know the trainer and coach(es) and each other
Learning - Have an idea what to expect from the training block as well as from the
Objectives whole process
- Identify themselves with the rules for a constructive group atmosphere
- Be motivated to start the training modules
Proposed time About 45–60 minutes
Module 1
Title What makes a successful entrepreneur?
For the success of an enterprise the manager’s attitude and his/her

entrepreneurial features are crucial. The knowledge about them and the
development of entrepreneurial characteristics are therefore the topics of the first
module.
Description
This module gives an overview of personal characteristics that are considered
wishful in order to be a good entrepreneur. A self-assessment reveals areas of
strengths and weaknesses that can then be addressed. An understanding of
important competencies and helpful attitudes of an entrepreneur are developed
through exercises, group work and discussions.
 Entrepreneurial characteristics
Topics  Ways to improve entrepreneurial characteristics
 Responsibility acceptance
 Solution-oriented thinking

Learning - Understand the characteristics of an entrepreneur and their importance
Objectives - Perceive themselves as entrepreneurs
- Understand the need of self-responsibility and solution-oriented thinking
- Have an idea about their own strengths and weaknesses with regard to
29
entrepreneurial competences
- Feel assured and motivated to work on their weaknesses and to act like
an entrepreneur
Proposed time 1–2 hours
M1 a) Art Gallery. The Personal Entrepreneurial Characteristics/ PECs

M1 b) Do you have what it takes to be a good entrepreneur?
M1 c) How to strengthen your entrepreneurial abilities and skills?
Tools M1 d) How to strengthen your entrepreneurial abilities and skills? Activity 2
M1 e) What characteristics make a successful entrepreneur?
M1 f) Me & my business
M1 g) Bead or Pearl
Module 2
Title Record keeping & Costing
Not knowing exactly about ones income and expenses, or mixing up private and
business cash flow are major obstacles to successful business management. For
the ability to analyse one’s business, project one’s business into the future or get a
loan from the bank detailed records and exact numbers on the profitability of the
business are prerequisites. In this module participants learn why and how to keep
records, as well as to distinguish between business and household cash flow.
Description Furthermore, participants learn to differentiate cost categories and calculate costs
per month and item. Finally, they learn to make use of the data and calculations to
evaluate their businesses financially.
As for the approach of the entire SME Loop, it is recommended to let participants
practice through exercises and case studies using realistic data (at best data of
their own enterprise) in order to increase the learning impact5.
 Importance of record keeping

 Income and expenses
 Need to separate private and business cash flow
 Buying and selling on credit
Topics  Cashbook
 Types of costs
 Costs per month and item
 Profit/loss calculation
 Introduction to balance sheet

- Be aware of the need to keep proper records
Learning - Identify different forms of income and expenses
Objectives - Separate household and business cash flow
- Keep records of their income and expenses
- Be able to name and differentiate cost categories
- Be capable to calculate their total costs as well as different cost
5
Theoretical knowledge needs to be related to one’s own context in order to become applicable knowledge.
30
categories per month and per item

- Know how to calculate profit or loss
M2 a) Keeping Business Records

M2 b) How money is coming in and going out in your household and business?
M2 c) Record keeping & Cash flow management
M2 d) True or not true? - Statements on keeping separate records with regard to
household and business cash flow
M2 e) Managing my personal/household and business finances by using a daily
Tools cashbook, weekly money management system and yearly summary sheet
M2 f) Cost categories
M2 g) Know your costs
M2 h) Calculating costs
M2 i) Use records to improve your business
M2 j) Money coming in – money going out
M2 k) Farmer AA's financial challenge
Module 3
Title Setting &achieving goals
This module targets the competences of self-management. Even if an

entrepreneur has a perfect product or service to sell and knows how to do
recordkeeping, financial planning, marketing etc., this is of little help if he/she
Description cannot define clear goals and ways to get there.
Through various exercises the participants learn about the difference of needs and
wants, as well as setting SMART goals. Moreover, they get to know methods to
prioritize tasks and properly manage time to ensure defined goals are reached.
 Needs and wants

 Setting priorities
Topics
 Defining SMART goals
 Time and task management

Learning - Be able to differentiate between needs and wants
Objectives - Be able to set SMART goals
- Be able to improve time and team management
Proposed time 1,5–3 hours
M 3 a) Needs & wants

M3 b) Are all your wants needs? Exercise on identifying needs and wants
Tools M3 c) Prioritizing needs and saving money
M3 d) SMART Goals
M3 e) Why goals should be SMART - Goal-setting exercise
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M3 f) Self-management – Prioritizing tasks

M3 g) Picnic time management
Module 4
Title Introduction to enterprise analysis
This module should give the participants a first idea about business analysis and an
understanding of its importance for running a successful business, planning ahead
and improving. Two instruments of analysis, SWOT analysis and Michael Porter’s
Description
five forces are introduced. The participants should be given time to apply those
new techniques to their business and to discuss the results and possible ways to
react to the results in peer-to-peer formats.
 Introduction to business analysis

Topics  SWOT analysis
 Michael Porter’s five forces

- Understand the importance of business analysis
Learning - Be able to apply a SWOT analysis
Objectives - Understand Michael Porter’s five forces and analyse their business
accordingly
- Know how to draw conclusions from their analysis
Proposed time 1–1,5 hours
Reference: The Bead or Pearl exercise introduced in Module 1 also shows the
importance of analysing business processes. You may recap the takeaways of this
exercise to introduce business analysis.
M4 a) SWOT check it out
M4 b) What challenges are you facing as an entrepreneur?
Tools
M4 c)Self-assessment of my business (5 forces)
Reference: It might be useful to recap analysis of profit/loss and different costs to
create awareness of the different parts of business that may be in the focus of
analysis. The trainer might give a preview of topics that will be addressed later and
that are important to business analysis.
Module 5
Title Introduction to business planning
In this module, the participants get a first idea what business planning is and learn
why it is important. They do not yet start to make any plans themselves but should
Description be prepared and motivated to do it later e.g. together with the coach or in Module
13. They should develop an understanding of how the different modules are
connected and that many of them are also preparatory to business planning.
Topics  Importance of business planning
32
 Types of business plans

 Tips for business planning

Learning - Understand the importance of business planning
Objectives - Know different types of business plans
- Be aware of do’s and don’ts in business planning
Proposed time 0,5–1 hour
Reference: For importance of planning you may refer to Bead or Pearl exercise if
Tools conducted in Module 1, and Picnic exercise of Module 3.
M5 a) Planning for the future
Module 6
Title Financial planning & Banking
In this module, participants learn how to do financial planning and start banking.
Through different examples and exercises, participants are trained to set their
own financial goals and find ways to reach them. In this process, irregular and
regular income and expenses, and budgeting are introduced. Advantages and
disadvantages of different ways of saving money are compared and, at the end, an
Description introduction to the financial sector is given. In order to help participants start
banking, types of financial institutions are introduced and they are guided on how
to open a bank account and make use of different payment options.
This is an important session on its own, but also serves as preparation for decision
and planning of loan taking, which is addressed in module 12.
 Financial Planning
 Setting financial goals
 Ways to reach financial goals
 Budgeting
Topics  Forms of saving
 Introduction to the financial sector
 Types of financial institutions
 Banking
 Payment options

- Be aware of the need for financial planning
- Be able to set their own financial goals and find the best way to reach
them
- Know how to do budgeting
Learning
- Be able to compare different ways of saving
Objectives
- Have an overview of the financial sector accessible to them
- Know about different financial institutions
- Be able to start banking, especially opening a bank account
- Be aware of different payment options and know how to decide which
one to choose depending on the given situation
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M6 a) Financial Planning & Budgeting

M6 b) Saving
M6 c) How SMART are these financial goals?
M6 d) Do you know what a budget is? Exercise on classifying items of income and
expenses
Tools
M6 e) Setting financial goals for yourself, your family and your business
M6 f) My financial sector map
M6 g) Financial Environment
M6 h) What questions should you ask at the bank when opening an account?
M6 i) Scenarios about financial service providers and payment options
Module 7
Title Optional: Business Formalization
Business Formalization can be an important step for the development of

businesses e.g. when they attempt to acquire a loan or get governmental support.
Moreover, the state benefits from higher tax incomes through formalized
businesses. But for SMEs, bureaucracy and taxes may also be a burden to growth.
Description
Therefore, it is crucial for the entrepreneurs to know about different forms of
businesses as well as rights and duties linked to them in order to make a well-
informed decision. This optional module tackles these issues and touches upon
the process of registration.
This module is conceived as an optional one because it may not be relevant for all
participants.
Comments In addition to the general information about registration given by the tool, the
trainer needs to collect and provide accurate information on national business
forms and the tax system, particularities within the sector, the registration process
and relevant institutions etc.
 Forms of businesses and tips for decision

Topics  Rights and duties
 Process of formalization

Learning - Know about different forms of businesses and linked rights and duties
Objectives - Be able to make an informed decision
- Know the process of registering their business
Proposed time 0,5–1 hour
Tools M 7 a) Organization and management
34
Closing Session
Title Closing Session
The closing block is the element that concludes the training session. Participants
are at this point transiting to the first coaching phase. Enough time should be
factored so that the participants are not in a hurry to leave.
It is helpful to round off the training block with a recap of the addressed topics
and activities, preferably done in plenary by the group.
At this point in the SME Loop, the participants are leaving the group setting to go
Description
back to their businesses and work individually with the coaches. Since that step
might be accompanied by some insecurity about what will happen and how, they
need to be clear what they can expect from the coaching phase and how it will be
put in practice. At this occasion, the final assignment could also be introduced, so
that the participants can reflect on ideas and discuss them with their coaches.
Finally, an evaluation of the training content, methods, the performance of the
trainer and the group should be done orally and/or as anonymised questionnaire.

- Have memorised the content of the training block
Learning
- Be prepared for the start of the coaching phase
Objectives
- Have an idea about what the final assignment may look like
- Have evaluated the training block for the programme
Proposed time 30–60 minutes
5.4.2 Modules of the second, modularized training

The second training offers 6 modules to choose from plus an introductory and a closing session.
 Introduction Session
 Module 8: Market & Marketing
 Module 9: Good relations &Communication
 Module 10: Production, purchase & selling
 Module 11: Risk management
 Module 12: Access to finance
 Module 13: Visioning& Planning
 Closing Session
The training materials for each of the modules are available in annexe 3.
Introduction Session
Title Introduction Session
At this stage of the Loop, for the first time participants come back together again
after a two-month phase of individual coaching and maybe even without any
Description contact with one another. This means that trainers should give ample space for
participants to reconnect and exchange on the experiences of the past months
(peer-to-peer learning). This might happen according to a set of guiding questions
that participants discuss in small groups and the results of which they share in
35
plenary e.g.
 What and how did the participants apply what they learned during the first
training block?
 How do participants fell about the coaching experience?
 On which topics they want to continue working on?
 Where do they need to improve?
A question like “what topic or task in relation to your business was challenging or
difficult?” will give trainers (and coaches) orientation in terms of issues to be
treated in the training (and coaching).
This exchange on encouraging and challenging experiences is important for the
entrepreneurs themselves to take stock of their present status quo, thus,
encourage and promote auto-reflexion and learning.
This might also give way to a review of the subjects of the first training.
As a last step the trainers should present the objectives and structure of the
programme for this second training block. At the end of the introductory sessions
rules for cooperation and communication within the group that were set at the
beginning of the first training should be re-developed.

- Recap and learn from their own experiences from the coaching phase
and know about those of the other participants
Learning
- Be motivated to continue working on their weaknesses and learn more
Objectives
- Have an idea what to expect from the training block as well as from the
following steps
- Identify themselves with the rules for a cooperative group atmosphere
Proposed time About 60 minutes
Module 8
Title Market & Marketing
Knowing one’s market and marketing the product(s) accordingly is an essential

success factor. This module addresses the importance and basic concepts of
Description market and marketing, and guides the participants to apply the content to their
own businesses and product(s). The participants are trained to apply the 7 “P’s” of
marketing, to be creative and innovative, and to find their market and strategy.
 Introduction to market research

 Positioning the product
 Marketing mix of 7 “P’s”: Product, Price, Place, Promotion, People, Process,
Topics
Physical evidence
 Creativity and innovation
 Market and market strategies

Learning - Know why and how to do simple market research
Objectives - Be able to improve their marketing according to the 7 “P’s”
- Develop creative and innovative ideas for product and service
36
improvement
- Be knowledgeable in market concepts and strategies and can apply them
to their business
M8 a) Marketing and your business

M 8b) Positioning your product
M8 c) Conduct market research
M8 d) Product
M8 e) Scamper Model
M 8 f) Price
Tools M8 g) Place
M8 h) Promotion
M8 i) People
M8 j) Process
M8 k) Physical evidence
M 8 l) Mini market
M8 m) Match box heroes
Module 9
Title Good relations &Communication
Good relations to all actors that are directly and indirectly involved in the business
are crucial for the success of the business. Therefore, this module addresses ways
to maintain or improve relations and communication with these actors. It stresses
Description
the creation of a positive and productive working atmosphere and gives hints on
how to deal with possible treats to this atmosphere. Lastly, it provides an
introduction to the problem solving cycle and conflict management.
 Managing good relations with supplier, family, community, competitors and

supporting institutions
 Trust and responsibility
 Creating teamwork
Topics
 Motivating employees
 Dealing with troubled employees
 Problem solving cycle
 Solving conflicts

- Understand the importance of a positive public image
- Know why and how to improve their relations to the different actors that
are directly or indirectly linked to business
Learning - Have experienced how trusting and being trusted feels like, and
Objectives acknowledge the so created advantages in business relations
- Improve team working
- Be able to deal with troubled employees and take preventative measures
- Be aware of the need of team work for problem solving and are able to
apply the problem solving cycle
37
- Know how to define, understand and solve conflicts
Reference: To introduce the need of a positive public image, the pictures 1 and 2
of M8 a) may be used/repeated. The pictures can be used as basis for discussion
with participants of all educational levels.
M9 a) Who makes or breaks your business?
M9 b) Trust walk
M9 c) Business relations and productivity
M9 d) Team and Teamwork
M9 e) To be or not to be
Tools
M9 f) Performance appraisal and rewards
M9 g) Managing employee complexities
M9 h) What is a conflict and how to deal with it
M9 i) The onion model
Reference: The exercise M3 f) “Self-management – Prioritizing tasks” also
addresses different viewpoints of the entrepreneur, customer and supplier that
are potentially conflicting. It could also be applied or recapped with the
participants here.
Module 10
Title Purchase, production & selling
Every business needs to purchase items or services, produce something in an

economic way and sell the products with profit. To well manage those processes
you need knowledge, skills and experience. Ignorance of productivity factors, for
Description instance, or mistakes in purchase may damage the business. This module tackles
those important processes, gives information and hints, and lets the participants
actively apply the different topics that are involved in purchase, production and
selling management.
 Purchasing business items and services

 Introduction to stock control
Topics  Managing relationships with suppliers
 Improving productivity
 Selling products in a competitive market

- Know what items they need for their business in what quality and
quantity, and how to get them for the best conditions at the right time
Learning - Deal with their suppliers in a way that is favourable to their business
Objectives - Be aware of productivity factors
- Be able to assess their productivity, find reasons and improve their
productivity
- Develop strategies to sell their products in a competitive market
38
M10 a) Buying well for your business

M10 b) How to control your stock?
M10 c) Managing relationships with your suppliers
M10 d) What is productivity?
Tools M10 e) Influencing productivity
M10 f) Crown
Reference: For this exercise and as conclusion it might be useful to recap what has
been learnt in Module 2 Financial Planning and Costing about costing and in
Module 8 Market & Marketing about price, distribution channels and process.
Module 11
Title Risk management
Risk taking is an important competence of an entrepreneur; however, this does

not mean to blindly ignore risk but to manage risk and respond to it in a suitable
way. Therefore, in this module participants learn about changes of the external
environment and different forms of risk that may affect the household or
Description business. They learn to identify, assess and prioritize risks to which they are
exposed and get to know different response strategies. The fact that
entrepreneurs know about risks does not mean that they reduce risk affinity to
zero, but that they are aware of it and find their way of accepting and responding
to it.
 Changes in the external environment

 Identifying, assessing and prioritizing risk
Topics
 Risk management strategies
 Risk taking as an entrepreneurial competence

- Be aware of different forms of possible risks for their household and
business
Learning
- Be able to identify, assess and prioritize risks relevant to their activities
Objectives
- Find suitable risk management strategies
- Have experienced that moderate risk taking is important for
entrepreneurial success
M13a) Forecasting changes in the external environment

M11 b) Managing risk
M11 c) Risk management
Tools
M11 d) How to protect yourself, your family and your business against
emergencies?
M11 e) Dart
39
Module 12
Title Access to finance
For this module, it is not necessary that each participant tries to get a loan but
that they should be able to make a well-informed decision about taking a loan.
They need to know opportunities and risks, options and costs, rights and
responsibilities that are linked to it. After a theoretical turn, participants apply the
newly learnt matter in different exercises; “real” exchange with financial
Description institutions should also happen within this session. Staff of financial institutions
may be invited to the training venue, or participants may visit financial
institutions. Bank staffs elaborate on their services, products and conditions and
may engage with participants in a question and answer discussion.
This exchange may also be used to discuss financial needs of SMEs with the
financial service providers.
 Reasons and risks of borrowing

 Comparing types and conditions of loans
 Costs of loans
 Calculation of loan interest rates (flat rate and reduced balance method)
Topics  Rights &responsibilities of bank and customer
 Consequences when obligations are not met
 Qualification for loan
 Well-informed decision-making on taking up a loan
 Loan management

- Be aware of the risks and opportunities when borrowing
- Know the different loan types and conditions
- Take into consideration the different costs of loan and calculate the
interest rate
Learning
- Be aware of the consequences when failing to meet their obligations
Objectives
towards a financial institution
- Know about rights and responsibilities of banks and themselves as
customers
- Know how to qualify for a loan and how to manage it well
- Make informed decision on taking up a loan
M 12 a) Borrowing (Loan)
M12 b) True or not true? - Statements on borrowing, debt and loans
M12 c) Am I eligible for a loan? Which loan products do you have and which ones
Tools would fit best for me?
M12 d) Financial consumer rights & responsibilities
M12 e) Handouts on loan taking
M12 f) What-if... scenarios
M12 g) Make a loan access plan
40
Module 13
Title Visioning & Planning
This module is a very important one as it may serve different purposes:

 Looking back and closing the training blocks by bringing the puzzle of
learned topics together,
 Tying the subjects together by looking into the future and formulating a
vision or plan,
 Obtaining the required skills for establishing business plans needed for
finalising business ideas and preparing participants for their assignment.
Before starting with the main topics, participants should discuss and recap
through individual, pair or group exercises what they have learned during the two
training blocks, how the topics are interconnected and, what and how they can
apply this in their business (and personal) future. Allow answers to be very
Description
individual, as it is about what the required knowledge, skills and new ideas mean
to them personally. This brings all learned topics together and introduces them to
the final module Visioning & Planning where skills and attitudes acquired in
previous modules are of great use. Depending on the capacity level and needs of
the participants, this may involve developing the basis of a vision and a simple or
more complex action plan up to a full business plan. It is not necessary to have a
detailed vision or business plan at the end of the session but to know how to finish
it and be motivated to do it is what the trainer ought to aspire. This allows for a
fluent transition to the coaching phase where vision and business plan can be
developed in more detail and which may also be part of the final assignment the
entrepreneur has to hand in before graduation ceremony. Individual assignment
tasks might already be discussed here with each participant.
 What have I learnt and what does it mean to me

 What is my vision
Topics
 Steps to achieve my vision
 Business planning

- Have a full picture of what they have learnt and how they can use the
Learning new knowledge, skills and ideas
Objectives - Develop (the basis of) a vision for their business and life
- Have an idea about the main steps to achieve their vision
- Know how to make more complex business plans
M 13 a) “I am going to retire”
M13 b) Making plans
M13 c) Action plan
Tools Reference: To make the need for planning more real and motivate participants,
remind the participants of their experiences in exercises where planning and
estimates played a role, like Bead or Pearl exercise in module 1.
Reference: Aspects of the module 5Introduction for Business Planning can be
repeated or recapped. It might also be useful to recap elements from related
41
topics addressed by other modules like goal setting, self-management, financial

management and planning, marketing risk management etc.
Closing Session
Title Closing Session
The closing block is the element that concludes the training session. Participants
are at this point transiting to the second coaching phase. Enough time should be
factored so that the participants are not in a hurry to leave.
As there had already been a recap of the training blocks in module 13, this will not
be necessary here6. Else, the (basis for a) vision and/or business plan may serve as
a starting point for the review of the two training blocks and outlook to the second
coaching phase.
Description In this closing session, the trainers introduce the next steps i.e. start of coaching
phase two and the graduation ceremony, which also means that participants
should have the opportunity to ask questions and leave the training with utmost
clarity about what comes up.
The session will end with an evaluation of the training content, the employed
methods, the performance of trainers and the group with regards to this last
training block. Various rapid and/or oral feedback methods exist and the trainers
are free to use whichever seems appropriate. However, the use of an anonymised
questionnaire is obligatory as final activity.

Learning - Have evaluated the training block of the programme
Objectives - Be prepared for the start of the coaching phase
- Know their exact assignment task(s)
Proposed time 30–45 minutes
5.5 Graduation ceremony

After a long journey, it is time to celebrate the successes. The entrepreneurs have spent about six
months of their precious time to listen, discuss, sweat, argue, try out, adapt, and hopefully succeed
in integrating some aspects they have experienced into their business. Hopefully, first results are
already visible. The graduation ceremony is meant to recognize these achievements by handing out
the certificates of success in an official ceremony with representatives from the programme,
strategic partners of the Loop, service providers, and of course the participants.
The ceremony shall provide room for exchange between the participants including a slot for a self-
evaluation of the Loop participants: Where do I stand now? Which are the strengths that I have
developed and on which I can build my enterprise? What are the weaknesses for which I need to
(still) find solutions or improve my competencies?
6
If in module 13 the recap was not done it should nevertheless be done at this point.
42
6 Measure, learn and share
At the same time, the ceremony marks the official end of the cycle and hence the end of the
continuous support from the programme. It shall therefore allow for an evaluation with regard to the
achievement of set programme objectives for the Loop.
We propose to plan for a one-day event (6 hours) for the ceremony. The ceremony might be
structured as follows:
1. Introduction
- Opening words (political partner and/or strategic partners)
- Presentation of objectives and programme
- Looking back on the Loop journey travelled together for the last six months
2. Structured exchange of experiences
- Peer-to-peer (participants, coaches, trainers)
- Self-evaluation of the participants
- Testimonials from participants
3. Evaluation of the Loop cycle
4. Time for discussing future networking, staying connected
5. Time for talk of participants, trainer, coach, GIZ staff etc.
6. Graduation ceremony: Handing over of certificates
7. Official closing remarks (GIZ programme, partner)
In between or after the closing remarks, you may want to offer lunch, a snack, or any other form of
restauration.

6.1 Measure
When you defined your Loop (chapter 3), you set a series of objectives you want to achieve when
applying the SME Loop. The achievement of these objectives needs to be measured in order to be
able to see if the Loop is appropriate in reaching the goals defined for the SME Loop and hence for
the overall programme.
 The objectives for your SME Loop defined in chapter 3 determine what needs to be monitored.
43
 The boundaries you defined in chapter 3 with regard to target group, targeted value chains or
economic sectors, geographical coverage, number of participants, etc. will help you to set up
the monitoring for the SME Loop.
 The assessment of the enterprises that is described in chapter 5.1 provides tools and
templates that can be utilized (in an adapted form) for the monitoring exercises. By any
means, we strongly recommend to link the assessment and the monitoring to the largest
possible extent to ease your work and to make the gathered information and data comparable.
It might be necessary to add some monitoring elements to touch overarching aspects of your
Loop that are not addressed by the assessment forms.
 The setting up of the monitoring of the Loop shall be done when setting up the Loop (chapter
4 “Let’s get started”).Delaying this process often leads to non-systematic and incomplete
monitoring.
 The gathering of monitoring data seems to be most appropriate after the end of each coaching
phase. This can be (at least) partly done by the coaches and the results integrated into the
reporting of the coaches to their respective service providers. This, of course, needs to be
considered when determining the scope of the coach’s work.
 The final evaluation of each Loop cycle should be done by independent persons to avoid a
biased and maybe too positive assessment of the results.
 A performance assessment of trainers, coaches and service providers allow deciding on the
termination or prolongation and maybe even enlargement of contracts. It is certainly
favourable when service providers may do more than one group in each Loop cycle. This would
reduce the administrative workload, assure the required performance quality and may lead to
a scaling up of the SME Loop.
Some examples on how to monitor the implementation of the SME Loop are given in annexe 4.
6.1.1 Loop monitoring as integral part of the programme monitoring system

We propose that the monitoring of the SME Loop shall be in line with and integrated into the overall
monitoring of your programme. A specific monitoring system for the SME Loop may only make sense
if the SME Loop were a stand-alone project or if it were run on a large scale and contracted to a
consulting firm.
Otherwise, it is recommended that the M&E Officer of the programme will be part of the process to
define and set up the Loop. This particularly includes the elaboration of the tools and templates for
the assessment, the business profiles, the data gathering and the reporting. Depending on what is in
existence in the first place, the templates, formats, and monitoring methods shall be adapted to the
existing ones in order to avoid duplication of work or contradiction of data. The enterprise
assessments may provide important information that can serve as baseline for other parts of the
programme as well. Likewise, you may consider adding some aspects to the enterprise assessments
that might not be very significant for the SME Loop but can be used as basis for other indicators.
For the “Green Innovation Centres for the Agriculture and Food Sector” we recommend to contact
the M&E Coordinator in the global steering unit in Bonn to see how the monitoring of the Loop can
be best linked to the overall monitoring system and tools.
44
6.2 Learn
In addition to steering, the results of monitoring shall feed a learning process that should take place
at different levels:
 Firstly, learning shall take place at the level of the participants. Monitoring information shall be
fed back to the participants so that they see if and where they make progress and where they
need to increase the efforts to meet the individual objectives. Additionally, during peer-to-
peer events, the participants exchange about their experience, failures and achievements. By
doing so, they can motivate and inspire others with new ideas and objectives. Trainers,
coaches and service providers that participate in these exchange events also gain insights
about successful experience and can integrate this in their respective work.
 Secondly, the programme shall regularly invite service providers, trainers and coaches to
reflect about the implementation of running Loop cycles. It shall help to adjust if necessary
during the current process but also allows for discussion about improvements for the
forthcoming cycle or your Loop approach in general. This might include aspects like refining
the boundaries of the Loop, changing the modes of delivery, adapting the implementation
process, reshaping templates and formats for monitoring, etc.
 Thirdly, learning needs to take place within the programme as well. It is the programme who
has the overall responsibility for the Loop and takes strategic decisions together with its main
partners with regard to the Loop design, its continuation, scaling up, institutionalization or
termination. Monitoring information and the analysis of the monitoring data shall provide
information that is relevant for this steering process of the SME Loop.
 Next to this, learning from the Loop supports the steering of the overall programme as well.
The interdependence between the Loop and other interventions of the programme may lead
to adjustments of the Loop design and its implementation or contribute to adjustments of
other programme interventions.
Lastly, we want to learn as well. Since the SME Loop, especially in the here recommended,
standardized form, is still in its infancy. The handbook is so far based on the experience in two
countries. In order to continuously improve the quality of the handbook, we kindly invite everybody
who has gained experience in using the handbook to send these insights to us so that we can
incorporate them into the document. Please send your comments to ralf.barthelmes@giz.de.
6.3 Share
Do good and speak about it.
Sometimes we are too modest to show what we have achieved. If you are convinced that the SME
Loop has proven to be a value to business women and men, then you shall be proud of it. Share it
with you colleagues, share it with your partners, share it with GIZ, and with the grand public.
The Loop offers you all necessary information. The business profiles, for example, may serve as
testimony for successful business development. The assessment form and the monitoring data
provide what is needed to showcase figures. Peer-to-peer learning formats can be used to make
videos about successful ideas and business models that can be shared in various forms.
Within the community of the Green Innovation Centres for the Agriculture and Food Sector or in the
various sector networks you will certainly find interested people that think about using the SME Loop
themselves.
45
But you do not even need to look so far to find the persons eager to listen to your experience.
Integrate your knowledge and your experience into the programme meetings. Make presentation for
partners and donor working groups to integrate the experience of the SME Loop into the national
and/or sectorial policy dialogue.
So here we start. Have a look at some of the entrepreneurs that have completed the SME Loop:
Mohamed S. Banya
Agroprocessor
Kailahun Town
Kailahun District
Sierra Leone
“Before now my business records were scanty.
After the business training I can boast of well
organized and detailed book keeping such as cash,
inventory and credit books. With these records of
business transactions and my operations, I’m now
in negotiations with one of the community banks
for a credit facility…”
MagdeleneLebbie
Restaurant owner
Koidu City
Kono District
Sierra Leone
“Before giz support, I used to waste a lot of

money because I did not know
how to keep proper records
so I was expending more money
than necessary… now I can keep
track of what goes out and
what comes in…I can
manage my finances in
a better way”
46
Appendix
Appendix
Attached to this document are further materials that shall help you to implement the SME Business
Training and Coaching Loop. Since the handbook in itself is already quite large we decided to provide
links to these materials.
Annexe 1: The Coaching guide
Annexe 2: Materials for the first training
Annexe 3: Materials for the second training
Annexe 4: Templates and further readings
 Annexe 4-1 Structure of SME Loop timing

 Annexe 4-2 Time requirements for defining and planning your SME Loop in Benin and Sierra
Leone
 Annexe 4-3 Assessment tool of MSME and their entrepreneurial capacities
 Annexe 4-4 Outil d’évaluation des capacités entrepreneuriales Benin
 Annexe 4-5 Entrepreneurial Characteristics Assessment Form
 Annexe 4-6 Training Needs Assessment Form Sierra Leone
 Annexe 4-7 Peer-To-Peer Learning Approaches
 Annexe 4-8 Coaching Session Report
 Annexe 4-9 Coaching - Personal Development Plan
 Annexe 4-10 Monitoring sheet Sierra Leone
 Annexe 4-11 Tableau de bord de suivi de l'entrepreneur Benin
47

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Handbook on the “SME Business

Training and Coaching Loop“

GIZ is responsible for the content of this publication.

CEFE Competency Based Economies Formation of Enterprise

EMPRETEC Spanish acronym for emprendedores (entrepreneurs) y tecnologia (technology),

EPP Employment Promotion Programme (GIZ)

GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH

ICT Information and communications technology

ILO International Labour Office

M&E Monitoring and Evaluation

MoU Memorandum of Understanding

MSME Micro, small and medium enterprises

SIYB Start and improve your business

SME Small and medium sized enterprises

UNCTAD United Nations Conference on Trade and Development

1.1 History of the SME Loop

1.2 About this handbook

1.3 How to use this handbook

2 The SME Loop Approach

Figure 1: Synopsis of the SME Business Training and Coaching Loop

Assessment & Selection

First Training (3 days)

Coaching Phase 1 (2 coaching sessions per month for 2 months)

Second Training (3 days)

Coaching Phase 2 (3 coaching sessions per month for 3 months)

Graduation Ceremony (1 day)

Coaching Phase 3 (4 vouchers for 4 additional coaching sessions)

3 Define your SME Loop

3.1 Setting the boundaries

3.2 Define the objective and target group

 Higher employment rates per enterprise

Possible criteria for the selection of the target group:

A programme-related maximum target number, the targeting intervention area (nationwide,

3.3 Cooperation with service providers and other partners

3.4 Human Resources required!

3.5 Costs to consider

 Not to pay any sitting allowances.

4 Let’s get started

4.2 Selection of service providers

At this point in time, you have to make a strategic decision.

4.3 Selection of trainers and coaches

SME Loop Trainer SME Loop Coach

attentive listening, asking solution-oriented

4.4 Capacity development for service provider, trainers and coaches

The introductory session could look like as follows:

Processual Capacity Development for service providers

4.5 Get in contact with financial institutions

4.6 Identification and pre-selection of entrepreneurs

Information and identification of potential participants

The disseminated information may include the following elements:

4.7 Time planning for setting up your SME Loop

5 SME Loop Implementation step by step

5.1 Assessment and selection of entrepreneurs

The assessment combines different functions:

Another option may be a self-evaluation done by the entrepreneur. Nevertheless, to avoid or

Who is responsible for the selection?

5.2 The trainings – Structure and methodology

Suggested modules for the first training (3 days):

Peer-to-Peer Learning needs structure!

In the framework of the trainings:

Bringing together entrepreneurs and financial institutions

 Without the finance stakeholders: An additional reflection on the conclusions and

Suggested modules for the second training (3 days):