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INTERNATIONAL UNION FOR CONSERVATION OF NATURE

THE TIME FOR BIODIVERSITY BUSINESS: A GUIDE TO ENTERPRISE DEVELOPMENT FOR CONSERVATION ORGANISATIONS Compiled by: K. Faccer IUCN Business and Biodiversity Programme June 2009

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TABLE OF CONTENTS

• BIODIVERSITY BUSINESS DEVELOPMENT IN BRIEF • KEY OPPORTUNITIES AND CHALLENGES • BIODIVERSITY BUSINESS SUCCESS FACTORS • TYPES OF BIODIVERSITY BUSINESS • A CHECKLIST OF KEY STEPS TO ENTERPRISE

DEVELOPMENT Identify targets and determine objectives Product and market assessment Analyse value chain and market niche Outline value proposition and market strategy Develop financial and partnership strategies Operationalise plans and monitor performance

• TOP 20 ENTERPRISE DEVELOPMENT RESOURCES

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BIODIVERSITY BUSINESS DEVELOPMENT IN BRIEF

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ENTERPRISE DEVELOPMENT FOR CONSERVATION ORGANISATIONS

• The process of Enterprise Development includes a range of activities aimed at the establishment, growth, improved efficiency and competitiveness of enterprises within market contexts.

• This package looks at the role of conservation organisations as service providers and facilitators in the process of small enterprise development. Key aspects of this role include support to :

– Leverage real and meaningful change in the enabling environment – Enterprise development coordination – Strategic input to (risk) management strategies, product design, innovation – Identifying and facilitating in-house or external technical and business

development expertise and brokering strategic partnerships • While the focus of this package is mainly on established, sector-based

biodiversity goods and services, it includes principles and strategies applicable to biodiversity businesses more broadly.

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SMALL ENTERPRISES IN A CONSERVATION CONTEXT

• Make up 80-90% of enterprises and 50% of employment in forestry sector • More than this (<95%) in tourism sector • Strong presence in natural product and ecotourism sectors but also

others...eco-agriculture, sustainable forestry, sustainable fisheries & aquaculture, ecosystem services and more

• A positive vehicle for the promotion of local resource management and knowledge systems

• Increase the visibility and value of biodiversity • Notable potential to influence market standards, systems and benefits

A biodiversity business is a commercial enterprise that generates profit and equitable benefits through biodiversity conservation and sustainable use activities

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THE ECONOMIC OPPORTUNITY

• Biodiversity conservation and ecosystem health can contribute directly to business profitability (e.g. ecotourism, payments for watershed protection)

• Growing consumer preference for sustainable and ethical products and services is creating more and higher return opportunities for biodiversity businesses (e.g. certification & standards)

• Globalization has increased the reach and flow of small business products and services to previously inaccessible markets and consumers (e.g. virtual marketing)

• New and specialised markets which create incentives and opportunities for small business innovation and investment (e.g. among venture capital firms)

• Local role in economy and among labour force enhance capacity to contribute to local economic development, poverty reduction and livelihood diversification

• Increased market access through changing trade regimes, lower taxes on products and fewer regulatory barriers to international markets

• Lower risks, improved savings and competitiveness through new business models, improved supply chains and value addition opportunities

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NEW MARKETS AND BENEFITS FOR DEVELOPMENT

Adapted from : ADB 2004

Increased interest for goods and services from biodiversity and producers at the Base of the Pyramid (BOP)

Opportunities to improve benefits and sustainability from niche markets at top as well as across emerging and pro-poor markets

Presenter

Presentation Notes

In recent years, much attention has been given to the number of people living and working in less developed countries, and their relative, and increasing, influence on global markets. Lesser developed countries can generally be divided into emerging economies (e.g. South Africa, Brazil) and those with a significant number of poor, also known as “the Next Billion” or those from the “Base of the Pyramid” (BOP). Together, there are almost 6 billion people in these markets, with the most significant proportion made up of the 4 billion, mostly poor, people at the base of the economic pyramid worldwide. As a result, the BOP and Emerging markets are increasingly being seen as opportunities for small business investment, innovation and development (e.g. See www.new-ventures.org). New Beneficiaries and New Consumers To date, much of the interest has focused on the BOP as a potential market for goods and services. However, the concept is equally applicable to notion of lesser developed countries as sources for biodiversity goods and services. Already, there is increased interest for sustainable and ethical products which target benefits that accrue to less economically developed areas (e.g. FairTrade). There is also a move to look more closely at the needs and opportunities to generate benefits to lesser developed countries from consumption and innovation within their home countries or elsewhere. In each of these areas, there is a great need for further development to assist with the capacity, policy and market constraints for the improvement of equitable benefit sharing and biodiversity management. See www.markets4poor.org for more information

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FINANCING BIODIVERSITY BUSINESS

• Enterprise development activities have been a major area of donor intervention for over a decade and considerable effort has gone into improving the sustainability and effectiveness of interventions

• However, many organisations still struggle to locate and access funding • Many factors affect the ability to secure funding for enterprise

development including availability, general fundraising capacity and specific experience with business planning and perceived mismatch between profit and social or environmental benefit

• As a result biodiversity business development financing may need to pursue a mix of grant funding and commercial financing as the business develops and becomes more profitable. New opportunities may be emerging through the increasing visibility and establishment of biodiversity-oriented financial services agencies.

• Also, innovative financing strategies, including linking with or creating private sector entities, intellectual property arrangements, profits from premium and other incentive schemes have contributed valuable resources to such enterprises

Presenter

Presentation Notes

The Committee of Donor Agencies for Small Enterprise Development has a website which provides a forum for organisations and individuals involved in enterprise development, mainly in developing countries. The website includes valuable information as well as links to key tools and other relevant sites to this field. See http://www.enterprise-development.org/ See www.iucn.org/dbtw-wpd/edocs/2008-002.pdf for a more detailed discussion on financing biodiversity businesses and a selection of relevant institutions working in this area.

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KEY OPPORTUNITIES AND CHALLENGES

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POSITIVE CHARACTERISTICS OF SMALL BUSINESSES

• Are labour-intensive and providing more important employment opportunities especially for low-skilled workers

• Tend to have greater income distribution equality across lower income groups

• Are an important part of the supply chain for large multinational corporations

• Are necessary for agriculture-dependent nations transitioning to an industrial- and service-oriented economy

• Are excellent "beta-sites" for innovation and sustainable initiatives due to their inherent flexibility and risk-taking ability

• Provide all of these crucial benefits in developing countries despite their relatively smaller presence

• Demonstrate a vested interest in community development

Source: WRI, 2006

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SME CHALLENGES AND MARKET FAILURES Adapted from: WRI, 2006 and IUCN, 2009

• High levels of informality and bureaucracy hinder presence in emerging economies

• Low capacity makes compliance difficult • Lack of available finance stifles growth

and entrepreneurship • Insufficient incentives for value addition • Price distortions which encourage

unsustainable production and trade

There is a substantial gap between the size of the SME sector in developing and developed countries, highlighting a gap of opportunity and need for support for small enterprises to emerge

Presenter

Presentation Notes

World Resources Institute, 2006. The Role of Small- and Medium-Sized Enterprises in the Futures of Emerging Economies. IUCN, 2009. Markets & Incentives in LLS: Using economic and financial tools to sustain forest livelihoods and landscapes.

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AN OVERVIEW OF COMMON CHALLENGES

• Businesses are faced with increasingly demanding global markets, especially in terms of quality and other product and service standards which may not be known, are difficult to match, or require expensive inputs

• Limited access to market information, experience and business capacity hinders competitiveness and market responsiveness

• Small biodiversity businesses may be subject to less immediate returns and favourable risk scenarios for investment due to lesser known markets, lower margins and lack of experience

• Lack of credit to finance advancements in technology and infrastructure • Disorganised and inefficient supply chains can limit benefit capture at bottom

of chain and result in higher returns by intermediaries and larger firms • Regulatory or other constraints which distort market dynamics and pricing • Challenges to produce sufficient flows/volumes of goods and service

sustainably • Capital asset and business acumen deficiencies translate to limited

bargaining power

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CRITICAL SUCCESS FACTORS (Adapted from IISD, 2008) 1. Leadership : The commitment and continuity of enterprise leadership

and coordination 2. Partnerships: The ability to negotiate and maintain a core set of

relationships for the benefit of the enterprise and benefit sharing 3. Proof and clarity of innovative concept and demonstration of market

potential 4. Business planning and marketing skills 5. Triple bottom line planning 6. Short and long term incentives and management of stakeholder benefits 7. Successful long term community and stakeholder engagement 8. Risk management: Demonstrated planning for mitigation of risks and externalities helps ensure long term functioning of the enterprise

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TYPES OF BIODIVERSITY BUSINESSES

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BIODIVERSITY BUSINESS TYPES

The focus of most biodiversity businesses is on the generation of benefits through trade in biodiversity goods and services and risk mitigation. Different service or activity oriented business types can work independently or as complements in a landscape to promote biodiversity conservation.

Source: www.ecoagriculture.org

Presenter

Presentation Notes

The next few slides draw heavily on “Building Biodiversity Business” by Bishop et. Al 2008 for an overview of different biodiversity business types and their opportunities. For a more complete review, find this publication on www.iucn.org/dbtw-wpd/edocs/2008-002.pdf

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SUSTAINABLE AGRICULTURE

Features and Opportunities • The creation and protection of biodiversity

areas in and around farms • Sustainable crop production methods,

including organic products and biofuels • Apiculture and sustainable livestock production

• Consistent and rapid growth in global markets

for organic and sustainable food products • E.g. Organic food sales valued at

approximately 20 billion in the US alone (2007) with an average 18% annual growth to at least 2010

• Opportunity for responsible biofuel production

US Organic Demand ‘98-’06

Green, eco- or sustainable agriculture seeks to improve the benefits of agricultural production by reducing threats to and enhancing benefits to biodiversity through production through improved management, practise or technology.

Presenter

Presentation Notes

See: www.ecoagriculture.org and www.landscapemeasures.org for more information and tools Market figures shown are taken from IFOAM’s World of Organic Agriculture: Statistics and Emerging Trends 2008 (www.intracen.org/organics/publications.htm) For more on responsible biofuel production, See http://cmsdata.iucn.org/downloads/biofuels_fact_sheet_wcc_30_sep_web.pdf

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SUSTAINABLE FORESTRY

Features and Opportunities • Sustainable timber and non-timber forest product (NTFP) production • Wood processing; seed collection; fuelwood and charcoal production

• Enhanced livelihoods through Joint Forestry Management, Community

Forestry and Agroforestry • Voluntary mechanism and agreements for improved legality and

transparency • Strong global demand and systems for management through certification

and standard systems (e.g. FSC) • Improved processing technology for wood products for improved

efficiency

Sustainable forestry refers to the production of timber and other forest products within a broader system of biodiversity conservation and natural resource management

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NATURAL PRODUCTS

Features and Opportunities • Provide critical safety nets and opportunities

for livelihood diversification amongst the most vulnerable

• Are well adapted to local conditions and require few inputs to maintain

• Are accessible and known to community members offering a competitive advantage in production

• Well-suited to and increased niche market opportunities for ethical and sustainable products

• A major global growth industry with a value of USD 7-10 billion for top 110 products and USD 110 billion for medicines and cosmetics

Wild plant and organic supply ’98-’06

Natural products are plant products also known as non-timber or non-wood forest products (NTFPs and NWFPs). They are both wild harvested and cultivated plants and plant parts used for food, medicinal, utilitarian and other applications.

Presenter

Presentation Notes

Figure from IFOAM’s World of Organic Agriculture: Statistics and Emerging Trends 2008 (www.intracen.org/organics/publications.htm)

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SUSTAINABLE FISHERIES

Features and Opportunities • Aquaculture, Marine and Freshwater Commercial and Recreational Fisheries • Sustainable fish, crustacean and mollusc farming and harvesting • Seaweed harvesting, community fisheries • Organic fish farming and sustainable harvesting programs

• Growth of Marine Stewardship Council (MSC) seafood certification system • Wide ranging marketing and awareness initiatives by conservation

organisations (e.g. WWF Sustainable Seafood Guide) • Voluntary standards and industry codes of practise (e.g. FAO Code of

Conduct) • Improved techniques for harvesting, including for the marine aquarium trade

Sustainable Fisheries are based on the use of environmentally-friendly practises which promote biodiversity conservation, ecosystem integrity and the long-term health of the industry.

Presenter

Presentation Notes

See www.msc.org for more information about the Marine Stewardship Council, www.ifc.org for Marine Aquarium Market Transformation Initiative and www.wwf.org for information on their Market and Marine Programmes.

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ECOTOURISM

Features and Opportunities • Ecotourism products and services are found across tourism supply chain

from flight and accommodation providers to tour operators and restaurants

• Recreational activities such as nature-viewing, hunting, fishing, scuba diving or snorkelling etc.

• Global examples of best practise for tourism relevant community-based natural resource management schemes (e.g. The CAMPFIRE Program)

• A principal earner of foreign exchange among the poorest nations • “The fastest growing sector of the largest industry on earth”, with annual

exports up to US$100 billion and growing three times faster than other segments of the tourism sector (www.world-tourism.org, www.ecotourism.org)

Ecotourism is known as responsible travel to natural areas which contributes to biodiversity conservation and local livelihoods.

Presenter

Presentation Notes

See the International Ecotourism Society at www.ties.org for more ecotourism facts and statistics and Rainforest Alliance at www.rainforest-alliance.org for their ecotourism development toolkit.

http://www.world-tourism.org/

http://www.ecotourism.org/

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ECOSYSTEM SERVICES

Features and Opportunities • Plant pollination, erosion control, carbon sequestration and conservation of

habitat for wild species • Watershed services (e.g. filtration, regulation, and provision)

• Opportunities for public-private sector partnerships • Can lead to improved land tenure and benefits for upper watershed

communities • Building markets through enhanced awareness, improved demand • Identifying a diverse and flexible range of well defined ecosystem service

commodities • Integrating ecosystem service schemes with existing natural resource

management and poverty reduction strategies

Ecosystem services are the natural processes of ecosystems and the associated biodiversity which provide benefits (provisioning, regulating, supporting, or cultural services) to humankind. Payments for Ecosystem Services (PES) generate profits through ‘sales’ of the management and maintenance of these services.

Presenter

Presentation Notes

The Millennium Ecosystem Assessment is credited with bringing the concept of ecosystem services to the mainstream and putting an economic value to these services. See www.millenniumassessment.org for more details.

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BIODIVERSITY OFFSETS

Features and Opportunities • Trade for offsets of similar size, biodiversity value and structure • Can be one-off, legally mandated, or voluntary measures • International examples in wetland mitigation and conservation banking,

etc.

• Can be now or in the future – Biodiversity banking provides offsets in advance of development

• Provides a means to generate direct biodiversity benefit from development projects

• Can support policy makers in balancing economic and conservation objectives

Biodiversity offsets are conservation activities used to compensate for the residual, unavoidable harm to biodiversity caused by economic development projects.

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BIOPROSPECTING

Features and Opportunities • High sampling and research intensity, low development rates • Includes investigation for novel products for pharmaceuticals, cosmetics,

industrial and other uses • Can occur in all natural areas, not necessarily linked to biodiversity rich

areas • Large but disputed industry size (in the tens or hundreds of millions USD)

• Improved screening technologies to identify higher value natural products • Improved intellectual property and benefit sharing arrangements with

local stakeholders • Development of bioprospecting monitoring systems and country level

trade and research capacities

Bioprospecting is the systematic search for genes, compounds, designs and organisms that might have a potential economic use and lead to a product development.

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A CHECKLIST OF THE KEY STEPS TO ENTERPRISE DEVELOPMENT

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DEVELOPMENT CHECKLIST

Identify targets and determine objectives

Product and market assessment

Analyse value chain and market niche

Outline value proposition and market strategy

Develop financial and partnership strategies

Operationalise Plans and Monitor Performance

Presenter

Presentation Notes

This checklist identifies key aspects for consideration in the development of a biodiversity business. Here, they are presented in different steps to focus on the needs and methodologies available for each critical area of development. The ordering, detail and methods used may be changed according to specific circumstances. Note that although the focus or approach of different enterprise development tools can be rather different, most will use a similar process of moving from preliminary assessment and more thorough and detailed analysis to enterprise planning and action. Thus one may use a single tool from beginning to end of the process. Here we identify the tools with the greatest strengths in each particular stage of this checklist.

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1. IDENTIFY TARGETS AND DETERMINE OBJECTIVES

What this should include: • Realistic consideration of potential impact of enterprise development

activities • Identification of conservation and sustainable use targets including

threats and opportunities • An understanding of the local livelihood context, beneficiaries and their

economic goals • Participatory definition of goals and decision-making processes • Identification of champions • Establishment of a committed stakeholder group to move process forward

Agreed targets and objectives which lay the foundation for enterprise development planning, future decision-making and problem-solving

Aim: to define and focus the expected social, economic and environmental benefits of the enterprise

Presenter

Presentation Notes

As in the case with any other initiative, the outset of planning must begin with a stage of setting and sharing objectives and expectations. This is particularly important when dealing with a broad base of stakeholders and communities that will be critical to the long term sustainability of the business. During each stage it is important to document and detail decision points and here, discuss different expectations and resources available for biodiversity business development.

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1. IDENTIFY TARGETS AND DETERMINE OBJECTIVES

Issues this can help address: • Understanding and ownership of process by key stakeholders • Establishment of trust, transparent communication and problem-solving • Development of incentives for participation and cooperation

How this can be achieved: • Poverty and Livelihoods Assessments; Wealth Ranking; Poverty Toolkit • Participatory Appraisal and Site Selection; Conservation and Threat

Assessment • Participatory Learning; Gender-based stakeholder engagement methods

Top Tools International Institute for Environment and Development (IIED) – Power Tools

Series Centre for International Forestry Research (CIFOR) – Guide to Participatory

Tools for Forest Communities

Presenter

Presentation Notes

The focus of this stage is the development of a shared vision by stakeholders and understand the motivation of different participants. There are countless ways in which participatory goal setting can be approached. Participatory planning and learning methodologies are generally well known to practitioners and can be found all over the web. Possible questions for this stage include: The specific site(s) of interest Major stakeholders in the process and targeted beneficiaries Motivations and expectations of role players Specific development, conservation or other objectives Roles and responsibilities Process to be followed

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2. PRODUCT AND MARKET ASSESSMENT

What this should include: • Systematic review of biodiversity goods and services in target area • Inventory of goods and services for potential commercialisation • Evaluation of potential opportunities against enterprise objectives • Investigation of existing market dynamics, product characteristics and

access • Identification of fundamental gaps and constraints to development • Definition and application of selection criteria to eliminate non-viable

options • A mechanism to refine list and prioritise products for further analysis

The product and market assessment provides a thorough and multi-faceted appraisal of the setting in which the enterprise seeks to operate Aim: to understand existing strengths and weaknesses and resources available for enterprise development

Presenter

Presentation Notes

In this stage, work begins with a thorough inventory of the setting in which the enterprise seeks to operate. A major emphasis of this is the development of a strong understanding of the socio-economic and environmental conditions in the area of concern, the potential stakeholders and market forces and players that could play a role in planning the potential enterprise through a broad stakeholder survey. It also helps to eliminate products that will not meet the objectives of the stakeholder or form the basis of a viable, sustainable and marketable enterprise (e.g. sales of endangered species, or products too far to access). This extends not only to potential product (both new and existing), but also the necessary inputs to bring this product to market, issues with sustainability or seasonality of product harvesting, pricing or regulation. It is an exploratory phase intended to narrow down opportunities for further exploration based on a systematic review of both promising aspects for development, as well as critical barriers to success.

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2. PRODUCT AND MARKET ASSESSMENT

Issues this can help address: • Recognition of ‘deal breakers’ and factors outside the influence of the

enterprise • Unrealistic expectations or misplaced investment on the part of stakeholders • Early insight into local knowledge, priorities and potential trade offs • Identification of potential synergies with other products or chains and

opportunities for livelihood diversification or enhancement

How this can be achieved • Resource survey, Species distribution lists, Seasonal Calendars • Market, Ecological, Socio-Economic and Technological Criteria Ranking • Product Selection Matrix, Scoring Sheet, Pairwise Ranking

Top Tools FAO – Market Analysis and Development (MA&D): Phase I UNDP – Local Business for Global Biodiversity Conservation

Presenter

Presentation Notes

Central to the assessment is a systematic and participatory review of the physical or natural environment (i.e. Resources or opportunities) and existing markets. �Possible questions for this stage include: What existing products or services are in demand or use? What other products and service opportunities are in the area? What are the factors affecting their current trade or potential development? Rules, regulations or other potential constraints? Capacity, technology and costs to produce or participate? Seasonality, supply, distance, sustainability? What are the products and services with the greatest potential (fewest constraints)?

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3. ANALYSE VALUE CHAIN AND MARKET NICHE

What this should include: • Value chain mapping to document the flows of the good or service from

production to consumption, market performance and key interdependencies • A quantitative and qualitative analysis of value and profit distribution along

chain • Determination of knowledge, technology and resource inputs at different points • An appreciation of demand/supply and institutional factors affecting the market • Insight into the roles of key competitors, potential partners and intermediaries • Identification of major gaps and bottlenecks in the market system and potential

points of entry and value capture or addition opportunities available

Market analysis is fundamental to demystifying the complexity of markets and market forces and identifying a strategic position for the enterprise Aim: to maximise the chances of enterprise success through research, analysis and strategic decision-making

Presenter

Presentation Notes

In the case of new enterprises, the next stage of the process takes the most promising products from the preliminary survey (stage II) to interrogate their potential place in the market and value proposition more carefully. The objective of this is to identify and detail the complex web of market actors, flows of information, products and value, and identify gaps which may be addressed by the enterprise. It is important that this advance the information from stage II, and gather as much information as possible from different sources to highlight the issues and opportunities for the enterprise, both internal and external, which will determine its ability to successfully respond to the needs of the market.

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3. ANALYSE VALUE CHAIN AND MARKET NICHE

Issues this can help address: • Determination of market niche and competitors/factors for success • Knowledge of technical and resource requirements of market • Identification of priorities for advocacy in the enabling environment • Understanding of pricing, movement of goods and intermediary profit margins

How this can be achieved: • Tools for identifying key functions, flows, actors and influences on supply

chain • Market Maps, Subsector or Value Chain Analysis, Scenario tools, Venn

Diagrams

Top Tools Wageningen University and International Institute for Environment and

Development – Chain Wide Learning for Inclusive AgriFood Market Development

Markets4Poor – Making Value Chains Work Better for the Poor

Presenter

Presentation Notes

The chain of good or service activity – detailing the movement of product from source to sale and all of the activities and actors in between – is referred to as the value chain to indicate the addition of value and role of actors at each point (see next slide). In most cases, this stage of analysis involves a mapping exercise of the value chain and the enabling environment by key stakeholders. This map is then further refined using qualitative and quantitative details of key factors (e.g. prices, technological inputs or investment, capacity constraints etc.) used to illustrate the motivation and limiting factors affecting each actor and step in the chain. These are then framed as opportunities or constraints to be addressed by the enterprise in the action phase. Possible questions for this stage include: Main stages in the value chain for the product Main actors at each point in the value chain Flows of the product (and by product) between different actors Where and to what degree is value added, or value lost, as the product moves along the chain Which stages of the value chain are most profitable for which actors Main external issues affecting flow and value of resources

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EXAMPLE VALUE CHAIN MAP Strawberries in Mexico

Source: Wageningen and IIED, 2008

The visual representation of product functions, market players and channels helps to analyse key aspects of the market environment. Here, additional information on product quantity and channels is used to locate specific intervention opportunities.

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4. OUTLINE VALUE PROPOSITION AND MARKET STRATEGY

What this should include: • Further research into markets including best practise, trends and changing

dynamics and development of market information system • An analysis of strengths, weaknesses and opportunities in key market

segments • Understanding and articulation of competitive offering of enterprise • Identification of possible value addition opportunities through improved

production, processing or marketing • Definition of marketing strategy including plans for ‘5 Ps’ – product, price,

place, people, promotion • Product development and market testing

A marketing strategy ensures that enterprises are equipped with the means to take advantage of opportunities and avoid pitfalls in achieving sufficient market access

Aim: To define enterprise value proposition and outline means of marketing

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4. OUTLINE VALUE PROPOSITION AND MARKET STRATEGY Issues this can help address: • Identification of strategic marketing opportunities including through innovation,

certified or other high value niche markets • The ability to respond to changes in the market through regular input and

review of market information • Informed negotiation with others in the supply chain and cost assessment

How this can be achieved: • Extensive market research within each target market and segment, pricing

studies • Supply chain and consumer surveys, comparative products

Top Tools Aspen Institute - Branding and Marketing Toolkit: Community-Based Businesses

and Products Asia Network for Sustainable Agriculture and Bioresources (ANSAB) -

Enterprise Development for Natural Products Manual

Presenter

Presentation Notes

By the time we have reached this stage, we should have selected an opportunity for further development. Market strategy development may begin with a situation analysis and a competitive analysis in order to define the value proposition for the business in the target supply and demand market sectors. Possible questions in this stage include: What makes my product or service unique? Who are the key customers? What are their expectations for the product or service? How will I communicate the value of my product or service to consumers? What value addition or marketing opportunities are there? Who are my competitors?

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5. DEVELOP FINANCIAL AND PARTNERSHIP STRATEGIES

What this should include: • Identification of strategic partners in government, supply chain and private

sector towards improved market access, incentives and technical support • Clear definition of shared interests, roles and principles of partnership • Define initial, start-up and running costs of enterprise • Identification of internal and external capital investment opportunities and

plans • A short and longer term financial plan that aims for increasing self-sufficiency

through commercialisation revenue • A framework for equitable benefit sharing among stakeholders and

beneficiaries

The establishment of strong partnership and financial strategies is critical to the ability of small biodiversity enterprises to locate and attract resources and support Aim: to develop means to manage finances, identify and engage potential strategic partners

Presenter

Presentation Notes

In this stage, the enterprise determines strategies to address internal and external factors contributing to the financial and operational success of the business through partnerships and financial planning.

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5. DEVELOP FINANCIAL AND PARTNERSHIP STRATEGIES Issues this can help address: • Engagement with private sector and other strategic alliances • Identification and formulation of basic financial management systems • Identification of local capacity and business development service providers

How this can be achieved: • Private-Public-Partnership or joint-research and development arrangements • Multistakeholder Dialogue, Training in basic bookkeeping and accounting

skills • Financial planning with identified costs, potential revenue and profit streams • Establishment of financing schemes – grant funds, microfinance or joint-

venture project, development of cooperative, capital loan etc.

Top Tools IIED – Company Community Forestry Partnerships: From Raw Deals to Mutual

Gains? RA and TIES - Practical steps for funding certification of tourism businesses

Presenter

Presentation Notes

Financial policies and principles should be established to achieve financial objectives and smooth operations of the business. In general, this will require an assessment of the skills available to operate the small business as well as development of an accounting and financial management system. In many cases, this may require external support and training. To this end, financial planning and basic accounting tools are widely available online. Possible questions in this stage: What are the key institutions or individuals that can help to improve the enabling environment for the business? Are there technical and business development service institutions that can provide necessary development support? Where are there opportunities for strategic marketing alliances? Which financial service and private sector institutions could enhance business aspirations and operations? What are the factors affecting the price of goods and services and best potential profit margin? What are my costs and sources of revenue and how do I plan for them?

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6. OPERATIONALISE PLANS AND MONITOR PERFORMANCE

What this should include: • The development of a regular market, environmental and enterprise risk

monitoring, feedback and management systems • An action plan to address operational and resource needs and means of

achievement and pilot product in market • A strategy for the further development of business products or services,

human resources and use of profits for social, infrastructural or other investments

• An operational plan outlining organisational structure, human and financial resource management strategies as well as social and environmental mechanisms

The operational or business plan acts as a blueprint, guiding enterprise decision-making, planning and adaptation prior to and following enterprise establishment. Aim: to consolidate earlier development activities into a single adaptive management tool for planning, implementing and monitoring enterprise development activities and performance over time.

Presenter

Presentation Notes

The business plan will help to focus the short, medium and longer term needs and plans of the enterprise. Many tools and templates are available for adaptation to enterprise needs online and elsewhere (e.g. Through local chambers of commerce). In many cases, standard business plan templates will have to be simplified for the use of small biodiversity businesses. In general, plans should ensure that the goals of biodiversity conservation, sustainable use and equitable benefit sharing are internalised across all aspects of the business. This, together with performance monitoring systems will help to ensure business sustainability and competitiveness as well as an ongoing commitment to biodiversity and stakeholder objectives.

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6. OPERATIONALISE PLANS AND MONITOR PERFORMANCE

Issues this can help address: • Attracting investment and consumers through a sound business case and

social and environmental claims • Clear strategies to respond to internal (e.g. Staffing, financial projections) and

external (e.g. market trends, infrastructure) challenges or changes • Adaptive management procedures and defined roles and responsibilities • Unsustainable practises leading to the loss of market share How this can be achieved: • Consolidation and presentation of key strategies affecting business success • Definition of risk analysis and management strategies across economic,

market, environmental, institutional and technological areas of business • Environmental management, impact assessment and standards systems (e.g.

certification) Top Tools Deloitte and Touche - Writing an effective business plan, The World Bank and

African Capacity Foundation - Managing Environmental and Social Impacts of Local Companies: A Response Guide and Toolkit

Presenter

Presentation Notes

The operational or business plan should include strategies to address relevant internal and external factors of influence across four major quadrants- Market/Economy, Resource Management/Environment, Social/Institutional and Science/Technology. Possible questions in this stage include: What is the best organisational structure for the enterprise? What strategies have been put in place to address risks? What human resources, assets and technological inputs are required for the business to function? What management skills are necessary and available to run the enterprise? How will all of the strategies work together? How will I address future needs? What opportunities are there for and how will benefits accrue to local stakeholders? What training or information is needed to ensure best practise in biodiversity conservation? What are the main components and timeline for regular evaluation and assessment of enterprise activities? Are their relevant operating systems, management frameworks or certification systems that can benefit the enterprise?

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TOP 20 RESOURCES

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TOP 20 RESOURCES

Guiding Resources for Sustainable Small Enterprise Development 1. Local Business for Biodiversity Conservation, Improving the Design of

Small Business Development Strategies in Biodiversity Projects, United Nations Development Programme (UNDP)

2. Handbook for developing and implementing Pro-Biodiversity Business Projects, RSPB

3. A business guide to development actors: Introducing company managers to the development community, World Business Council For Sustainable Development (WBCSD)

4. Critical success factors and performance measures for start-up social and environmental enterprises, International Institute for Sustainable Development (IISD)

http://www.undp.org/biodiversity/biodiversitycd/localbus_globalbdconserv.pdf



http://www.smeforbiodiversity.eu/details_file_download.php?a_id=13




http://www.policy-powertools.org/Tools/Organising/docs/associations_bus_partnership_tool_english.pdf




http://www.iisd.org/pdf/2008/seed_factors_startup.pdf





41

TOP 20 RESOURCES Thematic or Sector Specific Tools 1. Market Analysis and Development Series, Food and Agriculture Organisation

(FAO) 2. Enterprise Development for Natural Products Manual, ANSAB and EWW 3. Guidelines for community-based ecotourism development, World Wildlife

Fund 4. Community fisheries: lessons from southern Lao PDR, MGAR 5. Gateway to Payment for Ecosystem Services, IUCN

Value Chain Analysis 1. Chain-Wide Learning for Inclusive Agrifood Market Development: A guide to

multi-stakeholder processes for linking small-scale producers to modern markets, International Institute for Environment and Development (IIED) and Wageningen University

2. Making value chains work better for the poor: A toolbook for practitioners of value chain analysis, Markets4Poor

http://www.fao.org/forestry/25492/en/

http://www.fao.org/forestry/25492/en/

http://www.ansab.org/books/book20032328.pdf

http://www.cbnrm.net/pdf/garaway_cj_002_commfishlaopdr.pdf

http://www.cbnrm.net/pdf/garaway_cj_002_commfishlaopdr.pdf

http://cmsdata.iucn.org/downloads/a_gateway_to_pes.pdf

http://www.cdic.wur.nl/uk/publications










http://www.markets4poor.org/

http://www.markets4poor.org/

42

TOP 20 RESOURCES Other key Resources 1. Policy Power Tools Series, IIED 2. Guide to participatory tools for forest communities, CIFOR 3. Practical steps for funding certification of tourism businesses -

Rainforest Alliance and The International Ecotourism Society 4. Branding and Marketing Toolkit: Community-Based Businesses and

Products – Aspen Institute 5. Writing an effective business plan – Deloitte & Touche 6. Connecting communities to markets: developing small-scale markets

for FSC-certified community forest operations – Imaflora and International Institute for Environment and Development

7. Producer Organisations: A Guide to Developing Collective Rural Enterprises – Oxfam

8. Managing Environmental and Social Impacts of Local Companies: A Response Guide and Toolkit, the World Bank and African Capacity Foundation

9. Building Biodiversity Business, IUCN

http://www.policy-powertools.org/

http://www.cifor.cgiar.org/Publications/Detail.htm?&pid=2095

http://www.rainforest-alliance.org/tourism.cfm?id=toolkit



http://www.community-wealth.org/_pdfs/tools/green/tool-aspen-forestry-marketing.pdf

http://www.community-wealth.org/_pdfs/tools/green/tool-aspen-forestry-marketing.pdf

http://www.deloitte.com/dtt/cda/doc/content/DI_writing%20business%20plan.pdf

http://www.policy-powertools.org/Tools/Engaging/CCM.html



http://www.oxfam.org.uk/resources/downloads/produorgs_book.pdf

http://www.oxfam.org.uk/resources/downloads/produorgs_book.pdf

http://siteresources.worldbank.org/CGCSRLP/Resources/EnvironmentalandSocialManual.pdf



http://www.iucn.org/dbtw-wpd/edocs/2008-002.pdf

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