working document · web viewcommunity initiative ~ business creation by women : measures to support...

EMPLOYMENT - NOWCommunity Initiative

~

BUSINESS CREATION BY WOMEN :

MEASURES TO SUPPORT THE CREATION, CONSOLIDATION

AND GROWTH OF WOMEN-OWNED BUSINESSES

European CommissionDirectorate-General for Employment, Industrial Relations and Social Affairs

Unit V/B/4

Manuscript completed in 1998

THE EMPLOYMENT COMMUNITY INITIATIVE OF THE EUROPEAN SOCIAL FUND

EMPLOYMENT targets groups which face special difficulties in the employment market through its four strands : women in NOW, young people without qualifications in YOUTHSTART, people with disabilities in HORIZON and, people excluded or at risk of exclusion from the labour market in INTEGRA. It will operate until the end of 1999.

Actual and potential promoters of EMPLOYMENT projects

General INTEGRA specific• local and regional authorities • NGOs for/of

disadvantaged • trade unions and other working organisations • solidarity organisations/centres for• firms and employer’s associations migrants, refugees and

ethnic • technical colleges minorities• local development agencies • functional and social • universities or research centres centres for disadvantaged groups• training, guidance and employment centres• non governmental organisations (NGOs) YOUTHSTART specific

• youth organisations and agenciesNOW specific • youth information and counselling• women’s group services• organisations promoting equal opportunities • schools

HORIZON specific• NGOs for/of handicapped people• functional rehabilitation centres

THE ADAPT COMMUNITY INITIATIVE OF THE EUROPEAN SOCIAL FUND

ADAPT is designed to help European employers and workers anticipate industrial change and deal with its effects. It will also operate until the end of 1999.

FURTHER INFORMATION

The management of the Initiatives is largely decentralised to European Social Fund (ESF) Missions of the Member States. They have designated National Support Structures (NSSs) to assist them in the implementation of the Initiatives. Further information, application forms and other publications for both Initiatives, are available from the ESF Missions and the NOW Support Structures in your Member State

2

http://www.europs.be/links/ViewAddress.cfm?sortorder=N&idCat=30&LANG=1#(NSSs)%20

http://www.europs.be/links/ViewAddress.cfm?sortorder=E&idCat=30&LANG=1#(ESF)%20

EXECUTIVE SUMMARY

NOW - New Opportunities for Women - is a strand of the EMPLOYMENT Community Initiative (1994-1999) with around 1750 projects aiming to help reduce unemployment among women and to improve the position of those already in the workforce. Entrepreneurial activity is increasing throughout Europe, particularly among women, and over half the NOW projects are developing measures to support women’s entrepreneurship. Given this focus, the European Commission formed a working group to highlight the challenges women face; and to create a European model of best practice to optimise women’s success during the stages of business creation, consolidation and growth. The group was chaired by Italy and comprised 21 projects working on this topic. A follow-up seminar ‘Female Entrepreneurship in Europe: Is a Woman’s Business different?’ aimed to stimulate a dialogue between decision-makers, project promoters and women entrepreneurs on ways to strengthen the framework for women’s entrepreneurship. This report is the product of the working group and seminar. It describes the European Model of best practice and makes recommendations aiming to reduce barriers to women’s entrepreneurship.

The European Model describes measures that prepare women for business creation (pre start-up); support them during the launch of their business (during start-up); and help them develop strategies for consolidation and growth (after start-up). Growth is particularly important for job creation as the expansion of viable small businesses is a more secure and less risk-laden strategy than the creation of new businesses from scratch. The key elements of each phase are given below:

Pre start-up

Recruitment procedures take account of women’s educational and professional achievements, and skills acquired in other ways. Motivation and commitment are essential. Familiarity with entrepreneurial activities can also be important. However, to ensure that women are adequately prepared for business creation, the amount of resources available and the duration of the programme determine the level of skills required at the start.

Programmes linking training, individual guidance, mentoring and practical experience provide the necessary business skills, develop an entrepreneurial spirit and lay the ground for an attitude of lifelong learning and growth. The development of personal skills is as important as the acquisition of business skills and knowledge. Women’s specific needs are addressed through appropriate training schedules and methodologies, and adequate support for the care of dependants.

Group work teaches women the value of collaboration, shared experience, constructive criticism and mutual support. This initiates the effective networking that will help the woman entrepreneur to achieve her business and personal objectives.

The support of family and friends is paramount but, in particular, partners and children may be slow to accept the women’s changing role. Support from tutors and other women participants help women deal with any resulting difficulties in their home life. They also help them develop strategies to promote a supportive personal environment, which is essential during the difficult stage of business creation. This includes finding a long-term solution for the care of any children or other dependants.

Equally important are measures that promote a positive and supportive attitude by the local and regional business community towards women’s entrepreneurship. Good relationships with members of Chambers of Commerce, economic development agencies, local authorities, banks, etc, are vital for the success of any new business. Projects involve representatives of these organisations in their management committees and use them as advisers and trainers where appropriate.

3

During the enterprise training programme, some women discover that running a business is not the right choice for them. Realising this before setting up a business is positive and programmes take account of such decisions by providing exit routes to further training or employment.

During start-up

Success rates increase when projects accompany women through the final stages leading to the launch of the business. This includes helping them to secure adequate finance and to choose the most appropriate legal form. ‘One-stop-shops’ and business incubators simplify the business creation process and shorten the time needed to launch the business.

Projects balance a supportive approach with leaving women to decide and act for themselves, as they must do throughout their life as an entrepreneur.

The greatest stumbling block in this phase is access to capital. Projects undertake a range of activities including:

the provision of comprehensive information on types of funding, and the financial and fiscal advantages of different legal forms of business. This is essential as the need to combine entrepreneurship with family care limits many women’s access to such information through membership of professional or social networks;

training and support to help women develop a sound business plan that will withstand a bank’s scrutiny;

the development of presentation and negotiation skills to enhance the women’s dealings with banks and other funding agencies. In particular, projects try to ensure that the women’s businesses are adequately funded.

Funding programmes targeted specifically at women’s business creation take into account women’s typical forms of business, sectors and niches. Recognising that many women have difficulty providing traditional collateral, some offer loans without the normal collateral requirement. Such funding can serve as seed capital and open doors to regular bank loans. Many banks will not consider very small loans, yet a micro credit without collateral may be sufficient to get a micro-business off the ground.

Wage and income subsidies play an important role in helping small businesses get off the ground, particularly when women have been out of paid employment for some time.

After start-up

Providing support after business start-up increases the survival rate of new companies. The women learn business techniques before start-up but need help applying them to their own particular business.

For projects targeting women who already run their own business, the most important task is convincing them of the need to grow. Businesses cannot stand still. They must constantly adapt to changing markets, develop their product or service, adjust their system of costing and pricing. Women entrepreneurs can meet these challenges only if they also invest in their own personal growth.

Busy schedules and heavy work loads deter people running small and micro enterprises from using existing information, counselling and training services. For business women juggling professional and family responsibilities, the situation is much more difficult. In addition, few are members of business networks, which are

4

hubs of information and exchange. Projects offer training through a variety of flexible methods, such as stand-alone modules, workshops, and distance-learning packages. They increasingly use the Internet as a teaching and coaching tool.

Prior to business creation, networks focus on personal support. After business creation, the balance shifts to professional and business considerations. Establishing networks of women entrepreneurs enables them to practise their networking skills before joining professional associations and regular business networks. Networking enables women to link more easily to the local business community. Extending such networking to the European level greatly enhances the confidence of women entrepreneurs, whilst widening their market and business associates.

Access to finance becomes easier in this phase. However, cash flow is frequently a problem and many small companies work with large, expensive overdrafts. A number of women make the situation worse by underestimating their financial needs and seeking too small a loan, thereby constantly over-stretching their credit limit.

Introducing women entrepreneurs to the latest information and communication technology enables them to use it effectively for the development of their business. This includes facilitating business collaboration; improving productivity; advertising and selling products; and widening markets.

Recommendations

The report makes a series of recommendations targeted at the different actors whose collaboration is crucial for successful business creation. In particular:

Women entrepreneurs are advised to obtain full information about funding programmes and to prepare their proposals in a professional manner that meets the requirements for funding. They should expect to be treated on an equal footing with men and to seek explanations for rejection, if any. Women must use networks to further their business objectives.

SME support agencies and training providers must take account of women-specific needs when designing enterprise programmes. Women returning to the labour market after raising a family may be unsure about their skills and potential, and may need some encouragement. Women tutors and advisors can act as role models. Working with the local business community will promote a more positive and supportive attitude toward women entrepreneurs.

Banks and other funders must give greater recognition to women entrepreneurs, who in many countries already create a third of all new enterprises. Their businesses often do not fit the traditional pattern yet they may be perfectly viable, provide an income for the woman and her family, and contribute to local economic development. Banks must ensure that neither their staff, nor their policies, discriminate against women. Collaboration with SME support agencies and training providers will widen women’s access to information and funding.

At the regional level, priorities for SME funding or subsidies should take full and separate account of the sectors and activities of women’s businesses. They should also ensure that women can access incubators and centres for small businesses on an equal footing with men.

At a national level, gender-segregated statistics on business creation and growth will ensure that policies and initiatives more effectively exploit the job creating potential of women. Business creation in general can be supported through reductions in taxation on labour-intensive product and services, through the provision of income and wage subsidies, and by making funds available for small loans without collateral.

5

CONTENTS

EXECUTIVE SUMMARY

1. Introduction

2. Background and context of NOW thematic work2.1 The Entrepreneurial Business Woman

2.2 Business creation as a solution to unemployment

2.3 Strategies for Business Creation

2.4 Success and failures

3. Business creation by women as a priority in employment-NOW3.1 The commitments of Member States’ Operational Programmes

3.2 Priorities as reflected by the Projects

3.3 The target groups

3.4 The Sectors

3.5 Type of measures

THE PRE START UP PHASE : PREPARING FOR THE BIG LEAP

1. Access to programmes supporting business creation by women1.1 Raising local awareness

1.2 Recruitment

1.3 Selection

2. Holistic Approach to Preparing for Business Creation2.1 Personal development and group support

2.2 Stimulating entrepreneurial attitudes

2.3 Generating and testing business ideas

2.4 Certification and accreditation

2.5 Training Methodologies

2.6 Role of the trainers

2.7 Content of the Enterprise Training Programme

2.8 Self-evaluation as an ongoing process

6

2.9 Market analysis

2.10 Practical experience

3. Networking

4. Supportive environments - The immediate personal environment

5. the business plan

THE DURING START UP PHASE: FINAL COUNTDOWN TO BECOMING AN ENTREPRENEUR

1. consolidation of the business plan

2. the operational plan

3. access to finance3.1 A ‘Women Only’ Provision

3.2 Adequate start-up capital

3.3 Guarantees and collateral

3.4 Other sources of Capital

3.5 Income and Wage Subsidy Programmes

4. support for legal and administrative procedures

5. networking, building teams and partnerships

6. supportive environments6.1 The immediate personal environment

6.2 Local infrastructure for business support

7. The launch of the business

AFTER BUSINESS START-UP : strategies for consolidation and growth

1. helping women entrepreneurs recognise the need for growth

2. Tools for auditing and taking stock

3. sourcing and managing finance

4. effective and appropriate methods of learning

5. marketing

6. cit as a tool for business

7. networking, co-operation and partnership

7

7.1 Networking

7.2 Business Collaboration

7.3 Mentoring

8. the support and development environment

CONCLUSION AND RECOMMENDATIONS

Link to the List of ESF National Administrations

Link to the List of the NOW National Support Structures

Business Creation by Women : Measures to support the creation, consolidation and growth of women-owned businesses

1. INTRODUCTION

NOW - New Opportunities for Women - is one of the four strands of the EMPLOYMENT Community Initiative (1994-1999). It provides a framework within which Member States and the European Commission work together to reduce unemployment among women and to improve the position of those already in the workforce. With a budget of almost one billion ECU, NOW is by far the largest programme in Europe for conceiving, testing and implementing new ideas for women’s training and employment. By the end of the programme, some 1750 projects across Europe will have explored new ways to improve the employment situation of women.

The rate of entrepreneurial activity among women is increasing throughout Europe. If its economy is to benefit fully from women’s potential for job creation and economic growth, every effort must be made to ensure a supportive framework for the development of women’s businesses. Measures that support women’s entrepreneurship are therefore a top priority in EMPLOYMENT - NOW. Just over half of its projects help women create a new business or consolidate and develop their existing business.

Given NOW’s focus on women’s entrepreneurship, the Commission decided to form a working group on this topic. The Member States proposed outstanding projects working in this area from which 21 were selected to participate in the thematic working group. The projects represented a range of target groups, methodologies, economic sectors and rural and urban contexts. Representatives of the Spanish and Swedish National Support Structures also participated. Chaired by Italy, the group’s remit was twofold: to highlight the challenges women face; and to create a European model of best practice to optimise women’s success during the stages of business creation, consolidation and growth.

The selected projects chose to work in three sub-groups focusing on different phases of women’s entrepreneurship:

Pre-start-up: measures to prepare women for business creation, ending with a concrete business plan.

NOWA, Austria Northside Partnership, Ireland Centre PME - Formation,

Belgium (Fr) CIDEC, Portugal

8

http://www.europs.be/links/ViewAddress.cfm?sortorder=N&idCat=30&LANG=1#Link%20to%20the%20List%20of%20the%20NOW%20National%20Support%20Structures

http://www.europs.be/links/ViewAddress.cfm?sortorder=E&idCat=30&LANG=1#Link%20to%20the%20List%20of%20ESF%20National%20Administrations%20

VKMO, Belgium (Nl) Instituto Andaluz de la Mujer, Spain

Tulossilta Ltd, Finland University of Wales Lampeter, UK Creative, Greece Liverpool City Council, UK

During start-up: support from consolidation of the business plan to actual launch of the business.

VHS, Germany STEW, the Netherlands Incubatore ImpreseDonna, Italy Nätverksbanken, Sweden Crasform, Italy

Post-start-up: support for the consolidation and development of businesses after launch.

AOF-Odense, Denmark Creative, Greece Athena, France FVECTA, Spain Terre et Mer, France Libra, Sweden Pratikas, Germany

The group had three two-day meetings between April and June 1997 and exchanged information by e-mail, fax and telephone.

This work led to the production of a draft report, which served as a working document for a follow-up seminar ‘Female Entrepreneurship in Europe: Is a Woman’s Business different?’ held in December 1997 in Brussels. The seminar aimed to stimulate a dialogue between decision-makers, project promoters and women entrepreneurs on ways to strengthen the framework for women’s entrepreneurship. Decision-makers participating in the seminar came from local, regional, national and European level organisations. They included representatives of SME and economic development organisations, banks, employers federations, trade unions and ministries of labour. The members of the working group participated in the seminar and ten brought with them entrepreneurs who had been involved in their projects. Discussion in workshops centred on: access to finance; business growth; technology and new forms of business; and entrepreneurship as a solution to unemployment. The results of the seminar have been incorporated into this final report.

The report shows all the necessary steps and possible approaches for each of the three phases, illustrating them with examples of good practice drawn mainly from the members of the working group. The report also includes descriptions of the 21 projects participating in the working group. The report is published in English and French. It also forms the basis of a shorter publication in the European Commission’s Innovations series to be published in several languages in 1998.

2. BACKGROUND AND CONTEXT OF NOW THEMATIC WORK

In most countries within the European Union, women are creating a third of all new businesses. In total, 18 million women are engaged in an entrepreneurial activity. In 19961, 15.% of the European workforce was self-employed, with striking differences between the North and South. In Greece, a third of the working population was self-employed. In Spain, Italy and Portugal, self-employment stood at 20 to 27%. However, in Denmark, Germany and Luxembourg, less than 10% of the working population was self-employed, with lower percentages for women (DK 4.2%, D 6.1%, L 6.7%). In Europe as a whole, 9.5% women were self-employed, compared to 18.9% men. Another North-South difference was the sector in which self-employed women operated. In southern

1 European Commission: Employment in Europe 1997, ISBN 92-828-1575-7

9

Europe, the highest percentages of self-employed women were in agriculture. In northern countries, women’s enterprises and self-employment were concentrated in the service sector. Yet the trend towards the service sector is clear throughout Europe.

Research on women’s business creation in Europe2 estimates that the number of self-employed women may be twice as high, with approximately 20% of the 92 million working women involved in self-employed activities. In addition to self-employment, these activities include running one-woman businesses or large companies employing more than 500 people. They also include co-owners of family enterprises. The same research points to the fact that most women entrepreneurs have very small businesses, employing less than 10 people, although a growing number of women run larger enterprises. Evidence suggests that women frequently manage these companies in partnership with another person, more often with men than with women. It also suggests that the desire to be one’s own boss is more likely than money to motivate women to start their own business3.

For many years, the idea of the ‘entrepreneurial’ personality has dominated the debate about the potential of SMEs to succeed. Competitiveness, self-esteem, independence, willingness to take risks, commitment to a business idea - these have been regarded as key characteristics for success in the world of business. Companies created and led by such entrepreneurs identify and exploit new markets, with an eye to profit and growth. They use tools such as investment in innovative product development, sophisticated marketing and distribution policies, and total quality management. However, as business creation increasingly becomes a response to high levels of unemployment, a new category of enterprises has emerged. Here the priority is to secure employment and economic survival for the entrepreneur and perhaps one or two additional people. Many women’s businesses in Europe fall into this category, although a large number will also have the keen entrepreneurial edge of the first category.

2.1 The Entrepreneurial Business Woman

Many women entrepreneurs in the first category have followed similar career paths. Most have reached middle or even higher management positions. Some have become stuck while their male counterparts kept climbing the corporate ladder. This phenomenon is known as the ‘glass ceiling’. Others may have lost their jobs through restructuring and downsizing. In both cases, they have left a corporate career to head up their own company. Motivation is combined with complete commitment to their business idea. The women usually have a high level of education and considerable work experience. Often they have few family commitments and can dedicate their time to the development and growth of their business.

In 1994, Muir studied a sample of 57 women entrepreneurs from different parts of Europe. Four out of five of their enterprises employed up to 100 people and had a turnover of one to 50 million ECUS. The women did not believe there was a specific female management style or female enterprise culture. Yet the study showed that they all practised participatory and non-hierarchical leadership styles. Twelve percent of the companies employed only women. In a third, women made up 75% of the workforce. In 70% of the companies, up to 40% of the staff worked on a flexible part-time basis. This highlighted the women entrepreneurs’ use of innovative patterns of work organisation and recognition of a need to reconcile work and family life. It is important to note that the women entrepreneurs felt they paid no special attention to equal opportunities or

2 Muir, Elisabeth, J.: Enterprising Women in Europe, European Commission, 1994, V/329/94-EN; Turner, Caroline: Women’s Businesses in Europe: EEC Initiatives, in: Sheila Allen and Carol Truman (eds): Women in Business: Perspectives on Women Entrepreneurs, London, 19933 UK Federation of Small Businesses survey, sponsored by Lloyds Bank plc, 1997; study on women entrepreneurs by Dr Jill Venus, University of Wales, Lampeter, 1997

10

women’s advancement in management. Their ‘women-friendly’ policies were due to a sound philosophy of finding and keeping the best staff.

2.2 Business creation as a solution to unemployment

Many businesses created as a solution to unemployment have quite different characteristics to the enterprises described above. Employment policies focusing on business creation target women returning to the labour market after raising a family, (long-term) unemployed women, women from ethnic minority backgrounds, and women in rural or deprived urban areas. These are also the main target groups of EMPLOYMENT- NOW. Such women often lack what many ‘entrepreneurial’ women have in abundance - commitment to a vision, self-esteem, independence, ability to take risks, flexibility, educational qualifications and broad-based professional experience. However, in countries such Italy, Germany, Spain, Portugal and Greece, structural changes and high levels of unemployment mean that many female university graduates find themselves without a job. Their high level of education enables them to cope with general entrepreneurship training programmes, but they often find it difficult to develop an entrepreneurial edge. The same is true for women with good vocational qualifications and substantial work experience who lose their jobs due to ‘lean management’ strategies or the privatisation of the public sector. Developing an entrepreneurial spirit is sometimes less of a problem for women with little education or training. Many have survived by working in the informal sector, using skills they acquired outside formal training and employment.

In northern Europe, 60% of new enterprises are born from unemployment4. In the south it is 70%. Clearly they belong to the category of micro-businesses where their owner’s priority is economic survival. No gender-segregated data are available at European level but, as the unemployment rates for women are higher than those for men in most European countries, women may possibly run a higher percentage of these new businesses than men.

2.3 Strategies for Business Creation

European and national strategies for stimulating and supporting business creation include programmes of counselling, advice and training, with schemes providing access to capital and various financial subsidies.

Research has often pointed out that (potential) women entrepreneurs have different needs5. For the highly qualified women in the Muir study, counselling, advice and training were not priorities. The courses offered by mainstream SME support agencies were too theoretical and far from the business reality, especially concerning problems that occurred at a later stage of their company’s development. In addition, the training programmes were scheduled in a way that did not fit into their busy work days. Instead of using the support services offered by public and private agencies, the women developed their own strategies to prepare themselves for future challenges. Some mentioned their spouse as a source of advice and know-how, others used ‘mentors’. Many relied on the management training they had received while in employment. Some spent time in public or business-related positions to learn from more senior and experienced people.

These and other findings correspond to the results of studies made in some Member States. Successful women entrepreneurs often feel that as they succeeded, so can others. They seldom believe in special measures for women. They develop few networks, nor do they join existing professional or social networks. Sometimes membership of these networks is restricted to men, such as some Rotary clubs, or golf 4 European Commission: Enterprises in Europe, Fourth Report, 1996, ISBN 92-827-7296-95 S M Mukhtar (1996) ’A case for Gender-based Entrepreneuralism, Business Competence Model and Policy Implications: a Global Perspective’ in Forging Alliances in Global Markets, International Management Development Association, D Lascu, M Kaynak and Z Ahmed (eds) pp224-229, Nov 6-8 1996

11

clubs that allow only men to play at weekends. Sometimes they choose not to join predominantly male organisations. In many cases, their participation is limited by competing family commitments. Compared to men, they are far less visible and thus they fail to be role models for other women.

Women starting their own business from a situation of unemployment rely heavily on the various support programmes offered to them. This point is stressed in the thematic evaluation reports of the first NOW programme (1991-94)6. A major achievement of the first NOW programme was the development of pathway programmes. These supported women throughout the process of becoming self-employed or setting up a business. They were valuable tools for giving less-experienced women a better chance to establish their business. In addition, the programme helped to redefine the concept of business creation for women (and men) who are not ‘natural’ entrepreneurs. The main objective of their micro or small enterprises is not necessarily expansion. Their priority is economic viability that secures a modest income for the owner and her or his small staff. Survival from year to year, maintaining turnover, finding a balance between professional and private life are regarded as success, rather than exploiting new markets and company profit and growth.

2.4 Success and failures

Employment growth in the European Union is due to SMEs rather than large corporations. Furthermore, women create about a third of businesses in many Member States. Thus a substantial employment potential exists not only for women entrepreneurs themselves, but also for other women and the local communities where their businesses operate. This is especially true for the ‘entrepreneurial’ women. Their companies tend to hire more women and use flexible work organisation patterns, thereby enhancing employment prospects for other women. In addition, SMEs are predominant in the service sector, which is seen as the most important source of future employment. Areas of particular growth include health and care services and tourism, sectors where women are present in large numbers. Small enterprises may be less affected by the globalisation of the economy and by international competition, often being well-rooted in their local or regional context. SMEs can also benefit from the increasing practice of large enterprises to subcontract or ‘out-source’ activities.

A recent study7 evaluated the economic performance of 22,000 enterprises in France. Women entrepreneurs and companies headed by women were found to have results significantly better than those of the average French company. The study assessed the 500 top companies in the three categories of small, medium and large enterprises. They compared their performance with the 500 top women’s businesses in each category (only 300 large corporations had female chief executives). In 1994 and 1995, growth rates for women’s businesses were higher than average for small and medium-sized companies. The average rate of growth was 6% and 6.6% for small and medium-sized companies. Women scored 7.8% and 16.9% respectively. The situation is reversed only for large corporations, with an average 5.4%, compared with 3.4% for women. Concerning profitability, the comparison shows excellent results for women’s and female-headed companies. Women’s small enterprises achieved 2.4% in 1994 and 3.1% in 1995, compared to an average of 1.4% and 1.7%. The gap is even more significant in medium-sized enterprises. Women’s businesses achieved 3.2% (1994 and 1995), the average was 1.1% in 1994 and 0.6% in 1995. For large companies, the profitability of women’s enterprises is twice the average percentage (1994: 2.8%/1.4%; 1995: 2.9%/1.5%). Like the sample in the Muir study, these women entrepreneurs and managing directors mostly deny having a female leadership style. Yet many employ more women in higher positions than the average French company. They use

6 Fenez, Elisabeth: Enterprise Creation by Women, Case study of B, ESP, F, GR, IT, L and P, NOW Community Initiative (1991-1994), vol., European Commission, 1994; Koster, Els: Good Practice in Business Creation, Case Study of DK, D, IRL, NL, Ukni + UKgb; vol., European Commission, 1994;7 Etude SCRL pour L’Entreprise: Les Femmes dirigeantes dans les Entreprises Francaises, Paris, 1996;

12

participative management styles and are highly creative when it comes to flexible, family-friendly work organisation.

Despite this promising picture, SMEs face numerous risks and many businesses fail. Within the first three years, 35 to 40% fail. Sixty percent fail within eight to ten years after start-up8. No data at European level compare male and female run enterprises. However, the risks and difficulties faced by women’s enterprises are often greater. Start up and business growth is frequently hampered by limited access to capital. Funding for SMEs is provided mostly by banks, which may charge higher interest rates and offer less favourable conditions for smaller loans. Obviously, small loans require the same amount of paper work as larger loans but yield a much smaller return.

A recent study9 carried out on behalf of the European Commission states that the problem is also partly due to the sectors in which many women choose to set up in business. Small loans for little local retailers, for instance, may not be a priority for banks. The same may be true for businesses in the area of neighbourhood services or care for children and other dependants. Most banks are geared towards the needs of large corporations and do not always cater for the types and economic sectors of small businesses that many women plan to set up.

For most businesses created by unemployed women and women returners, the problems will be even greater. They often have difficulty finding even a modest amount of capital for start-up or expansion. Without the required collateral, they have difficulty securing long-term loans on more favourable terms. Many women entrepreneurs have no option but to take out personal loans with higher interest rates10. A great number borrow money from family and friends. Some resort to non-bank lending schemes, which are very expensive. Women tend not to join Chambers of Commerce or employers’ organisations so they have less access to contacts and information, especially concerning subsidised funding for SMEs. They do not make time to use existing counselling, guidance and training opportunities, though they would clearly benefit from better information, especially about funding opportunities. Many would also benefit from improved skills in marketing, management and new technology.

Many of these entrepreneurs make very little income. They often have insufficient social insurance cover because they feel they cannot afford it during the first crucial years. They give little thought to taking the risk of modest growth, which could eventually make their enterprise more economically viable. These ventures are extremely vulnerable.

3. BUSINESS CREATION BY WOMEN AS A PRIORITY IN EMPLOYMENT- NOW

3.1 The commitments of Member States’ Operational Programmes

Under the EMPLOYMENT Community Initiative, each Member State agrees an Operational Programme (OP) with the European Commission. This policy document forms the strategic framework for measures funded by the Initiative. All OPs refer to business creation by women as a priority theme and every Member State, except Luxembourg, specifies measures aimed at the promotion of women’s entrepreneurship. In the case of eight Member States (Belgium Flanders, France, Germany, Greece, Italy, Portugal and Spain), these measures include the establishment of financial support systems.

8 Enterprises in Europe, op.cit.9 Studio Entreprendre: Recherche exploratoire pour la Création d’Outils Financiers en direction de l’entrepreneuriat féminin en Europe, European Commission, 1997, V/5454/97-FR10 Seeland, Suzanne at al.: Öko-Bekleidung: Von der Produktidee zur Gründung, Projektdesign, 1991; Endbericht 1994; Gestaltungsmerkmale eines Existenzgründungsprozesses aus ABM, in: Ministerium für Arbeit, Soziales, Gesundheit und Frauen (MASGF) (eds.): Existenzgründungen aus der Arbeitslosigkeit, Potsdam 1995

13

3.2 Priorities as reflected by the Projects

Of 754 projects funded during the first phase of EMPLOYMENT-NOW, 384 focus on some aspect of women’s business creation and entrepreneurship (51%). The emphasis given to the issue varies from country to country. The Member States with the highest percentages of business creation projects are Austria, Denmark, Greece, Italy, Spain and Sweden. Of these countries, the rate of female unemployment for Greece and Spain are among the highest in the European Union. For Italy and Sweden it has dramatically increased between 1990 and 1994.

Projects focusing on Business creation and Entrepreneurship

Member State

Total N° projects

N° BusinessCreation

% BCprojects

% Female Unemployment 1990 1996

A 16 9 56 3.4 5.3B (nl+ fr) 15 +25 4 +5 27 +20 10.6 12.8DK 7 4 57 8.4 8.5D 67 20 30 5.9 9.8ESP 164 106 65 24.1 29.5F 157 63 40 11.8 14.7FIN 10 4 40 2.8 15.8GR 26 21 81 10.8 15.3IRL 39 10 26 14.6 12.0IT 73 52 71 13.8 16.4L 1 - - 2.5 4.7NL 15 8 53 9.1 8.2P 43 22 51 6.3 8.3S 10 8 80 1.8 9.4UK (gb +ni) 79 +7 35 +3 44 + 43 6.6 6.5TOTAL 754 384 51

3.3 The target groups

Most projects focus on unemployed women and women returning to the labour market after raising a family. Among these broad categories, projects also mention targeting women living in rural or deprived inner city areas, single mothers, and women from ethnic minority or migrant backgrounds. In some Member States, projects also help women entrepreneurs consolidate and develop their existing business. A few projects target trainers, counsellors and advisors who promote business creation and growth.

A comparison of data at Member State level reveals that some countries have chosen a two-pronged approach, targeting unemployed women as well as entrepreneurs. For example, some prepare unemployed women for business creation while at the same time setting up a network of existing women entrepreneurs. In Sweden, 50% of the business creation projects in the first round target women who already run a business or who are self-employed. In other countries, projects focus only on business creation as a strategy to fight female unemployment. Some projects concentrate on helping existing entrepreneurs to consolidate and develop their business. Projects see their eventual employment of additional staff as a more sure way of creating new jobs for unemployed people.

With a view to mainstreaming and increasing impact, many projects adopt measures that raise awareness and train agents of change. These include trainers, Equal Opportunities advisors and the personnel of business creation and SME support agencies. However, these activities are usually only a secondary objective. Normally

14

they are linked to the provision of training and guidance for the future women entrepreneurs.

The majority of projects target women with few qualifications. This is consistent with the overall objective of Employment-NOW to create opportunities on the labour market for the most vulnerable groups. A number of projects target highly qualified women with a strong motivation to set up their own business. These businesses are usually closely related to their educational backgrounds or work experience, but some women opt for quite different areas. Many projects operate in the framework of local development. In some cases, this may involve rural or sparsely populated areas. In others, projects work in deprived urban areas.

3.4 The Sectors

The sectors targeted by the NOW business creation projects confirm the trend that women’s enterprises tend to be small and operate mostly in the service sector. There are few projects in the traditional agricultural sector and even fewer in the industrial sector. A small number focus on urban renovation and restoration of the architectural heritage. Clearly projects are identifying growth areas such as personal services, tourism and ecology-oriented markets. Agricultural activities are often linked with environmental protection, such as in the production of organic food. The same applies for projects focusing on tourism. Women working in the construction industry, whether as architects or decorators, are adding an ‘ecological’ dimension to their work.

By grouping closely related sectors, trends become even more visible. Tourism, agro-tourism, hotel, catering and protection of the cultural heritage are the most targeted sectors. These are followed by child care and neighbourhood services. Other sectors frequently mentioned include tele-services and business services; environmental protection; information and communication technologies; agricultural and horticultural activities; and trade, including international trade.

15

3.5 Type of measures

Most projects have developed a programme of activities that accompanying potential women entrepreneurs throughout the process of business creation. Their holistic approach integrates information, counselling, guidance and training in both business skills and personal development, sometimes with specific modules of management and language training. Training in enterprise creation is offered by about 70% of projects. Sixty per cent offer individual guidance and nearly half the projects use different techniques to enhance management skills. Other activities include the provision of information services, pre-training, work placements, personal development and language training.

While some projects provide a range of services for women taking part in its enterprise programme, others set up support structures, called variously ‘Sportellos’, ‘guichets’ or ‘one-stop shops’ that provide information, counselling and guidance to a much larger group of women. In many cases, the second type of project includes the training of counsellors, advisors and trainers to work in the newly-created centres targeting women entrepreneurs. Other projects link their activities to efforts for the integration of Equal Opportunities and specific services for women into mainstream services, thus aiming to change the existing systems for business creation and SME support.

Projects complement the major activities of counselling, guidance and training with various measures, such as setting up national and transnational networks and, most important, continuing support after women have set up their business. About 10% of projects aim to introduce financial support schemes.

There is much evidence of co-operation with local key-actors to create networks for the support of business creation. Links with local enterprises result in help with training, and the provision of expertise and work-shadowing opportunities. Other important actors are the social partners, local authorities and local training and employment services. Women’s NGOs tend not to play a significant role in this context.

16

THE PRE START-UP PHASE : PREPARING FOR THE BIG LEAP

Women decide to set up in business for various reasons: to have their own income; to be their own boss; to escape unemployment; or to provide a greater opportunity for personal satisfaction and professional growth. Translating this decision into practice requires careful planning, training and support. However, women are often unaware of the range or availability of training and support services. Organisations offering such support include training organisations, SME support agencies and women’s NGOs. If women are to successfully set up in business, these organisations must ensure that women have full information in order to access these support measures.

Women often have more difficulty convincing their partners and family of the validity of their business idea11. Many lack confidence, having been out of the labour market for some time. Most business creation programmes therefore combine enterprise training with individual counselling and the development of personal skills. Their holistic approach takes into account each woman’s starting point, leading her through the development of her business idea to the definition of a viable business plan.

Important steps during the pre start-up phase of business creation are:

1. Access to programmes supporting Business Creation by women1.1 Raising local awareness1.2 Recruitment1.3 Selection

2. Holistic approach to preparing for Business Creation2.1 Personal development and group support2.2 Stimulating entrepreneurial attitudes2.3 Generating and testing business ideas2.4 Certification and accreditation2.5 Training methodologies2.6 Role of the trainers2.7 Content of the enterprise training programme2.8 Self-evaluation as an ongoing process2.9 Market analysis2.10 Practical experience

3. Networking 4. Supportive Environments - The immediate personal environment5. The Business Plan

1. ACCESS TO PROGRAMMES SUPPORTING BUSINESS CREATION BY WOMEN

1.1. Raising local awareness

Before women are recruited to business creation programmes, they and their local community must recognise and appreciate the significant impact that women’s entrepreneurial activities can have on local economic development. This potential is not always recognised by the local community, which must be stimulated to provide a more positive and supportive framework for women’s entrepreneurship. An environment where business creation is seen as a real opportunity for women is important for the long-term success of any new venture. Therefore, raising the awareness of local

11 KMO-Studiecentrum K.U. Brussel: Actie-onderzoek “De vrouw in het zelfstandig ondernemen”. Brussels, 1993.

17

authorities and employment services to the potential advantages of women starting their own businesses can help them develop measures to support women locally.

NOWA is an Austrian network for local development whose members attended local council meetings to explain their activities. They identified a contact person in the council who would act as a liaison person. This contact person and the local mayor were invited to all local activities organised by NOWA. Informal discussions with these local key actors was extremely helpful in motivating and engaging their support for the project. They also provided clear information about the most appropriate strategy for working with each village.

NOWA

1.2. Recruitment

Recruitment is the process of making contact with women who may be interested in self-employment or in setting up their own business.

Most women do not consider setting up a business, even if they are having difficulty finding a job. This is particularly the case if no-one in their immediate surroundings - family, friends, or neighbours - is involved in such an activity. Sometimes, becoming an entrepreneur and having an independent income goes against the traditional role of women. Such social and cultural barriers must be overcome to attract women to business creation. Furthermore, women who have been unemployed for some time usually have little or no up-to-date information on the current labour market. Particular attention must therefore be given to developing a plan of action to ensure that information and guidance reach the target group. Some women are unfamiliar with formal training courses. They may therefore require help identifying any additional support they need in order to participate in the training. This may include child care and the flexible scheduling of training. A clear strategy involving all local players can ensure the most effective recruitment of potential women entrepreneurs.

The project in Liverpool initially advertised itself by distributing leaflets and displaying posters in local community centres and relevant grassroots organisations. It also advertised its programme in local free newsletters and on community radio. Informal half-day open sessions were held at local centres with child care provided and someone on hand to give individual advice. The project tried to reach women at places they regularly visit and where they trust the information provided.

LIVERPOOL CITY COUNCIL

The existing practices and image of an organisation will influence its recruitment strategies for programmes supporting business creation by women. A women’s organisation, women’s NGO or university department of women’s studies can use its reputation for women-specific approaches in promotional materials and through word-of-mouth. Mainstream providers may be inexperienced in women-friendly training methods and could therefore risk losing good women candidates. A collaboration between women’s organisations and mainstream institutions could be beneficial to all.

NOWA’s network, involving local authorities and local enterprises, is backed by an association of 25 municipalities in the Graz area. As a women’s NGO, it is in a unique position offering information, guidance, counselling and training with a clear ‘women’s’ label.

NOWA

In some cases, women’s organisations have a well-established position built up over many years.

18

In 1996, the Women’s Institute in Andalucia set up eight Centros Vivem in collaboration with the local provincial councils. They offer specialised support for new and existing women entrepreneurs. Through a large publicity campaign, the centres distributed leaflets announcing the programmes they offer. Posters, leaflets and a videotape are also displayed at the centres which, in most cases, are located in the same premises as the local Women’s Information desk. The link with the Women’s Institute enhances the visibility of the Centros Vivem and carries a label of women-oriented approaches appreciated by their users. Since they were set up, more than 3,500 women have used their services. Eighty-five percent were interested in setting up a business, 15% were already active entrepreneurs.

INSTITUTO DE LA MUJER, ANDALUCÍA

A mainstream organisation must pay special attention to ensuring women-friendly strategies. Women may have needs different to men’s concerning business creation, so a mainstream organisation has to adapt its strategies accordingly. The top managers have to fully support the idea of providing training and support for women’s businesses, including any specific needs this may require.

Local people find it hard to relate to universities with their strong academic image. Therefore, a key issues for the University of Wales Lampeter (UWL) is its image and credibility in the local community. Through its Continuing Education department, the rurally-based university has established a reputation locally for courses which meet the needs of local people. Of particular success have been their courses in technology awareness and enterprise support for women. This reputation and local image is really important when recruiting participants as much recruitment is done by word-of-mouth or personal recommendation. When advertisements appear in the press, women can connect this with a more personal knowledge about the courses the University has run in the past. Recruitment is based on the idea of community awareness. A table in a local supermarket may be used to advertise courses. Staff are available to speak to women’s and other community groups. Local radio and news sheets (in English and Welsh) highlight new courses and disseminate information on trainee successes.

THE UNIVERSITY OF WALES LAMPETER

A training organisation can build on its expertise in training methodologies, ensuring they are adapted to women’s needs. This can involve pre-training, individual counselling and tailor-made training modules.

Contacts with local employment agencies, the distribution of leaflets, a press conference and articles in the local press captured the interest of nearly 150 unemployed women. All wanted to develop a business idea and set up their own enterprise. Information sessions and individual interviews helped clarify the aims of the Créatelle programme.

CENTRE PME - FORMATION

1.3. Selection

Selection is the procedure whereby a set of criteria is used to assess the motivation and capacities of women candidates: are they willing and able to engage in a process leading to business creation? Methods of selection range from an open process based on self-selection to a procedure using strict criteria. Whichever method is used, there is a certain amount of self-selection as each process enables women also to decide whether this option is the correct choice for them. Whether projects use strict criteria or not, all look for strong evidence of motivation, commitment, and some basic understanding of what running a business might entail. Either women continue on this track or they can ask for advice about other opportunities.

19

During the recruitment phase, half-day introductory sessions provided sufficient information and individual advice to enable women to decide whether they wanted to explore self-employment or choose another course of action. However, before being accepted onto the programme, the women had to show that they had a focused business idea and that they had basic literacy and numeracy skills. This process resulted in a list of women from which those most likely to succeed were selected. The remaining candidates were placed on a waiting list to participate in the next programme or were directed towards another, more appropriate type of training.


The role of the trainers or counsellors in the selection process is essential. They will be experienced in assessing whether the women candidates can successfully follow the training programme, particularly if they have been involved in other courses on female entrepreneurship.

At STEW, the Amsterdam Centre for Small Business Development, candidates submit an application providing information on their work experience, business idea, motivation and views on entrepreneurship. The candidates, most of whom are over 30 years of age, must be registered as unemployed, but an exception is made for women returners. They must also show that they have the training and qualifications required by law for the type of service they propose offering. The feasibility of the business idea plays an important role in deciding whether a candidate is accepted, as does age and previous work experience. Educational qualifications are not part of the selection criteria as they do not necessarily indicate a capacity for entrepreneurship. The STEW business advisors screen the application forms and invite promising candidates to an interview, where they can discuss the business idea and assess the candidate’s entrepreneurial capacity. The business advisors rely on a set of criteria and their own professional experience and judgement to assess the candidates. If in doubt, they consult the project co-ordinator. Candidates who do not pass the selection procedure receive an individual reply with advice, where possible, on how to strengthen their business idea. If women are too advanced with their business idea to benefit from the year’s training programme, they are advised to participate in one of STEW’s short courses on entrepreneurship. They can also use STEW’s open counselling and advice service.

STEW

Some projects opt for strict selection criteria combining motivation, educational background, a convincing business idea and former work experience. They feel a clearly defined target group is the best guarantee for success.

This project in West Flanders selects women candidates on the basis of a rigorous selection procedure. It feels that moving from unemployment to creating a business is a big step and the intensive selection process ensures the selection only of those most likely to succeed. The candidates must be local job seekers, without major financial commitments, and with at least secondary education qualifications or relevant work experience. Candidates must demonstrate certain skills related to communication and autonomy, taking initiative, having confidence, showing a commercial attitude and having a stable personality. The selection procedure involves two interviews, psychological tests and an assessment using role play.

VKMO

2. HOLISTIC APPROACH TO PREPARING FOR BUSINESS CREATION

20

A holistic approach implies that the different aspects of training and support develop both the personal skills and business knowledge necessary for successful entrepreneurship. It also takes into account the personal background of each woman, recognising that someone returning to the labour market after an absence of 15 years has different needs to someone who has recently left her senior position in a large company to set up her own business.

2.1. Personal development and group support

Women who have not been in paid employment for some time often lack confidence and have a poor self image. Furthermore, their decision to set up a business may mean convincing their family and friends of their motivation and ability, particularly to combine running a business with other responsibilities. It is therefore crucial that projects incorporate measures that develop personal skills, particularly self-confidence. Women must also learn to take risks, to seek the help of others and to become leaders. Many women are accustomed to meeting their own needs, but they learn that others can make a major contribution to their business idea. Personal skills and group dynamics can be developed using various methods, offered either as separate modules or discreetly incorporated into regular ‘business creation’ courses. For example, a module on marketing could use small group working to enhance leadership skills or use role play to enhance the women’s confidence in certain situations. Social and cultural differences may influence the methods chosen.

Personal Development and Capacity Building is a crucial aspect of this project located in a part of Dublin with areas of high unemployment. The training involves a health education programme which allows women to experience how simple changes in lifestyle and nutrition, as well as regular relaxation and stress management, promote well-being. Women are encouraged to focus on themselves as individuals, rather than as wives or mothers. They also reflect on how they would like to plan their life. A residential weekend allows time for the group to get to know each other. Initially, the women are feeling their way into the group, the sense of belonging is being tested and there is a greater dependence on the leader/trainer. As the group develops, trust grows, people take more responsibility, leadership is shared and any differences are discussed openly and frankly. Throughout the module, participants learn: to take control of their lives to value themselves and their relationship with other participants to present themselves effectively to recognise goals to define more clearly what they really want to do

NORTHSIDE PARTNERSHIP

Within the personal development part of the programme, special attention is given to handling conflict. Trainees describe conflicts in a ‘conflict diary’ noting the issue, the context, the people involved and solutions found. Such reflection helps the women learn how to deal with potentially stressful situations.

NOWA

2.2. Stimulating entrepreneurial attitudes

Amongst other things, successful entrepreneurs need to take initiatives, show self-confidence, possess negotiation skills and have ambition. These characteristics are not often well-developed in women. Indeed, women may even suppress them as they are linked to traditional male attitudes and images. Some women may have developed an ‘entrepreneurial spirit’ through contact with family members who own a business. A few may have developed the skills whilst working in the informal sector. For others, the entrepreneurial attitude is something they must learn. This is especially the case if they have previously worked for someone else and are not used to generating business and customers for themselves.

21

The public service in Finland is going through a process of major change. As the public service is reduced, demand for private services in the health and care sector is ever increasing. The project targets trainers and women who previously worked in the public sector and who now want to set up their own business. Most assume that running a business is just about accounting, finance and technical issues. However, despite having relevant qualifications and work experience, the most fundamental requirement for these women is the development of an entrepreneurial attitude. The programme starts with ‘My business as my career’ for which every woman has to present a plan of how she sees her future: where am I now? What will my business be? Where will I be in a year and two years’ time? What else will I be doing? These exercises are group-based as group dynamics are an excellent tool for changing attitudes. Particular attention is attached to risk taking and uncertainty: How do I deal with risk and what strategy can I develop to cope better with it? The project uses simulation exercises and an intensive evaluation of personal capacities to further enhance and stimulate the entrepreneurial attitude.

TULOSSILTA OY

2.3. Generating and testing business ideas

Most women have an idea about the business they want to start but few appreciate what constitutes a viable business. Individual guidance and group workshops enable women to work up and test their ideas through examples, exercises and checklists. At this stage, it is important that women keep several possibilities in mind, including products and processes that build around their main idea. If the original idea does not test out well, there are alternatives to try. Working with others and involving their ideas, different talents and skills can enhance the generation and evaluation of business ideas.

After the creative phase of generating business ideas, participants in the Greek project, DATAWEB, make a systematic analysis of the business idea. This analysis involves: creating a profile of the target customer specifying the geographical area of the target market gathering every information about the competition describing the benefits of the product knowing why customers should buy from you instead of the competition estimating ‘the right price’ for your product (profitable and competitive) knowing the trends and growth potential of your market and sector listing the legal procedures you may need to follow listing the resources (quantity and quality) you will need to turn your idea into

a business working out a strategy for securing the necessary resources

CREATIVE

Women graduates are often unaware of the potential opportunities for entrepreneurship. After gaining a variety of business and management skills, they can follow a week long module, organised by the University of Wales Lampeter. It takes them from the generation of a business idea through to the presentation of a business proposal. Working in groups, they use their own interests and experiences to generate and explore potential business ideas for a real scenario (for example, a vacant shop in the local High Street). ‘Real’ information (in terms of costs and any available market analysis) is provided and backed up by staff who ‘role play’ various support services (bank, Estate Agent, etc). By the end of a week they have developed strong business proposals. The advantage of this method is that it de-personalises the generation of business ideas and allows women ‘space’ to explore business possibilities. Once a group has been working together for some while, the women develop the confidence and group dynamic to provide very positive contributions to the development of

22

each other’s ideas. Where women already have embryonic ideas, group brain-storming is particularly useful. This involves a woman writing her business idea in the centre of a large piece of paper (3 or 4 words only) which is stuck on the wall. She briefly describes her idea and then other women spontaneously provide input. The woman adds these thoughts and ideas to her paper, trying to make links between them. The woman, in conjunction with the group, then talks through which ideas might work for her.

UNIVERSITY OF WALES LAMPETER

Once the initial stage of generating ideas is over, a more systematic analysis of the business idea against the real market opportunities has to be made, so that the final idea really means business.

The project collaborates with local authorities, nursing institutions and hospitals which are major potential clients for the new businesses. During the training programme, each trainee is allocated one of these major clients in order to field test her business idea.

TULOSSILTA OY

2.4. Certification and accreditation

Accreditation is the process of verifying that satisfactory levels of skills or abilities have been demonstrated, and giving them value or credit. The fact that such skills have been accredited by an authorised body enhances the women’s self-esteem and means that the skills will also be recognised by other organisations, training bodies and employers. It is important when designing a programme for women to provide them with accreditation and certification that will enable them to progress direct to business creation, further training or paid employment as they wish. However, there are still major differences concerning certification and accreditation in the Member States of the European Union. In the UK and Ireland, the system tends to be more open and flexible, whereas in most other countries, the content of the training courses has to be in line with national level courses. Here the number of hours and subjects are prescribed and the system is more rigid. Modular courses can lead to problems in this respect. Nevertheless, by the end of the programme, women must have all the skills necessary to launch a business, and they must possess a viable business idea. The following are examples of effective progression routes:

1. The National Council for Education Awards has accepted a proposal from the WENT project to allow participants access to a third level qualification in Business Studies. The women will complete modules on Entrepreneurship and Enterprise Development and on Communications. The accreditation body has also agreed that the percentage of marks gained through examination be reduced from 50% to 30%. This increases the continuous assessment and project work element of the programme to 70%. These methods of assessment are more appropriate for the women who have little experience of formal examinations.2. The Women’s Studies course at University College Dublin. Participants on the WENT programme will complete two modules of a Certificate (four modules are required to complete the certificate). From this, they may progress to a Diploma, Degree and Masters in Women Studies. This is a very positive development since their initial access is not dependent on prior qualifications and their continuing access depends only on performance. There is therefore a genuine progression route for these women up to Masters level.


The CIDEC trainers and project team made time to ensure they had a common understanding of the goals and objectives of the project. They agreed the content of the training programme and methods to be used: group work,

23

discussions, role play and case studies. They chose a flexible approach leaving space for each trainer to adapt the content and methods to the needs of the trainees. However, the accreditation system in Portugal inhibits training based on skills assessment. The centralised certification system means trainees are generally assessed on more technical ‘measurable’ subjects, than on exercises geared towards personal development.

CIDEC

2.5. Training Methodologies

When developing a training, education or employment programme, it is vital to take account of the participants’ needs. This is certainly the case for women who register for courses in business creation. They may all have the same goal of setting up in business, but they have different motivations and backgrounds. Some women are returning to the labour market after a long absence whilst others may just have decided to change career. Some have no formal qualifications whilst others just need to update their skills. Some women have young children whilst others have children now grown up.

Training providers must be sensitive to this heterogeneity. Many opt for a modular approach which enables participants to follow an individual pathway within a core framework of courses and other support.

Women trainees register for a tailor-made programme where the only compulsory modules are ‘Doing business via the Internet’, marketing and the development of the business plan. They have a monthly meeting with an advisor and monthly group sessions focusing on empowerment, the exchange of experiences and presentations.

STEW

Most training starts with the enhancement of personal skills. As these grow, the emphasis moves towards business skills and content.

The trainers are professional experts who bring to the training their daily experience of the business world. Apart from an in-depth knowledge of their sector, the trainers are flexible, open- minded and available to the trainees. Discussion and active learning techniques are essential stepping stones in the training process. In the centre in Liège, particular attention is given to aspects of personal development, such as motivation, expectations, obstacles, communication and self confidence. This part of the programme is seen as even more important than the economic and management part of the course.


In most training programmes, theory and practice are intertwined. Most training is group based, but group sessions need to be supplemented by individual support from counsellors and advisors. Many of the delivery methods promote active learning techniques which encourage lateral thought patterns and an attitude conducive to entrepreneurship.

Often trainers have first to be taught how to use women-friendly methodologies. The German project ‘Women into Business’ shows how training can also impact on a woman’s role at home.

VHS studied the way female and male students started to use computers. Men had a more relaxed way of striking the keys, not bothering what could happen if they hit the wrong one. Women, on the other hand, preferred not to touch anything rather than do something wrong. They immediately started to ask each other for advice and help while men preferred to ask the teacher. Based on these observations, the project promoter, VHS, began working with ‘tandem-

24

learning’. The women participants work in small groups which are asked to gather information and know-how on a given theme. All team members do their research and then explain their findings to each other. Thus they play the role of both student and teacher, while gaining many insights into the learning process.

Whilst the tutors’ assessment and feed-back are essential, the women’s motivation is strengthened by their family’s approval and support. Using their new computing skills at home triggered unexpected results. For once it was the women telling their husbands and sons how to solve a hardware problem or make optimal use of software. They reported how they pushed male family members aside, saying ‘Let an expert see’. The men were at first surprised but finally had to acknowledge the women’s new skills. The women felt very proud of their achievements and showed renewed motivation. The experience also caused the men to think again before doubting and criticising the women’s decision about entrepreneurship.

VHS

In most cases, training is flexible and organised at times that take into account the situation of the women participants. The duration and timing of programmes have to reflect their needs. For example, programmes aimed at women returners should be held during school hours or in the evening when their partners can mind the children.

The initial plan was to run several 26 week courses with 15 women on each course. However, it soon became clear that many women found a course of 26 weeks too long. Some left to take up a job and others left to start their business before completing the programme. The project was unlikely to meet its target number of participants if it continued with the long course, and demand was high. The project team therefore introduced a 10 week day course and an 8 week evening course (4 hours over 3 days/week). These were supplemented with distance learning materials and individual support.


The major component of most business support programmes are group-based activities, including course modules and group work. This is normally supplemented with individual counselling or advice. Other programmes focus solely on individualised support where women are closely accompanied through the business creation process, step-by-step.

‘Vouloir entreprendre - Savoir entreprendre - Pouvoir entreprendre’ (to want - to know how - to be able - to set up in business) are the stepping stones that underpin all guidance and counselling activities of ATHENA, the French partner of the Euro-entreprendre au Féminin network. Most of their women trainees have been out of work for several years and receive the social assistance minimum income. Candidates go through three stages: an intake interview; an individualised training programme; and the development of the business proposal. The initial interview takes place at the premises of ATHENA or wherever the candidate wishes. The aim is to pinpoint her current situation, what type of enterprise she wishes to start and where. In collaboration with the local social service, ATHENA tries to resolve any issues that may inhibit the woman starting her business. The candidate then embarks on her individual programme. Time is taken to explore the motivation of the potential entrepreneur. Although it may seem obvious, this first step is important as many trainees need help clarifying this issue for themselves. Most candidates have a clear impression of their business idea but they have few skills concerning the commercial and administrative aspects of running a business. Transforming their idea into a realistic proposal is the next step. Factors to be taken into account are: whether there is a market for the proposed business product; whether the woman’s individual skills match those required by her business proposal; whether the

25

available resources cover the identified needs; and whether the business has the potential to be profitable. Finally, the programme focuses on the technical aspects of business creation: market analysis and administrative, financial, and legal issues. This leads to the elaboration of a feasibility study and a concrete business plan.

ATHENAWomen entering self-employment have many and diverse needs. However, for women to become effective entrepreneurs in any particular area, programmes must reflect the local economic and social environment, in addition to trying to meet the women’s needs. From the very start, the importance of informal support from the peer group has to be emphasised and developed into networks and business clubs.

The programme offered by the WENT project is continuously refined and developed in response to participant and tutor feedback. Tutors from all modules meet the project manager regularly to discuss issues arising and to agree any changes. A representative of the women participants also attends the meetings. The active involvement of participants helps identify any possible barriers that prevent women successfully participating in the programme. All training takes place in the evening as the women are involved in their business and family responsibilities during the day. It takes place locally except for one module in Women Studies. This takes place at the University, which allows the participants to move out of their environment and integrate with a wider group of students. Transport to the campus is provided for participants.

The project will help the women participants set up a Women’s Chamber of Commerce linked to a regional Women in Business Network. This should enable local business women to meet and give each other support.


2.6. Role of the trainers

Trainers play a crucial role in the holistic approach to training as they need to pay particular attention to the background and personal development of their trainees. They closely follow progress and help identify any gaps that may require additional training or individual support.

The women trainees were qualified but had no previous experience of running a business. They participated actively in decisions about the content and timing of the modules. During the training programme, the Flemish Institute for Independent Entrepreneurship offered management advice free of charge on a pro rata of 4 half days per trainee. The centre’s trainers were professionals working in SMEs who collaborated with the training centre on a part-time basis. They felt that the women developed their business ideas in a different way to men, who tend to put forward an idea and then start immediately. The women asked more questions, more easily expressed their doubts and frustrations, and wanted to check thoroughly any decision they took. This required the trainers to provide intensive and continuous support and coaching.

VKMO

In many cases, trainers are multi-skilled or work in a team that covers different aspects of the training programme.

The training centre, CIDEC, grew out of the University of Labour Market and Enterprise Sciences. It found that many young female graduates in social and human sciences had interesting business ideas but, in most cases, these ideas were never put into practice. Instead the women sought more secure jobs as employees. Focusing for the first time on female entrepreneurship, the training centre set up a team that included:

26

a person responsible for training, training of trainers, networking and support of the trainees;

a psychologist responsible for selection and guidance; and people with expertise in accountancy, internal auditing, evaluation and

administrative support. The centre has ‘an open door’ policy with individually tailored training and advice. Its training programme is constantly monitored and adapted to meet the needs of the women trainees.

CIDEC

Each Centro Vivem has three full-time members of staff: one is an expert in marketing and the economy; another is an expert in human resources and the third provides administrative support. As part of their own training, each team carried out a socio-economic study of their province: including an analysis of the local population, the labour market situation and future trends. The programme also covered issues such as interview techniques, equal opportunities, and training methodologies. The staff of the 8 centres meet regularly to discuss the development of the centres, to develop new training methods and materials, and to exchange experience. These meetings are co-ordinated by the training and employment department of the Women’s Institute. While having a common image, training materials and approaches, each centre has its own characteristics resulting from the specific local and provincial context and the individual members of staff.


Trainers have continuously to update and adapt their own skills to keep in line with the needs of the participants and to develop the most efficient methodologies. If capacity for innovation, lifelong learning and adaptability are key assets of an entrepreneur, the trainers themselves should integrate these in their own training practice.

A key factor of the project is the quality of the trainers, who participate in a training of trainers programme which enables them to experiment with new training methods and to pilot interactive approaches. The trainers fall into two groups: the professional tutors and the mentors who are practitioners from the health and care sector.

TULOSSILTA OY

2.7. Content of the Enterprise Training Programme

Most programmes contain theoretical and practical modules involving topics such as accounting, legal issues, computing , management, administration, finance, commerce, and marketing. In most countries, the theoretical part is necessary to obtain the management certificate that is a condition for business start up. The core of the programme is usually complemented with additional topics, such as rural or local development, or the European dimension.

The Enterprise Training Programme given below may serve as a model for the different subjects tackled in a programme on business creation.

ENTERPRISE TRAINING PROGRAMME

Module One: Thinking about self-employment money, responsibility, organisation, decision-making, hours, planning,

prospects, goals

Module Two: The Feasibility Study Personal Survival Budget

27

Personal Aims and Objectives Marketing - A General Introduction Market Research: Customers & Competitors Legal Considerations: Types of Business Structures, Tax and National

Insurance Preparing Accounts Business Start Up Costs Sources of Finance

Module Three: The Business Plan The Mission Statement: Aims and Objectives SWOT Analysis Your Marketing Plan including the Marketing Mix ( Service, promotion of the business, place of business, price, customers and competition) The Financial Plan involving forecasts of sales, budget, cash flow and profitability Capacity/Resource Planning

LIVERPOOL CITY COUNCILThe Personal Survival Budget forces women to work out the minimum income they need for the survival of themselves and their family. This they should calculate without including any income from their partner or spouse. The idea is to make them fully aware of the amount of money their business will have to bring in to give them economic independence. A business idea is not viable if it cannot provide them with a minimum income. The exercise also gives them an insight into managing a business budget. Many women already have this knowledge from running the household budget but transferring this ‘expertise’ into a business context helps women look at financial issues with less anxiety.

The SWOT analysis is a useful tool to help women identify their own and their business’s Strengths, Weaknesses, Opportunities and Threats. Through this process, the women gain a clear idea of their own skills and competencies, about the advantages of their business, and about any gaps in their training or experience. Seizing opportunities and spotting potential threats are skills that the women should use throughout the lifetime of their business.

Few training programmes offer sector-specific knowledge or qualifications. If a need is identified in this respect, women trainees are directed towards mainstream training providers.

The RAP programme was not long enough to ensure a comprehensive preparation for entrepreneurship. The project therefore relied on the women trainees having sufficient vocational skills and knowledge of the product they wanted to develop. Furthermore, a recent study of failing businesses revealed that a lack of administrative knowledge and management skills were the main reasons for businesses to break down. RAP therefore concentrated on these latter aspects.

VKMO

2.8. Self-evaluation as an ongoing process

Continual monitoring and self-assessment during the pre start-up phase of business creation is an activity that should become a natural ongoing process throughout the life of the business. Regularly checking what has been achieved, modifying the business idea, identifying new training or guidance needs, deciding the next steps is a continuous process which helps women keep track of their progress.

The ongoing process of self-evaluation is an integral part of the training methodology of the Centros Vivem. The women keep a ‘Diary’, which is a personal record of their journey through the training itinerary. Each day, they

28

note what they have learned, how to apply this to their own business, difficulties encountered and solutions found.


Participants have to show on a diary sheet that they have spent at least 20 hours a week on project activities. These may be activities at the training centre or their own research and further development of their business plan.

STEW

2.9. Market analysis

Potential entrepreneurs can buy expertise in market research and analysis, but they can also learn such skills themselves. Conducting market research through interviews and questionnaires will help them analyse their market, but they may need assistance interpreting their findings.

Three participants in the Créatelle project decided to form a business offering mediation and legal advice to tenants and proprietors. As part of their market analysis, they carried out a survey in the Namur and Charleroi area, following up with a second survey a year later. They used friends and relatives to interview people in car parks, homes, warehouses, and so on. People were chosen at random. The surveys pointed to a real need for the proposed mediation service. Of the 520 people interviewed, 90% gave their address and said they would seriously consider using the new service.


Much information on the market situation is readily available at local and regional level but it must be tuned to the needs of the individual business.

Regional market research helped to focus on certain market niches in the service sector. However, the Flemish project felt that both ‘traditional’ and new business ideas could provide opportunities for women. Each woman trainee therefore undertook her own market research as part of her ‘Evolving business plan’. She had to answer the following questions: What specific needs does your business cater for? What are the activities you offer? What external factors do you need to take into account? What market information is available to you? What is your target group? What is your market area? Who are your competitors? Where will you locate your business? Consultants of VIZO, the Flemish Institute for Independent Entrepreneurship, provide feedback on each person’s market analysis.

VKMO

2.10. Practical experience

Practical, hands-on experience in existing firms can provide a more realistic picture of what it takes to run a business. However, some women may not feel sufficiently confident about their business idea at this stage and may need more time to work on it. Others are keen to get on with setting up their own business and prefer to spend time preparing their business plan.

Many women in the pre start-up phase need to gain a very practical understanding of what it might be like when their business is operational. This can be facilitated by a period of work shadowing. For most women this means ‘pairing’ with an established entrepreneur, who is willing to be observed and accompanied for up to a week. The host will also talk through how she developed her business, and describe some of the difficulties and opportunities. Sometimes it is not easy to find an appropriate host. Perhaps the intended enterprise is very specialist or there is potential future competition. Usually an arrangement can be made with an entrepreneur whose activities are not the same, but who shares the

29

same approach or business philosophy. In some situations, women need to spend time with a larger organisation to gain appropriate knowledge (perhaps of legislative aspects, or procedures). This flexible approach to ‘shadowing’ means that each women is able to utilise the shadowing period to her own maximum advantage. Group debriefing after the shadowing allows for exchange and consolidation of benefits.


During the Finnish training programme, the women acquire practical experience by working with future potential clients, such as local authorities, nursing institutions and hospitals. It allows them to gain a realistic idea of what it may entail to run their own business.

TULOSSILTA OY

3. NETWORKING

Networking means using all possible contacts to strengthen the business idea and to support and encourage the woman before and after business start up. Many women embarking on business creation neglect this important strategy which is vital for further development and success. They frequently have little experience of informal networks, such as sports clubs, the Rotary Club, cultural associations, or other clubs. Many women are not used to having ‘professional’ contacts because they have spent some years raising a family, say, or they live in a relatively isolated rural community. They must be made aware of the importance of networking to their business and to them personally. The practice can already start during the course with their fellow participants.

During the pre start-up phase, informal networking is often more important that attempting to gain access to more formal networks, especially as participants’ needs are constantly changing. Two aspects are particularly important. First, workshops or discussions led by existing entrepreneurs enable women to find out about a wide range of business and personal issues related to starting a business. The entrepreneurs providing this input then often act as informal links into their local community and to suppliers or potential customers. Secondly, a strong emphasis is placed on encouraging women to see everyone they meet (in whatever context) as a potentially useful contact. Friends know people, who know people who may become a customer or who could offer useful help. A neighbour may have a relevant contact, the local shop-keeper may know just the right place to buy packaging material, the local restaurant may have new publicity material whose designer you could also use, and so on. This new approach to the familiar is a very non-threatening way to begin networking and it often has very significant results.


Running a business can be a lonely adventure. In addition to support and advice, formal and informal networks can provide up-to-date information, particularly on the relevant economic sector and on access to financial resources. They can also provide access to potential clients.

The Centros Vivem training programmes take place in a group setting. This encourages good relationships between the women trainees and often leads to future commercial ties. In one group, a woman setting up a PR business is producing the promotional leaflets for the businesses of other women in the group. Another woman is exhibiting her wooden handicrafts in the restaurant started by another group member. Other ideas for collaboration abound. For example, the woman with the restaurant may provide dining facilities for the hotel that another woman is setting up nearby. During the start up phase, they can negotiate a ‘friend’s’ price for their services. More formal networks, like the Association of Women Entrepreneurs of Andalucía, have been set up recently.

30

Currently, there are ten such associations of business women spread over the eight provinces and they are considering creating a federation at regional level. Membership of these networks enable women to meet other women entrepreneurs, some of whom could be future clients.


Networking also means making links with existing institutions and mainstream organisations catering for small enterprises. Women entrepreneurs need to inform themselves about the activities of these organisations in order to gain the full benefit of their services. Due to time pressures, most women put networking at the lower end of their agenda. Traditional role patterns still predominate: running a business and managing the home leave little time for other activities. This may also explain why more men than women visit trade fairs. When women do attend these fairs, they tend to put more emphasis on the business aspects of these events than their male colleagues.

4. SUPPORTIVE ENVIRONMENTS - The immediate personal environment

Most women see their business as an integral part of their life rather than a separate economic unit. This view reflects the practical issues many women in business face. For example, they are more likely to combine setting up and running a business with managing a family. In most cases, responsibility for running the household and taking care of the children still falls predominantly on them. The time and energy women can give to their business is therefore severely hampered without support from their husband or partner.

At the end of the course, the women trainees write a letter to their husbands explaining what becoming an entrepreneur means to them. They will need to spend considerable time on their business to make it a success. This means that they and their husband will have to share the family work between them. The letter helps the women and men to begin expressing the concerns each might have about the new situation in their lives.

TULOSSILTA OY

Child care facilities are insufficient in many countries. The shortage of appropriate, affordable care is an issue that many women will need to address before, during and after the setting up of their business. In the meantime, projects often provide modest financial support for child care and for transport if the need arises. Flexible training hours are another way of helping women deal with child care whilst attending the programme.

Liverpool City Council managed to incorporate a small ‘beneficiary allowance fund’ into the budget for its project. This provided participants with additional flexible support that supplemented the existing provision covering child care, lunch and travel expenses. This flexible support enabled the project to: provide additional audio materials to a woman whose first language was not English provide several women with child care during the summer holidays to enable them to carry out their market research provide access to the Internet for several women to enable them to promote their goods and services, to identify potential suppliers, etc. give women access to computers for the production of their business plans and letters give women access to a photocopier for the copying of plans and other business documents

31


Recognising the scarcity of child care facilities in the region, the Women’s Institute established a fund to provide child minding for all the women participating in the programme. The Institute’s initiative prompted the regional authorities to provide the same support for its mainstream courses. This provision is now regulated by law (Decreto 28, 21/2/1995).


5. THE BUSINESS PLAN

The pre start-up training programme ends with the production of a business plan setting out the strategic goals of the enterprise. It identifies the customer needs, forecasts future developments, and plans practical action. It enables both the future woman entrepreneur and others to understand what the business is about and how it will operate. The business plan is never final nor definitive. It is developed during the pre start-up phase and is constantly evolving during the lifetime of the business. It is a tool that helps the woman entrepreneur on a daily basis and against which she can measure her progress or need to change.

Typically, a business plan will include the following headings:

Executive summary Production plan (manufacturing) Table of contents Production plan (retail or service) Description and main aims of the

business Corporate Structure

Product / service Business location Product development plan Employees Description of sector, competition and

risks Financial plan

Sales and Marketing References Sales forecast

Making an effective presentation of a business plan requires the development of presentation skills. The woman trainee must convince bank managers and other key actors in the business world of the value of her business plan. Often the participants in a programme will have thoroughly discussed each business plan before it is presented to a wider audience. Sometimes the women’s partners and family are invited to the presentation of their business plans, which gives them a good opportunity to demonstrate their professional approach towards business creation. In other cases, the presentation is a formal event involving a jury of bankers, entrepreneurs, trainers and staff of the Chamber of Commerce.

The Centros Vivem organise a final presentation for all the women participants. The aim is to assess the women’s business plans, to strengthen the commercial and communication skills of the participants, and to publicise their new businesses. Before this, however, it organises an informal presentation with family, friends, programme managers and local decision-makers. This acts as a dress-rehearsal for the final presentation. Each woman makes a 10 minute presentation of her product or service. After asking questions, the programme’s team assesses the marketing plan, the legal plan, the human resource component, the financial-economic aspects, the coherence of the business plan and the overall structure and presentation of the proposal.


32

As well as being a training activity in itself, presentations of business plans can be turned into an event that contributes to creating a positive image of female entrepreneurship.

At the end of the project, prizes were awarded for the best entrepreneur to emerge from each project in the transnational partnership. In each country, a jury of business people assessed the candidates according to criteria, such as innovative business idea, quality of the business plan, the capacity for taking initiative, motivation and the matching of the person with the business idea. The ‘Creawards’ in Liège brought the seven winners together in an official ceremony at which they all received their award of 60,000 BF (1,500 ECU). Gaining much press coverage, the prizes boosted the image of female entrepreneurship and provided an excellent opportunity to raise the visibility of the newly-created businesses.


THE DURING START-UP PHASE : FINAL COUNTDOWN TO BECOMING AN ENTREPRENEUR

This phase starts with the consolidation of the business plan (the first draft of which is the final stage of the ‘pre start-up’ phase). It ends with the actual launch of the business. In general, this phase is short, but it may stretch over many months. In the case of women heading for self-employment, it is usually longer and merges into the launch of business activities. The reason for this difference is that the change to self-employment does not require official registration but depends on finding customers and contracts to provide the expected income.

Supportive infrastructures like business incubators speed up the launch, making it more efficient and less stressful for the individual woman entrepreneur. The Italian project, Incubatore ImpreseDonna, achieves this with loans for start-up capital guaranteed by the city of Bologna. Such loans make it easier for women to negotiate with banks for the additional finance their business requires. By providing affordable office space, incubators also cut out the time-consuming search for suitable business premises.

Important milestones during the start-up phase are:

1. Consolidation of the business plan2. Operational Plan 3. Access to Finance

3.1 A ‘Women Only’ Provision3.2 Start-up capital3.3 Guarantees & Collateral3.4 Other sources of capital3.5 Income and Wage Subsidy Programmes

4. Support for legal and administrative procedures5. Networking, building teams and partnerships 6. Supportive Environments

6.1 The immediate personal environment6.2 Local infrastructure for business support

7. The Launch of the Business

The methodologies used during the pre-start-up phase continue. They include individual counselling, guidance, highly-focused training sessions, and the updating, improvement and initial implementation of marketing concepts.

33

1. CONSOLIDATION OF THE BUSINESS PLAN

The first step is to screen and revise the business plan in the light of the progress already made by the entrepreneur. She has to check whether the financial feasibility is sufficiently convincing. What are the latest figures for investment and running costs? What does the predicted balance sheet look like for the first, second and third year of the new business? Are her assumptions realistic regarding productivity, pricing and costing, market share and cash flow? How does the development of the business change according to the best and worst case scenario? Does the business idea clearly point to progress and success without sounding overestimated? Is she confident that her business plan really addresses every aspect of her proposed business, so that it will withstand the scrutiny of bankers and public authorities?

Projects ensure that the potential entrepreneur can start testing her business plan in a safe environment. The first audience is often the group of women who have been participating in the enterprise training. Such group screenings build on the personal support and networking developed during the pre-start up phase. They result in constructive feed-back on the viability of the business plan and on the woman’s presentation of it. The project staff, experts and the personal advisers allocated to each woman provide a second level of screening. Expert advice may be sought from representatives of local or regional agencies for economic development, SME advisors from Chambers of Commerce and crafts chambers, bankers, estate agents and tax advisors.

A professional business consultancy makes an important contribution to this German project. The consultants have a long experience with business creation and with counselling unemployed people. They take account of factors such as women’s need to reconcile work and family life, or the impact of living in a rural area with little public transport and no information or counselling infrastructure at hand. The consultants provide individual guidance throughout the 12 week course and participants can continue using them even after completion of the course.

VHS

The business plan is a working document to be constantly updated and modified throughout the life of the business. However, the Dataweb STEW project in the Netherlands sees the consolidation of the business plan as a hinge point in the participants’ development. It therefore uses an exercise that allows participants to thoroughly scrutinise their business plan. Depending on the outcome, participants either start the process of launching their business, decide they need further training or support, or conclude that their business idea is not viable and that they must consider other options. In the exercise, participants develop indicators for a successful business plan and analyse each other’s plan in a group discussion. Aspects they consider are: commercial and financial feasibility; whether the proposed venture matches the personal qualities of the potential entrepreneur ( experience, motivation, ability to take risks); clarity of objectives; and the capacity of the business to ensure economic independence. The business plan should be consistent and well presented. The next step involves a role-play where the group is split into two sub-groups : assessors and entrepreneurs. Trainers and two or more advisors form the jury. Depending on the quality or advancement of the business plans, the jury comprises either staff from STEW or experts from outside, such as bankers, business advisors or experienced entrepreneurs. This is a rigorous process and the women are given deadlines and enter into commitments to overcome any shortfalls in their plan.

STEW

Clearly, projects that include local partnerships with banks, municipalities, Chambers, business colleges and experienced entrepreneurs can offer practical support by

34

channelling extremely valuable expertise directly to women entrepreneurs. This is especially important concerning sector specific requirements. They are a major element for consolidating the business plan. In the textile sector, for instance, newcomers have to show that suppliers will provide them with the necessary materials. In the construction industry, a new business cannot be deemed viable without signed letters of intent from suppliers and sub-contractors. This procedure is easier when outside experts are part of the supportive framework for the project.

The multi-regional project, Ecology, Equality, Employment, run by Crasform in Italy, is active in the growing area of ecologically-sound architecture and construction. Participants use simulation software to draft their first business plan, which is screened by a group of local and regional experts. As there was no appropriate software package for this specific sector of the market, Crasform developed its own software which it will donate to the Italian League for Environmental Protection (Lega Ambiente) for wider dissemination. The network of key actors set up in all the regions covered by the project provided valuable input for the development of the software.

CRASFORM

Neither education, qualification nor age appear to affect the quality of business plans. Women with fewer qualifications succeed in writing business plans which are as complete and convincing as those developed by university graduates. Of course, highly qualified women are more articulate and cope more easily with the legal and administrative aspects of the business plan. However, the provision of additional support can ensure that women with fewer qualifications are not at a disadvantage. It is also sometimes the case that the entrepreneurial skills of women who have worked in the informal sector are more developed than those of highly-qualified women. In the long run, however, research indicates that better qualified women tend to develop more successful and healthier businesses.

2. THE OPERATIONAL PLAN

Efficient planning is paramount during the days, weeks and months before the launch of the business. After formulating the business plan and deciding finally to create a company, an operational plan should be drawn up of all the tasks and activities which must be completed during this final count-down period. This will include: commercial and insurance contracts; book-keeping; company name, logo and stationery; public relations and advertising; budget for the launch. The potential entrepreneur must also remain open to new information and situations that may require her to modify her original plans. At this time, projects can help the women define their operational objectives and to set out an appropriate time frame.

The Incubatore ImpreseDonna helps the women draw up an operational plan with deadlines for each decision and action they must take. It spells out the support they will receive from the Incubator and allocates staff to help each entrepreneur. Despite all this help, it is important that the woman entrepreneur fully owns her plan.

A company advisor is a consultant who helps the entrepreneur, or the group of people forming the new company, to define the contents and schedule of the operational plan. The advisor monitors progress, assesses the overall effectiveness of the actions, and checks whether any changes are needed to the original plan.

A personal tutor checks whether the entrepreneur needs any additional support in terms of developing her capabilities in any particular area. The tutor also co-ordinates the work of the specialists helping the entrepreneur.

A group of specialists provide support for the different parts of the operational plan.

35

The main steps in defining the operational plan are:

1. Needs Analysis - having decided to establish her company, the entrepreneur describes her needs and difficulties to her company advisor and personal tutor. They assess whether she needs additional support that she has not identified for herself and discuss with her a draft plan of action.

2. Planning - The entrepreneur meets the project manager and her tutor to define the operational plan in detail.

3. Action - the entrepreneur gradually carries out her operational plan while meeting the various specialists at regular intervals.

4. Monitoring - The company advisor and personal tutor monitor progress and discuss any changes they think may be necessary.

5. The operational plan ends with the launch of the company.INCUBATORE IMPRESEDONNA

Incubators and agencies offering a comprehensive range of services can provide a far more effective support to potential entrepreneurs than different agencies focusing on separate aspects of the operational plan.

The DATAWEB project is run by CREATIVE, in partnership with the Greek mainstream agency for SME support, EOMMEX. Its activities include an incubator which targets women who have recently set up in business or who are just getting started. The incubator provides access to documentation and information, including access to computerised databases and World Wide Web pages on the Internet. Facilitating contact between the women and relevant business development agencies in Thessaloniki is also a vital role of the incubator. Its objective is to help women know where and how to get information and assistance, and deal with any bureaucratic procedures.

The incubator has office space for 10 women. It includes two fully-equipped computer systems, with access to the Internet. The incubator also has fax, photocopying and video conferencing facilities. Users have access to secretarial assistance and help in drawing up, lay-out and desktop publishing of simple publicity material. The centre’s facilities are available during office hours, free of charge. The women can also obtain individual guidance by appointment, two mornings or any afternoons each week. The six specialist advisors give help on issues such as finance, legal matters, marketing, computing, exporting, entrepreneurship and personal development. The incubator provided a total of 500 consultancy hours in 1997, averaging 10 hours per user. In addition to practical and technical services, the incubator runs workshops on specific themes for groups of 2-6 users.

CREATIVE

An important part of the operational plan are marketing activities, which must start well before the launch. By this time, the entrepreneur must have made a final choice of company or brand name.

Choosing a name for your company or product is a choice for ever. You cannot change it easily. It will be on your letter head, business card, product labels, official documents. This important choice needs much thought. Besides seeking feedback from potential customers, you must check relevant business directories to see whether the name you have chosen is already used by other companies. This is especially relevant for companies whose activities may harm your own image or create confusion about your product. In many countries, brand and

36

company names may be protected by law. Make sure you use these regulations to protect your own chosen name and do not use a name already licensed to someone else. Last but not least, check whether your chosen name works in other languages.

CRASFORM

Public Relations and advertising activities targeted at future customers can be fairly simple, or use the latest technology. Some projects provide access to the Internet until new entrepreneurs have their own facilities. Most help women with more traditional methods, like direct mail and leafleting.

The Swedish project, Women-friendly Finance, includes an introduction to marketing and advertising in its business creation training package. With their product or service in mind, the future business women use the computer modules to develop their ideas. Soon they can produce their own leaflets for direct mailings or design and lay-out small brochures and other PR material.

One woman runs a small craft supplies shop from her home in the countryside. Initially she targeted the local community where knitting and needlework is a tradition, especially during the long, dark winters. She then realised that many tourists who come for summer hiking or winter skiing are keen to buy her wool and materials. She therefore rented a display window in the village centre to display her products. She has also found that one of the best ways to market her products and get good PR is to participate in the local handicraft fairs. She finds that word of mouth by satisfied customers is at least as good as leaflets and brochures.

NÄTVERKSBANKEN

Besides advertising, direct contacts with the media are paramount for a successful marketing strategy. Consumer surveys indicate that most people rely more on information gained from articles in newspapers or magazines than advertisements.

Crasform understands that women’s businesses cannot always afford expensive PR and marketing agencies. However, they can use low cost marketing tools such as articles in local, regional, or even national newspapers and magazines, or items in radio and television programmes. They must take account, though, of the audience targeted by the relevant media. For instance, a publication on environmental protection may be interested in publishing an article on new eco-products. If appearing on television, the entrepreneur should offer visually interesting images, not just a person talking. It is also a good idea to include lots of happy, satisfied customers using the company’s products.

The most important rules are: to make and maintain contacts with journalists and media people; to write good press releases clearly conveying the business or product message; to have a reliable communications expert check all media presentations.

CRASFORM3. ACCESS TO FINANCE

Financial support for business creation and SMEs exists in all Members States. NOW projects provide their participants with current information and, more important, accompanying them through the often complicated and lengthy application procedures for the various funding instruments. At this stage, it is important to differentiate between:

access to investment capital (subsidised loans) access to income and wage subsidies

37

3.1 A ‘Women Only’ Provision

Though access to finance is one of the biggest obstacles to women’s business creation12, only one NOW project focuses predominantly on this key area. The revolving fund created by the Swedish project, Nätverksbanken, is based on a completely different idea of ‘banking’, developed in the late 1960s by the Grameen Bank in Bangladesh. Revolving funds mean that small loans can be made without collateral. They are used successfully in so-called Third World countries.

Women-friendly finance helps women who would normally be turned down by banks. Their business plans may not meet the banks’ normal criteria and their credit needs may be regarded as too small. The Swedish Government has made available a fund of 600,000 SEK (68,500 ECU), with which the network bank makes loans to potential small business owners with professional experience and knowledge, and therefore good prospects for success. The target group are women requiring an investment and start-up loan of 50,000 SEK (5,700 ECU) or less. The borrowers are organised in groups of five women who train together and receive support for the implementation of their individual business ideas. In practice, the bank lends money to the group and not to the individual woman. The system is constructed so that only two or three women in the group can have a loan at any one time. The group subjects each business plan to a severe examination and decides democratically which business proposals to select first. The remaining members of the group cannot have a loan until the first round has paid back part of theirs. This means that the group assumes joint responsibility for the repayment of loans made to individual members. The group agrees repayment plans, and the borrowers commit themselves to regular compliance. Not everyone in the group may need the maximum loan of 50,000 SEK. In this case, there may be enough money to serve the needs of four or even all five members.

NÄTVERKSBANKEN

A few Member States have funding programmes especially for women’s business creation and growth. Some give priority to women in their income or wage subsidy schemes. Examples of such government programmes exist in France, Italy, Portugal, Sweden and Lower Saxony in Germany. Other funding programmes have been created by non-profit organisations, women’s NGOs and grass roots groups, such as in the Netherlands and in Spain.

For various reasons, women may not have the status of being registered as unemployed. Thus, they have difficulty accessing government programmes designed to promote business creation as a solution to unemployment. Financing tools created by NGOs appear to be viable alternatives but are much smaller in scope and accordingly can support only small numbers of women entrepreneurs. MAMA CASH, a non-profit organisation in the Netherlands, provides small loans up to 50,000 fl (22,500 ECU) as seed capital and liability guarantees. The idea is that this small sum of money replaces the personal savings that banks normally require as part of loan schemes. Thus, the loan from MAMA CASH opens doors to regular banks, without the usual collateral requirements. SORMENTOR FONDS, established by women professionals, works on similar lines and provides guarantees up to 17,000 fl (7,600 ECU).

In the framework of the European Third Action Programme for Equal Opportunities between Women and Men, the Local Employment Initiatives (LEI) Network13 operated a grant system with a similar approach and philosophy. Women were awarded grants of 3,000-7,500 ECU, this being 1,500 ECU for each job created by the new business. Over

12 European Commission, DGV: Recherche exploratoire sur la création d’outils financiers en direction de l’entrepreneuriat féminin en Europe, Brussels, 199713 European Commission, DG V: Five Years of Achievement - an evaluation, LEI 1991 - 1995, Brussels 1996

38

the period 1991 to 1995, the Network attracted roughly 8,000 applications from women’s businesses across Europe. It awarded 1,635 grants.

3.2 A sound financial base: Adequate start-up capital

Access to credit is very difficult for micro- and small business start-ups. This applies to both women and men. Except for intermediary (public) institutions handling government loans on a local, regional or national level, credit provided by banks is mainly geared to the needs of large companies. The application procedures are often complex and based on established principles.

Women tend to seek smaller loans than men. This is partly due to the small size of their venture, and partly because they are cautious and sometimes underestimate their financial requirements. However, banks often appear reluctant to consider applications for small loans. The approval procedure is the same as for larger loans, requiring the same amount of work, but the bank’s commission is considerably less. The consequence is that women often take out small personal loans on less favourable conditions (higher interest rates, and shorter or no period free of repayments). In some countries, this may prevent women gaining access to and benefiting from the publicly subsidised loans that are administered by banks.

In addition, banks often seem reluctant to make loans for businesses that are unusual or in sectors undergoing structural change, such as the traditionally female textile sector. Many women’s businesses are also linked to virtual and intangible products. The standard loans procedures are not necessarily appropriate for many women’s business proposals so they may fail to receive full consideration. Banks have more difficulty assessing the viability of such enterprises, compared to those operating in an industrial or manufacturing context.

A participant in a Belgian NOW project had identified a local market for meditation classes. She applied to the bank for a small loan but her application was turned down. The bank did not think her business proposal viable. The project made enquiries and discovered that the bankers knew little about the woman’s product and the growing market in holistic health services. Another participant wanted to set up a studio for designer hats. Her business plan was accepted on the basis of her professional skills and the high quality of her product. This was surprising as few people wear hats these days and the hat market has been depressed for some time.

VKMO

In Belgium, Germany and Sweden, programmes supporting the creation, consolidation and growth of SMEs provide subsidised loans as seed and start-up capital. In most cases, the programmes are administered by regular banks. They mostly fund: investment costs for buildings, equipment and machinery; the first stock of working materials; and product development costs. Some programmes offer highly favourable terms requiring the repayment of only 60-80% of the sum borrowed, with generous periods for repayment.

In northern Europe, government support for business creation and SMEs mainly takes the form of tax relief and subsidised loans administered by banks. Grants may also be available. In the south, due to the much higher interest rates for borrowing money, governments frequently opt for grant schemes and so-called loans on honour (without guarantee) administered by intermediary organisations. In Italy and Greece, for example, grants cover a range of activities, including training, consultancy services for market research, participation in trade fairs, investment in new technology and environmental protection. As far as statistics on the use of these programmes are available, they indicate that participation rates for women are far lower than for men.

39

Even though regulations concerning funding appear to be gender neutral, their implementation often discriminates indirectly against women. The more substantial funding programmes offering major loans on favourable terms are often restricted to companies with more than 250 employees. They target growth sectors like research & development, advanced information and communication technologies, and certain large-scale eco-technologies. Yet most women’s businesses emerge in sectors such as small commerce and trade, health and care services, tourism and small scale eco-technology. Only very recently have a few women entrepreneurs entered areas like engineering, high technology, financial services, international trade or research & development. Clearly, SME funding programmes do not appear to take into account the needs of typical female small businesses.3.3 Guarantees and collateral

Guarantees and collateral are another major area of difficulty for women. Borrowing money to set up a business means entrepreneurs must have some financial backing of their own, for example, personal savings, contributions from business partners, or loans from friends or family. Normally, the ‘personal’ finance matches the amount borrowed from the bank. This requirement for matched funding is reinforced by credit regulations that say a loan should cover only 50 or 75% of the necessary start-up capital. Creators of micro-businesses, especially those coming from a situation of unemployment, face major difficulties when attempting to use this classical funding model. This is even more true for women, whose personal savings are generally less than those of men. When men set up in business, their wife normally agrees to their pledging the family assets as collateral. Experience shows, however, that women have a much harder time convincing their partners to do the same. Banks usually accept only traditional forms of collateral, such as property or life insurance, but some examples of more innovative models of collateral are emerging. For instance, contracts for future work may be ac-cepted as a guarantee for a loan.

Five women decided to set up a business based on the direct marketing of fresh organic produce. The idea was to attract customers who would take six-month or annual subscriptions for weekly baskets of seasonal fruit and vegetables. The women rented part of a large, formerly state-owned farm located 60km from Berlin. They invested their savings in the modernisation of the farm and borrowed money from family and friends to buy essential equipment. As the baskets are delivered to various pick-up points throughout the city, a truck was an absolute necessity. However, finding money to buy the truck turned out to be an obstacle that threatened the whole venture. Without collateral, no bank was willing to lend them the money. The only guarantee they could offer were the subscriptions of their customers. With the support of their regional Equality Advisor, they succeeded in convincing a co-operative bank to accept 200 annual subscriptions as the necessary collateral.

BIO-BÄUERINNEN

In many Member States, such as Germany, Greece, Italy, the Netherlands and the UK, local, regional and national authorities have set up guarantee funds for SMEs. When a bank decides to make a loan based on its assessment of the viability of a business plan, the guarantee funds provide a guarantee for up to 70% of the loan.

3.4 Other Sources of Capital

Women can only rarely source capital other than through subsidised and normal bank loans. Venture capitalists and ‘business angels’ in particular are an alternative source. Sometimes people invest modest sums in businesses whose aims and philosophy they share. Others may invest money to reduce their tax liability, counting on the new company needing a couple of years to reach break-even point. Yet others are successful business people who can afford to risk investing in a small company knowing that, if it survives the difficult first few years, the return on the original investment is likely to be very high. To encourage potential angels and therefore generate additional funding for

40

economic development, the UK Government set up the Enterprise Investment Scheme to provide attractive incentives for angels. Various networks have also sprung up across the country to introduce private investors to businesses whose size or business idea would not secure them a regular bank loan. Such funding can boost the start-up capital and result in banks agreeing more generous overdraft facilities. Cash flow can be a major problem for small companies who need to purchase of materials and pay personnel costs months before payments come in from customers.

The First Step Foundation in Ireland is an example of an ‘alternative’ lending organisation. Established by a rich benefactor to help businesses start up, the Foundation provides seed capital in the form of interest free, three-year loans. It is supported by the Irish Government and the Bank of Ireland which matches every pound put in by the Foundation. A third of the applicants are now women, which represents a steep increase over the last few years. This partnership shows how the impact of an individual initiative can be greatly enhanced by the support of key actors in the public and private sectors.

BANK OF IRELAND, participant in seminar

The ‘Aunt Agatha’ Regulation in the Netherlands helps new entrepreneurs get loans from family and friends by granting tax relief to both borrowers and lenders. Income from interest up to 5,000 fl (2,250 ECU) is exempted from tax for the first eight years of the loan. During this period, the loan is not taxed, as it is regarded as business capital. An official loan agreement must be signed and loans can be used only to pay for investment costs, and not to cover a previous loan.

SMEs can also benefit from out-sourcing and out-contracting by large corporations. Lean management and lean production are a key strategy for being competitive in the global market place. In order to get this process underway, companies encourage their employees to set up small companies to which they sub-contract certain services. These range from cleaning and catering to manufacturing or providing administrative and financial services. In other cases, they look to SMEs to become business partners, who will supply them with products and services on a regular or occasional basis. Sometimes the larger companies will make loans or credit facilities available during the development of such partnerships.

Another way of obtaining funding is through public sector procurements. They form a huge market for large companies and SMEs, and can act as a guarantee for bank loans. In some countries, women-owned businesses are encouraged to apply for government contracts, but the overall picture indicates that this is still dominated by existing large companies. Nevertheless, in the context of deregulation, public procurement increasingly covers activities more relevant for women.

The privatisation of parts of the public sector led the Berlin Government to out-contract its canteens. In some ministries, they are now run by a social economy company whose aim is to create jobs for unemployed young people. Funding from Government and National Employment Office training and employment programmes enabled the company to set up small restaurants in several districts of the city. They offer subsidised meals for disadvantaged people and market-priced catering services to private and corporate customers. The government contract for the canteens was accepted by a bank as guarantee for the loan needed to purchase modern kitchen equipment, which was a key element for competitive pricing. The contract has thus enabled the social economy company to become a viable undertaking.

SCHILDKRÖTE GmbH

3.5 Help with Survival: Income and Wage Subsidy Programmes

41

Many NOW projects use funding programmes that subsidise the income of the new entrepreneur and the wages of her staff. These programmes reduce personnel costs during the first crucial phase after start-up. Many women’s businesses in the service sector have little need of costly investments and therefore cannot benefit from subsidised start-up capital and loans. For such businesses, income or wage subsidies are especially relevant. They can ease considerably the period of getting settled into the market. In Member States such as Germany, Ireland, the Netherlands and Sweden, instruments of passive labour market policy are turned into proactive tools for job creation. The new entrepreneur’s income may be subsidised over a restricted period of time, usually six months. In Spain, people setting up a business or co-operative can capitalise their unemployment benefits and invest them in the new venture. Programmes in Greece target unemployed people in general, but give priority to people under 25 and people unemployed long-term, made redundant or living in areas of high unemployment.

Schemes in the Netherlands and in Ireland allow for some flexibility. The entrepreneur’s income is matched by unemployment and welfare benefits, which are gradually reduced. This ensures that entrepreneurs have a basic survival income while getting their business off the ground. The Dutch scheme also includes start-up loans for welfare recipients setting up in business.

The Start-Up grants in Sweden can, after an assessment of the viability of the business, be extended by another six months. Promoters supporting business creation by women fear that the screening procedure places considerable emphasis on growth. This implies that the micro- and small businesses characteristic of women are expected to be profitable after the first year, whereas it is accepted that larger companies normally take some years to reach break-even point.

Wage subsidy programmes aim to stimulate employers to recruit long-term unemployed people, particularly those having major difficulties entering the labour market. These programmes can considerably help new entrepreneurs recruit and finance their first staff. In Germany, the National Employment Office and some Länder programmes provide wage subsidies, giving priority to single parents, people unemployed for more than 2 years, and unemployed people whom it is more difficult to place in jobs (women over 45, men over 50, young people under 25).

A small enterprise producing ecological clothing for children emerged from a German project, co-financed by the European Social Fund. The project had trained 40 women for the different jobs required by such businesses. Four women set up the limited company and created jobs for nine other participants. The four entrepreneurs share management responsibilities for marketing and distribution, product development, styles and pattern making, production, finance and personnel. They could not obtain any income subsidies for themselves because, as beneficiaries of the project, they were not regarded as unemployed when setting up the company. However, their nine employees had returned to unemployed status after completion of the project so they could obtain wage subsidies for three of them, because two women were over 45 and one was a single mother. These subsidies, covering between 50 and 75% of the women’s salary, helped the small company to survive during the difficult first years.

YOYO KID

The Swedish government funds similar schemes for unemployed people (with at least 6 months of continuous unemployment, 4 months for young people under 25), unemployed graduates and people with a disability. The employer can receive 50% of an employee’s salary, up to 350 SEK (40 ECU) per day. Employers can also pay a small fee and hire trainees for a period of up to 6 months, with their salary paid by the Employment Office.

42

In launching their business, new entrepreneurs have to cope with a variety of administrative procedures, many of which are complicated and time-consuming. To help them get their business onto a sound footing, and encourage the creation of more jobs for unemployed people, income and wage subsidy programmes must be easy for entrepreneurs to access.

4. SUPPORT FOR LEGAL AND ADMINISTRATIVE PROCEDURES

This part of the planning process covers two major issues: the advantages and disadvantages of the different legal forms of small business; the administrative procedures that new businesses must follow.

Potential entrepreneurs become familiar with the different legal status and forms for businesses as part of their training during the pre-start-up phase. As they approach the launch of their business, projects provide up-to-date information and advice on the most suitable form of business or small company, with the main objective of minimising the risk for the individual woman. Sometimes the choice of legal form may be changed at this late stage in order to be eligible for certain funding programmes. Projects also involve legal experts in drawing up any deeds of partnership.

Most micro and small businesses are ‘single person enterprises’ or sole traders. The same is true for businesses emerging from NOW projects. Like self-employment, this legal status implies total liability involving both business and private assets. Due to a lack of capital, two or more women starting a business together tend to opt for a formal partnership arrangement as these have no requirements concerning initial capital. However, they imply total liability for all the partners. Family and friends who have lent money to start a business often become silent partners. Men, on the other hand, choose to set up joint stock companies, which limit liability14. In some Member States, tax regulations influence the choice of status.

In most Member States, the status of a limited company is a good choice, as it restricts liability to the initial capital invested. However, even for a limited company to be granted a loan, banks will mostly insist that the partners provide a personal guarantee.

Legal forms like the GmbH & Co KG in Germany link the limited company to a limited partnership. They allow venture capitalists to invest money in the company. This enables them to benefit from short-term tax relief and longer-term profit sharing, without being integrated into the company’s decision-making process.

A German company producing clothes for small children needed an initial investment of over half a million DM to cover equipment and manufacturing materials. The company expected a 6-month lead time before receiving any income from the clothes. It used a subsidised loan of 400,000 DM (202,500 ECU) from the bank to buy equipment. There remained insufficient money or overdraft facility to purchase materials. With support from their ESF co-financed business creation project, the women entrepreneurs changed the legal form of their business from a limited company to a GmbH & Co. KG. A publicity campaign attracted people willing to invest in the new business as limited partners. Initially these were women from various regional and national networks who put in small sums between 3,000 and 10,000 DM (1,500-5,000 ECU) . As the campaign got going, more affluent people from the world of business, the media and the professions invested larger sums. Thus an extra 200,000 DM was raised.

YOYO KID

Complying with the administrative and legal requirements of setting up a business is a challenge. The legal, fiscal and administrative environment is increasingly complex. The

14 Muir op. cit. UK Federation of Small Businesses op. cit.

43

total annual administrative cost of enterprises in Europe is estimated at between 180 and 230 billion ECU. SMEs bear 96% of the cost. A small business with nine employees, for example, devotes 62 hours per employee to administrative formalities. For large corporations, it is only 5.5 hours. The administrative cost per employee is therefore more than 20 times higher for SMEs.

Comparing the situation in the different Member States, large differences become visible. These are rooted in sector-specific traditions or in vocational training systems. In Italy, a small business working in the construction sector and employing several workers can easily employ one person full-time to deal with the paper work necessary to comply with tax law, health and safety regulations, social security, procedures related to the opening and closing of construction sites, etc.

To open a construction site in Italy, a company must provide social security cover for its employees. This procedure consists of notifications to four different public institutions to be drawn up with different deadlines. When the work at the construction site is completed, the employees have to be dismissed, with again four different notifications. This is only the beginning of a difficult pathway littered with more than 80 annual deadlines for different kinds of taxation, including value added tax, corporation tax and local tax.

CRASFORM

German entrepreneurs must also comply with strict administrative and legal procedures, especially concerning the professional certification required to start and run a business in certain industrial and craft sectors. Every entrepreneur, including those working in the professions, must be a member of a Chamber. There are crafts chambers, chambers for industry and commerce, medical doctors chambers, lawyers chambers. Chambers are legally responsible for the registration of businesses and professions. The impact of tradition is strongest for craft enterprises. For 130 out of 180 legally-recognised craft occupations, the owner or director must prove that he, she or an employee is a crafts master in order to be licensed as a company. For women having worked as assisting spouses or even co-owners of crafts enterprises, this requirement becomes an enormous obstacle if the husband dies and they aim to carry on the business. To become a crafts master (Meisterbrief) takes considerable time and experience. Women have particular difficulty aspiring to this high qualification as they are less likely than their male counterparts to be kept on the pay roll after the completion of initial training. Only since 1996 has the government offered grants for those seeking this kind of professional qualification as a requirement for setting up in business.

Regulations are less strict in the field of commerce and industry where a Meisterbrief is not a requirement for business creation. Nevertheless, even if the Meisterbrief is not necessary, hurdles exist concerning access to capital and using certain legal forms. The ‘Open Trade’ form of company in Germany and the Netherlands requires business owners to have qualifications in business or commerce, but has no minimum requirements for start-up capital and provides access to some especially favourable loan programmes.

In Sweden, procedures are less complex and can serve as models of good practice. The registration of a business requires the completion of a two-sided form at the local tax office. This registration covers taxes, social insurance and VAT. Advisers are available to help and provide detailed information. The form acts as a ‘preliminary’ income declaration, asking for an estimate of income and profit during the first year. After a few weeks, entrepreneurs receive notification, with a number, which serves as a permit to commence business. At the end of the first year, more detailed information is required which is compared to the initial estimates. Businesses must inform the relevant authorities when employing new staff but, unlike other Member States, they only need make an annual return. In1998 the social security and VAT systems will be linked so that a credit for one can be counted against a debit for the other.

44

5. NETWORKING, BUILDING TEAMS AND PARTNERSHIPS

Joining forces makes you stronger. This strategy is obvious but businesses do not find it easy during the start-up phase. Linking small businesses can make them more viable. This requires building confidence in each other, mutual understanding of business ideas, shared philosophy and ‘personal chemistry’. The Incubatore ImpreseDonna in Bologna finds that partnerships or joint ventures exist much more in theory than in practice. In order to be successful, the partners’ products and services should be complimentary and give customers extra advantages when they are bought as a package.

The Emilia Romana Nature Park wanted a video for PR and marketing purposes. The project encouraged two women entrepreneurs to join forces in order to tender for the contract to produce the video. Offering top expertise in video production and geodesy, plus a reasonable price and the high flexibility typical of small companies, they fought off tough competition and won the contract.

INCUBATORE IMPRESEDONNA

Projects must build on the relationships with key actors, such as municipal and regional authorities, Chambers of Commerce, local or regional development agencies and banks, initiated during the pre-start-up phase. They should now use their contacts and networks to help women entrepreneurs during the next stages of business creation. In some countries, the Chambers of Commerce are responsible for assessing applications for SME funding. Local development agencies can support an application for a bank loan by writing to highlight the relevance of the business for local development. Local authorities can help guide women through any administrative procedures. Experienced business people can provide valuable personal support by acting as mentors during this challenging time. The local press may be interested in featuring some of the emerging businesses.

A different team building effort is required if the new business is a small company or a co-operative. Here the recruitment and integration of people into their future work place is of great importance.

Small and micro enterprises need specific marketing expertise but they usually cannot afford a full-time marketing manager. With funding from the LEONARDO programme, the Italian incubator project has developed a professional profile for a marketing co-manager, who can be involved directly in company life, and work for several enterprises at the same time. This enables two or three women’s enterprises to share the cost of a manager and meet their need for professional marketing and product promotion, which is often absent in SMEs.

The marketing co-manager works with each woman to design a marketing and promotion strategy for her company. He is then responsible to her for the implementation of the strategy. Delegating important tasks is not easy for women entrepreneurs, who are used to carrying sole responsibility for many aspects of their life. Therefore, learning to use a co-manager is an important part of the project.

INCUBATORE IMPRESEDONNA

6. SUPPORTIVE ENVIRONMENTS

6.1 The immediate personal environment : partners, family, friends and local community Many women setting up a business need help dealing with the home situation. Husbands and family may have expectations related to the traditional role of wife or

45

mother, which the woman entrepreneur is increasingly unable to meet. A family’s non-acceptance of the women’s new role as entrepreneur, of conflicting demands on her time, and the challenges of running a business can create considerable stress. The situation can become more difficult if financing the business start-up involves the husband guaranteeing a loan or pledging family assets. Projects must develop a strategy to give women support from the very beginning, being sensitive their specific social and cultural contexts. The women often gain confidence by sharing experiences with other participants in the project.

Most training and project meetings take place as block seminars over the weekend and the following Monday. Participants sometimes live more than 100 km apart so this is the most efficient way to arrange the courses. All 15 participants stay overnight so there is much networking and discussion during the evenings. In Sweden, financial matters are considered a very private affair so it is not surprising that participants are unwilling to discuss finances and related problems during group meetings. As there is little time during the weekends for individual support, the project director visits each woman at her home or business. This provides a valuable opportunity for the women to discuss their financial and personal situation openly. Most of the women live in rural areas where attitudes about a woman’s role remain very conservative. To start a business is unheard of. Even getting full support from her husband and immediate family is sometimes hard. The project director therefore uses the visit to discuss how the women might handle any conflicts arising from traditional role expectations.

NÄTVERKSBANKEN

6.2 Local infrastructure for business support

When setting up a business, entrepreneurs throughout Europe have to go to a variety of organisations and agencies for information and to finalise the legal and administrative procedures. Several NOW projects have explored ways of alleviating this time-consuming procedure.

Experts from different institutions and agencies act as trainers or advisors in the German project co-ordinated by VHS. This saves participants lengthy trips to the town which is the region’s administrative centre. Most of the information they require is found within the project itself. In addition, participants meet the experts in the familiar environment of the project, which is quite different to meeting them in their office. Once participants have completed all the necessary paper work, they arrange visits to the relevant authorities, which they then perceive as less threatening because they are well prepared and meet familiar faces.

VHS

The French project, Euro-Entreprendre au Féminin, co-operates closely with different key actors in the local business community. These contacts can often widen access to seed capital.

France Initiative Reseau (FIR) is a network of key players in local development. It encourages representatives of the public and private sectors, local and regional governments, bankers, political decision-makers and senior managers to serve on local committees aiming to create new jobs. These local committees (Plate-Forme d’Initative Locale) administer credit funds that provide small loans without collateral to any person with a viable business proposal. The committees are responsible for the assessment of business plans and the management of the loans. Sixty-five such committees have already been set up throughout France and 80 more are in the making. FIR stimulates and supports the creation of local committees, providing information and training for committee members.

46

ATHENA

In the case of Women-friendly Finance in Sweden, the project is a joint venture of the regional labour board and the private employers’ organisation. Thus, avenues for the support of entrepreneurs and for mainstreaming have been built into the project from the very beginning. ‘Women-friendly Banking’ uses these structures to integrate women entrepreneurs into the local business community.

The regional branch of the private employers’ association organises an annual business fair. All NOW participants are invited to participate free of charge. This gives them an opportunity to make contact with the different companies in the region. Sub-contracts often result. The fairs allow the women to sell their products and services direct to the public. They also strengthen the network of women entrepreneurs who are always willing to display and sell each others’ products. Sometimes enterprises from other countries participate in the fairs. One woman who runs a youth hostel in the mountains made contact with some large companies from Russia. They are legally obliged to give their employees a week’s paid recreational leave each year. As a result of the contact, several groups from these companies spent their 1997 leave in the new, low-budget accommodation in the Dalarna mountains.

NÄTVERKSBANKEN

Key actors at a local and regional level are not only authorities and agencies concerned with business support and economic development. Bodies responsible for child care and for public transport in rural areas can also be instrumental as key actors by ensuring that their provision is adapted to the needs of business women.

7. THE LAUNCH OF THE BUSINESS

The launch of the business, whether it is the official opening of a store, a service agency or any other form of business, is an important event for the entrepreneur. It is the final point and goal of the itinerary described as the ‘during start-up’ phase. Projects help their entrepreneurs brief the local and regional press. As well as the press, key actors such as representatives of banks, chambers of commerce, equality bodies, local authorities and development agencies should also be invited to the launch, where they should gain visibility and credit for supporting the new entrepreneur and the NOW project. This helps to create and consolidate a favourable environment for women’s enterprises.

A NOW transnational partnership, linking projects in Austria, Denmark, Germany, Greece and Sweden, organised a women’s trade fair to help their entrepreneurs launch their business.

The ‘Europäerinnen’ fair enabled new and established entrepreneurs to show their products to a wider audience of potential business partners, key actors and the public. NOW funding was used to rent the prestigious Design Centre in Linz (Austria) and to help the women develop their advertising and marketing strategy. The fair’s PR campaign particularly helped the Austrian business women find customers. Many participants agreed new business arrangements, such as sharing business premises or selling each other’s products. A few wholesale companies also showed interest in buying some of the products.

KIN - WOMEN IN NETWORK TRANSNATIONAL PARTNERSHIP

Finally, it is important to remember that launching products and services and improving entrepreneurial skills are processes that will continue for the entire life of an enterprise. Many activities must be carried out intensively, especially during the first crucial months and even years in the life of the new company. If EMPLOYMENT-NOW or SME support

47

structures can respond to the young businesses’ continuing need for support, their chance of survival will be greatly enhanced.

AFTER BUSINESS START-UP : STRATEGIES FOR CONSOLIDATION AND GROWTH

‘A business that has no potential to change cannot survive and a business that does not search for its potential leaves survival to chance.’ Thus speaks the management expert, Peter Drucker.

All businesses must develop and adapt if they are to survive. This involves improving or changing what the business already does, introducing a new element into the existing business, or increasing its size. Business growth is therefore defined as the development or evolution of a business over time.

No business exists in isolation; the context in which it operates is constantly changing. A new local business could increase competition. Customer demand could change. New regulations could require product modification. Therefore the business must change constantly to be ahead of, or as a response to, the market. Having a strategy for growth allows entrepreneurs to manage that change in a way most beneficial to themselves and the business. However, like the business plan, the strategy for growth must be continually reviewed and updated in the light of current performance and future potential.

Measures to help women build their strategy for consolidation and growth are of crucial importance. Statistics expose the vulnerability of newly created businesses. More than a third fail in the first three years and 60% within ten years of starting. Gender-segregated statistics are few. However, a French study15 indicates that companies headed by women boast results significantly above average. Nevertheless, women face more barriers to entrepreneurship than their male counterparts. Caring for children and other dependants, insufficient financial backing and a non-supportive family or community are just some of the on-going constraints experienced by many women.

In most parts of Europe, the rate of unemployment among women is higher than that for men. Many Governments promote business creation as a solution to unemployment but, if this is to be a viable solution for women, they must be given appropriate support to ensure the long-term survival of their business. This not only ensures that they remain economically viable but can also result in additional jobs for other people. Business creation is a high-risk activity that usually provides employment initially for one person. Concentrating efforts on consolidation and growth could result in the creation of many more jobs. The need to support enterprises during their vulnerable early years, the necessity to create additional jobs, and the support women require to overcome the additional barriers further emphasise the need for measures that help women build their own strategy for consolidation and growth. These measures fall into eight main categories:

1. Helping women entrepreneurs recognise the need for growth2. Tools for auditing and taking stock 3. Sourcing and managing finance 4. Effective and appropriate methods of learning5. Marketing 6. CIT as a tool for business 7. Networking, co-operation and partnership8. The support and development environment15 Etude SCRL pour L’Entreprise: Les Femmes dirigeantes dans les Entreprises Françaises, Paris 1996

48

1. HELPING WOMEN ENTREPRENEURS RECOGNISE THE NEED FOR GROWTH

Having launched their business, most women are preoccupied with the daily work of running the business, getting customers, making a reasonable living, surviving. The last thing many women think about is development and growth. Many will feel satisfied with their achievements to date. They may feel they have little time or money for further training. Advice that came free when they were setting up their business may now carry a fee. Why should they change to something they do not know? Growth could mean loss of control, taking unknown risks. Many will not have the necessary personal skills and competence for growth. They may not know how to develop their business, or in what direction. This will require further knowledge, skills, resources and ideas. However, before they learn how to grow, they must become aware of and learn the fundamental importance of change. In this respect, most people have a natural resistance to change and must be helped to overcome that reluctance for the benefit of themselves and for the survival of their business.

Unfortunately, for many entrepreneurs, the motivation to change stems from a crisis within their business. Unless they take action, they will go out of business.

Shellfish farming plays an important economic role along the west coast of France. However, the situation has been deteriorating for some time, with about 80 businesses disappearing each year. By means of the NOW project, women in the oyster farming business have taken advantage of new niches emerging in the tourist trade to offer boat trips to oyster farms and other sites. In 1996, the number of tourists visiting the farms was over 11,000. Not only has this brought increased revenue, it has created new work in the form of organising the trips, maintaining the sites, guides, etc. It has also stimulated additional demand for local shellfish. Although the motivation for change came initially from a state of crisis, the success that has come from diversifying their product has created a powerful incentive for further development, which has become an integral part of the women entrepreneurs business strategy. They are now taking the lead in managing the development of their business, instead of being forced to change.

TERRE ET MER

Having developed a strategy and tools for change, these women began to see change not just as a mechanism for survival, but as a positive strategy for growth. Instead of being followers, they become leaders. However, women should not wait until their business is facing a crisis before taking action. It is obviously better that they develop their strategy at the outset. Organisations that accompany women through the various stages of business start-up must, during the early stages, raise awareness of the need for continual growth and development. Indeed, belief in the need for growth is an integral part of the entrepreneurial attitude.

Unless women seek help because their business is in difficulty, organisations that support existing entrepreneurs have the additional problem of first identifying and contacting women. The next crucial step is stimulating their interest to participate in any subsequent activity.

The Swedish WOW project aims to increase and strengthen female entrepreneurship, particularly by enhancing the export potential of women entrepreneurs. It targets professional women who have already set up and run a business. To raise the women’s interest in developing their business, a series of ’info-meetings' were arranged in the three towns participating in the project. Advertisements in local papers, personal invitations through women's business associations and telephone calls by local equality officers were used to contact

49

potential participants. Each info-meeting attracted about 50 women entrepreneurs. The WOW programme was presented and those wanting to participate were asked to complete a questionnaire. The questions were constructed in such a way as to single out those who had 'survived' the first three difficult years of being an entrepreneur and who had reflected on the need to grow. Thus is was possible to list priorities for growth, such as the need to diversify, new competition, spending too much time on practical things instead of planning, needing to introduce new technology into the business. Based on this information, fifteen participants were chosen in each town and the themes of the seminars decided.

LIBRA

The DATAWEB project in Thessaloniki, Greece, also aims to support existing entrepreneurs. It places particular emphasis on information and communication technologies (ICT) as a tool for business. Invitations to attend a Workshop were made to women running their own businesses with the help of seven business chambers in Thessaloniki (industry, commerce, liberal profession, mixed-nation, etc) and CREATIVE’s own network of women’s businesses established during the LEI Initiative (1987-95) and the first NOW programme (1991-94). An advertisement was also placed in the local newspaper. Twenty women were then selected for participation in the Workshop. This was based on their interest in and need to consolidate and grow their businesses. Their enterprises were currently viable but needed to grow for their future survival.

The Workshop was led by two facilitators experienced in action-learning methods. By exchanging experiences with others, the women learnt about their own and their business’s needs for growth. They analysed their own needs through case studies, exercises, tests and discussions. The workshop materials were based on a women-friendly ‘Guide for Growth’, produced by DATAWEB’s local partner, Breakthrough16.

Participant feedback confirmed the success of the Workshop and identified the specific issues related to business growth that the women would like covered in future workshops.

CREATIVE

Once they are aware of the need to grow, women need help developing their strategy. This will include the acquisition of additional knowledge, skills, resources and ideas. Women tend to be more cautious than men and to take fewer business risks. They often have a restricted and less ambitious vision of their business. They may have developed a local clientele but not realised that they could equally well be trading with customers in other countries. Exchanging ideas with other women entrepreneurs, individual counselling and study visits, particularly to other countries, are some ways that NOW projects help women develop that wider vision and the confidence to take their business further.

2. TOOLS FOR AUDITING AND TAKING STOCK

Before women begin to develop their strategy for growth, they must first examine themselves and their business. Where are they now? How does their current position compare with the Business Plan? What is the profitability of the business? Do all their activities yield a satisfactory return? Should they rationalise their activities or diversify? In what direction should they grow and what steps should they take? Are they and their business ready for growth? If they do not feel ready, what additional support do they need?

16 Guide for Growth: Better Business for Women, produced for the European Commission, DGV, November 1995, as part of the European LEI Initiative.

50

Such questions are explored by PRATIKAS, which runs a project in former East Germany. It uses a simple exercise similar to the children’s game ‘heaven and hell’. A line is drawn on the floor or created by tape. ‘ Heaven’ is at one end and ‘hell’ at the other. Each woman in the group places herself somewhere along the line and explains why she chose that particular position. The other women then comment on their colleague’s choice and the reasons for it. The questions each woman then asks herself are:

Did I find my real place? (Yes, clearly. This is my trade, my job. - No. Not at all. I should emigrate from here). Am I able to use my full potential? (Yes. The business uses all my knowledge and skills. - No. I could move to a better place.) Do I feel safe and competent in what I am doing? (Yes. Totally. - No. I am scared.) What are the future prospects for my business? (I am sure it will be a success. - Forget about it.)

The game-like character of this exercise helps to take the stock-taking exercise to a more detailed stage using individual counselling and group discussions. This helps the women understand the reasons for any problems or blockages and enables the joint development of strategies for tackling them.

PRATIKAS

DATAWEB also uses a simple exercise, called ‘Plotting the Entrepreneurial Path. This helps women analyse the strengths, weaknesses, opportunities and threats of their business and its key asset - the entrepreneur herself. On a large sheet of paper, the women draw a horizontal line. They then plot along the line their business activities from the start of their business to the present time. They mark the high points or successes above the line (the higher above the line, the better the achievement or success) and the low points or difficulties below the line. Each point is annotated with a brief description of what went right or wrong and why. Joining up the points creates a kind of graph that shows the entrepreneurial path of the woman and her business. This exercise helps the women identify particular strengths and factors that have led to success and areas where weaknesses or events have affected them and their business badly. This is good preparation for developing their strategy for successful growth.

CREATIVE

For a more in-depth examination of their business and personal situation, external expertise can be used for objective advice or help with evaluation.

The Demetra project in Spain works with co-operatives. Many businesses fail within the first year but, in a co-operative, financial reasons are unlikely to be the cause. It is more likely to concern difficulties with working in partnership with other members of the co-operative, lack of drive, tenacity and a collective vision, lack of communication or experience in shared decision-making. Like a marriage, the members must learn to live and work together.

One of Demetra’s aims is to help new co-operatives establish the habit of continual self-assessment and growth. This it achieves in four stages:1. Three times during the first year, new co-operatives receive a questionnaire on the development of their business activities. The questionnaires refer to the business plan and focus on economic objectives. They also seek information on the human and environmental aspects that are part of the co-operative philosophy (for example, ensuring that a democratic management style is in operation; that a good relationship exists between members; and that care is taken concerning environmental protection). If the questionnaires are not completed and returned, Demetra follows up by telephone.

51

2. Experts analyse the questionnaires and discuss any problems they identify with the members of the co-operative. They help them reflect collectively on possible solutions and steer them toward various possibilities for growth.3. The co-operative’s members write a report of the meeting with follow-up action. The next questionnaire builds on the issues identified and the follow-up actions.4. At the end of the first year, the co-operative holds a 2-day seminar with three objectives:

1) through study circle methods, to assess and evaluate the first year of operation. Members of other co-operatives join in the process and Demetra acts as facilitator.

2) to establish contact, share experiences and set up networks with other women entrepreneurs.

3) to celebrate the co-operative’s first anniversary and to mark the women’s success in passing the first hurdle, namely surviving the first and most vulnerable year of business.

FVECTA

Involving local and regional actors in the exercise of auditing and taking stock of the business adds an important dimension to the exercise. They may also be instrumental in helping the women achieve their planned business changes.

At the end of each season, the women meet to evaluate their business and to take decisions concerning the next season. Topics for discussion could include safety on sailing trips, improving signposts for tourists, new regulations. Initially, other local actors with relevant expertise were invited to contribute to this process. However, the women’s activities are now sufficiently well-established that these actors take the initiative to consult the women before taking any decision that could affect their business.

TERRE ET MER

Universities and other educational institutions can often provide expertise in certain areas. However, the people providing help may not themselves have entrepreneurial experience so their use should be carefully limited to the areas where they have relevant expertise.

Most of the participants in WOW have reached a certain professional level in their business life. However, although they are successful, they are often so absorbed with everyday business that they fail to sit down and take stock. One way of overcoming this has been to collaborate with a university in Sweden that specialises in the development of SMEs. It has run seminars aimed at helping the women to audit their business, to clarify their plans for the future, to identify their priorities and to stimulate discussions on various means to reach their goals. The university is also evaluating the project on a continuous basis and will contribute to its final report.

LIBRA

The French project, Euro-Entreprendre au Féminin, offers individual support to women entrepreneurs. However, before the women can decide in which direction they want to develop their business, they may need specialist information on markets, regulations, etc. In a few cases, help is sought from students attached to business schools or relevant university departments. The type of assistance they can provide includes: gathering statistical data; designing and analysing the results of questionnaires; helping develop a pricing policy; and carrying out a study of the relevant economic sector.

52

Such action requires the entrepreneur to specify her needs precisely, to select a student carefully to ensure that he or she has appropriate knowledge and skills and to explain her business and what she requires of the student. She must establish a timetable for carrying out the work and monitor its implementation. She may also make a small payment for the work, but this would normally be less than the market price. Although the exercise demands an investment of time, it can help the entrepreneur have a more sophisticated knowledge of her market and her position within it. Such a study will normally include a set of recommendations that can serve as a basis for a more profound reflection and signpost the way for future development.

ATHENA

The growth of a business may also be conditioned by external factors, such as new laws, regulations or technical standards. This aspect is covered more fully in the final section on the Context in which the business operates.

3. SOURCING AND MANAGING FINANCE

Access to finance is one of the biggest hurdles women entrepreneurs face. They first encounter the issue when setting up their business. The topic is therefore covered in detail in the section of this report dealing with the ‘During Start Up’ phase of business creation. Women continue to encounter difficulties when wishing to develop their business further. Nevertheless, despite these difficulties, women find it easier to secure finance after setting up their business because they can then show that they have a product, a market and customers.

For projects working with women entrepreneurs, the emphasis at this stage lies more with helping women overcome their anxiety about seeking bigger loans and making more significant investments in their business. Women tend to be cautious and less ready than men to take risks. As a consequence, they are often less ambitious in their plans to develop their business. Some may have under-sourced their business in the first place. This exacerbates the cash flow problems faced by all small businesses due to customers delaying payments. For the woman who has under-sourced her business, this can result in the added burden of expensive overdraft facilities. Some women may be having to face the idea of taking out additional loans when they have still to pay back the money they borrowed to set up their business. Whatever the situation, projects work to increase the woman entrepreneur’s confidence in herself and her business so that she is able to seek the necessary funding for consolidation and growth.

Women need information about possible sources of finance. These include: banks organisations providing venture capital and credit national, regional and local funding programmes auto-financing through building a reserve of funds larger companies to whom women supply their products suppliers extending credit facilities

Mida Rodrigues is a Portuguese woman who worked for 23 years in the family business. Seven years ago she started her own business. Wanting something that required no seasonal stock or different sizing, but which gave women pleasure, Mida Rodrigues set up a sewing shop in a big shopping centre. She is about to open her third shop, which will bring her employees to 7. She says Portuguese women believe that banks will not finance them so they look for other sources. She thought she would have difficulties anyway because a bank would not view a sewing shop as a serious business proposition. Therefore, to start her business, Mida Rodrigues provided 50% of the finance herself and borrowed the other half from a friend. To open her third shop, she has made a financial arrangement with DMC, the large sewing thread manufacturer. DMC will provide

53

the shop furnishings but Mida has a year in which to pay for them. Mida also plans to advertise on the Internet and will highlight her association with DMC. This arrangement is clearly beneficial to both parties.

Participant in DATAWEB Transnational Partnership

Women need information and advice on tax breaks or ways of reducing their tax liabilities. They also need help gaining access to finance. Few are members of chambers of commerce or other business networks. They therefore have few contacts with people who could introduce them to the world of business and finance. NOW projects play an intermediary role by providing the names of appropriate contact people or even arranging an introduction. Some projects devote considerable time to building up the women entrepreneurs’ financial knowledge and negotiation skills.

Demetra’s programme includes a training course entitled ‘Negotiation with Financial Bodies’. Essential information on sourcing and managing finance is combined with practical exercises. The introductory module includes the management of working capital; the precise definition of the financial needs to be covered; the negotiation process; and the cultivation of a good relationship with the bank. Subsequent modules cover detailed aspects of bank loans, discounting letters of credit, arranging credit facilities, and other financial instruments, such as leasing and factoring. The final module concerns international trade. Additional support is provided through a glossary of financial terminology, spreadsheets for risk analysis, and a computer programme that enables women to translate any loan proposal into clear data on their obligations and payments.

FVECTA

4. EFFECTIVE AND APPROPRIATE METHODS OF LEARNING

After business start-up, time is a precious commodity in extremely short supply. The daily work of running the business is more than a full-time job, and many women are battling to combine this with their care responsibilities for children and other dependants. The support they received while setting up their business, from their family and the project, is often no longer offered or available after business creation. Until their business provides an income sufficient to pay for adequate care facilities, the women have a hard time trying to manage the demands of their business and domestic responsibilities. Nevertheless, further training and support is essential for most women. Many will have followed a training programme prior to setting up their business. This will have taught them the fundamentals of running a business, such as management, accountancy, marketing and product pricing. However, much of this training will have remained largely ‘abstract’. It only becomes ‘real’ after the woman has set up her business. At this stage she needs further support to understand how she can apply her previous learning to the specific requirements of her own business.

Some women may have started in business with virtually no training at all. More often than not, such women start a business in an informal way with their spouse or a friend. Typically they may initially keep the books, produce invoices and liaise with suppliers. They may get involved with customers, advertising and finding new markets. Only after setting up in business do they see the need for training in order to run the business more effectively, to remain competitive, or to grow.

Training and other support measures must take place at a time and location that interrupt business as little as possible. They can be offered locally, to save travel time, or distance-learning modules can be developed that enable women to study at times that suit them. Alternatively, training could be offered, say, Friday afternoon and Saturday morning to reduce interruption to the business week. If modules are repeated several times, women can choose the date that suits them best.

54

Most projects combine training activities with individual guidance and counselling. Some focus on one-to-one support, referring women to the mainstream providers for general business courses. The individual support is crucial for women at this stage. This allows them time to discuss aspects that are quite specific to their business, such as where to seek further funding or how, in the light of experience, to revise their marketing strategy. They may also want to discuss personal matters, such as concern about the progress of their company or the conflicting demands of their family and business.

Group work is also extremely valuable. The women gain much confidence from working with others who are in a similar situation. They become more self-assured about increasing their bank loan or changing the direction of their business. Working together, the women identify problems, learn from each other, and realise their own potential for solving problems. The topics covered in group training include methods for taking stock, sector-specific issues and general management topics, especially time and self-management. Most projects provide a framework of topics which are adapted, or supplemented, according to the needs of the group. This framework is based on the experience of the training providers and a preliminary survey of women entrepreneurs’ needs. Training should certainly take into account the need to increase the risk capacity of the entrepreneur and her business.

Local partnerships may provide experts who can play an active role in training, practical experience and follow-up. Company visits provide good learning opportunities, particularly where the established company sees that both sides can benefit from the visit. As in the case of mentoring, some of the new entrepreneurs’ ideas could inspire new thinking in the company’s personnel. Perhaps a future business relationship could result from the visit.

Other methods of learning include using the Internet and video-conferencing. Linguistic, cultural or technical reasons may currently inhibit the effectiveness of these methods but they are rapidly becoming powerful tools for learning and for conducting business. The Greek and Dutch DATAWEB projects place considerable emphasis on NICT in both respects. Within their transnational partnership, CREATIVE and STEW have organised video-conferences that enable women entrepreneurs in the two countries to discuss issues of common interest. Such exchanges also facilitate transnational co-operation and joint business ventures among the women. Networking is discussed below in greater detail but it is as another way in which women can learn from each other.

Finally, the addition of a transnational dimension can significantly enhance any learning activity. Women gain tremendous confidence from meeting and working with women from other countries. Furthermore, competition is less likely to be an issue when discussing business strategies with someone from another country. Company visits can therefore result in a more open and constructive discussion.

The KIN project concentrates on networking as a tool for business expansion. It ran courses in two regions of Denmark with the aim of teaching women how to use each other, nationally and internationally, through an electronic network. However, it found that the women preferred to communicate only with women they already knew. The two groups were therefore brought together for lectures, excursions, and preparations for a conference with transnational partners (Austria, Greece and Sweden). The conference programme included workshops and an exhibition where the women entrepreneurs could display their business products and ideas. In addition, the women from each partner country organised seminars where they describe entrepreneurship in their own country. The conference greatly facilitated transnational contacts and the establishment of a European network of women entrepreneurs.

AOF ODENSE

55

5. MARKETING

As with the business plan, an entrepreneur should be continually reviewing and, where appropriate, amending the marketing methods she uses in the light of the constantly changing market. An evaluation of the entrepreneur’s current marketing practices and planning is also central to the process of taking stock and developing a strategy for consolidation and growth. The stock-taking should include questions about whether the entrepreneurs can or should improve the quality of their product, or cut unit costs. Should they reduce their product range, or diversify? Many entrepreneurs focus on the product, without taking proper account of the market in which they are operating. Their stock-taking should therefore also include checking to see whether customer demand has changed or whether the predicted demand has materialised.

Faced with a crisis, the small shellfish businesses chose to diversify and exploit the tourist potential. The resulting tourist trade led directly to an increased demand for the women’s original product, oysters. Seeing the beneficial link between their touristic and primary activities, the women’s marketing strategy now focuses on the commercialisation and quality of their products.

TERRE ET MER

Women will already have some marketing tools but they need help to evaluate their current situation and to develop a new marketing strategy appropriate to their situation. This exercise need not be expensive. Much information is available at little cost. The women entrepreneurs should develop the habit of monitoring their competitors, such as collecting their publicity brochures, observing their shop displays, or noting any unusual services they offer. They should collect mail order catalogues and gather marketing ideas from a range of businesses. These could inspire them to develop new approaches to marketing their own product. Perhaps they could offer a mail delivery service for customers living in rural areas or offer special rates if customers agree to buy the company’s products on a regular basis.

6. CIT AS A TOOL FOR BUSINESS

Some women have never used a computer. Others are familiar with different aspects of communication and information technology (CIT). They can probably teach themselves how to use new applications. However, this is not the most effective way for them to find out what will be of greatest value to them. Nor is it the most efficient way to learn to use the latest software that can improve their effectiveness in every aspect of their business.

BREAKTHROUGH is a local partner that animates a process of Transnational Mentoring using computerised link-up – so-called ‘Tele-Mentoring’. The first pilot took place in April 1997 when women entrepreneurs in the Netherlands, Portugal, Italy and Greece linked up via a tele-conference. The participants saw and talked with each other, and used a written ‘chat’ facility to compensate for any loss of sound. They discussed the mentoring needs of women entrepreneurs in different countries and sectors. The cost and time efficiency of this method means that mentoring across borders can become an everyday reality for both women entrepreneurs and support agents. Access to advice and support need no longer be confined to a particular locality: it could be available from anywhere in the world.

CREATIVE

The Internet is an increasingly essential tool for business. While personal contacts will always remain of paramount importance, the Internet provides a means of speedy communication and enables people to collaborate, despite being in different locations. It also provides gender-free access to information. This is important for women who do not necessarily have access to the information available informally to members of

56

business or social clubs. Thus the benefits of the Internet include getting or providing information, marketing, creating Shopping Malls and Banking.

Women entrepreneurs often work in relative isolation and are rarely members of established networks. KIN is therefore developing an electronic network that will enable women to discuss ideas or work together in a flexible way regarding time and place. The KIN SettlerNet will include a bulletin board, market place, advice pages and country presentations. Thirty women will attend a 2-day course on the Internet and, for the duration of the project, KIN will provide them with the technical equipment necessary to access the Internet from their workplace. The network will eventually include partners in Sweden, Holland, Belgium, Germany and Ireland.

AOF ODENSE

7. NETWORKING, CO-OPERATION AND PARTNERSHIP

In the pre-start up phase, women are encouraged to work together, or to network, as a way of providing mutual support and encouragement. This is largely at the level of personal support, but women begin to understand how to use others to test their business ideas and to learn from their experience. After business creation, the balance shifts with business objectives taking priority. At this stage, networking, co-operation and partnership include all activities where women entrepreneurs use other people or organisations to further their business objectives. Therefore, before joining a network, or initiating a business relationship, they must have a clear idea about what they want from the association. They may benefit by:

being able to tender for a larger contract by co-operating with a complementary business;

improving market opportunities and achieving a stronger market position; sharing resources and skills; achieving economies of scale; reducing risks; sharing clients and distribution channels; avoiding duplication; developing new products; or facilitating the process of diversification.

The relationship with other people could be an informal and/or short-term association, or one bound by legal contract.

Such an approach is alien to many women who are used to being self-reliant and doing things for themselves. They must therefore learn to use other people to help their business grow.

7.1 Networking

Networks can facilitate the exchange of information and experience, introduce business contacts and clients, raise ambitions concerning business growth, offer mentors and informal advisors. They provide relatively easy access to people with similar business interests. This is particularly important for women, who are often quite isolated. However, women generally fail to use networks: they are reluctant to ‘use’ other people for their own ends. Yet successful networks depend on their members giving and taking from the network. As a first step, women need help in learning how to use networks effectively. Until the networking activities develop their own momentum, women may also require some initial support to set up a network. Such networks provide an appropriate environment in which women can develop their networking skills before joining established business networks and organisations.

One objective of the WOW project was to start networking within and between the groups of women entrepreneurs in the three towns participating in the project. Therefore, every meeting and seminar has a fixed hour for networking. At the

57

beginning, the women did not know how to handle the 'networking hour'. WOW divided them into groups consisting of participants from all three towns and gave them specific themes to work on. Over time, the women have spontaneously formed groups as they learn the benefits of networking. One group meets for a monthly business lunch. Another organises visits to its members’ companies so that the women learn more about each other’s skills and find opportunities for future co-operation. Every group has a 'spider’. This is someone at the centre of the network who forwards interesting information between its members.

A collaborative venture was the production of a brochure presenting the WOW entrepreneurs. This was produced jointly by a photographer, a copy writer, a graphic designer and a translator, all of whom are WOW participants.

LIBRA

NUTEK, the Swedish National Board for Industrial and Technical Development, uses various measures to support women’s entrepreneurship. One way is to form small groups of women entrepreneurs from a range of businesses. The weekly meetings of each group are facilitated by a member of NUTEK, for which the women pay a small fee. The women state their goals for a one- and two-year period and the group monitors the progress of each woman’s business on a monthly basis. The group enables women to be more ambitious in their plans for growth and the women help each other with advice and expertise.

NUTEK, participant in seminar

Networking also functions in a transnational context, helping women understand the business culture in other countries and opening new markets.

The WOW project also promotes transnational networking by organising workshops with women entrepreneurs in its partner countries, Austria, Ireland and Germany. The workshops include the exchange of business information, cultural differences in doing business, and study visits to companies in Vienna, Karlsruhe, Mannheim and Dublin.

LIBRA

By bringing together people with similar objectives, networks can create a basis from which to lobby decision-makers.

Most wives of fishermen and shellfish farmers play an important role in the family business. However, in France they had no independent legal status nor rights concerning ownership of the business. Apart from no recognition for the part they played, this could cause extreme difficulty in the case of divorce, widowhood or retirement. Coming together under the association of women shellfish farmers, they successfully fought for a legal status similar to that enjoyed by farmers’ wives. Now they are working to have their status properly recognised by professional maritime organisations so they can play a full part in the decision-making processes of these bodies.

TERRE ET MER7.2 Business Collaboration

Where women are in different areas of business, they can contribute complementary skills. When their businesses are in the same sector, however, a fear of competition could inhibit collaborative working. Yet each partner can benefit from the relationship. They could unite to introduce new regulations, bid for a larger contract or take measures to protect their business.

Mary Evans is one of two people offering bed and breakfast accommodation in a small Welsh village. They share the costs of advertising their holiday accommodation and pass customers to each other when they are full. Mary says ‘Competition comes from all quarters and will always be there. Instead of being

58

afraid of it, we can use it to judge our own product and to make sure we are always the best.’

Participant in Medusa project, UNIVERSITY OF WALES, LAMPETER

For co-operatives, increasing the size is not always the most effective strategy for growth. They need to maintain a balance between members and employees but finding an additional partner with the same aims and philosophies as the co-operative’s existing members may not be easy. The capital value of a successful co-operative may also make it difficult for new members to buy their way in and the resulting increase in unit costs may finally render the co-operative’s products non-competitive. Collaborating with other co-operatives and local organisations is a more effective way of growing through the exchange of knowledge, sharing good practice, innovation and increased flexibility.

Demetra trains members of existing co-operatives to act as tutors for women setting up a co-operative. One training module focuses on entrepreneurial collaboration, stressing its strategic importance for business growth. The course looks at the advantages of collaboration but also addresses issues such as interdependency; competition; defining, monitoring and evaluating the collaborative agreement; and various models and legal frameworks for co-operation.

FVECTA

Women sometimes find it easier to overcome a reluctance to use other people if they develop collaborative partnerships with entrepreneurs in other countries. Transnational activities increase their confidence and the successful collaborations can stimulate them to work more with people locally.

Euro-Entreprendre au Féminin organises week-long study visits to Italy, Spain, Portugal, the United Kingdom and France. Its transnational partners in each country rigorously prepare such visits by identifying appropriate people, establishing a schedule of visits, etc. These visits enable entrepreneurs to meet other professionals in their place of work and to create new partnerships, whether as business associates, clients, suppliers, experts or trainers. Some women return, for example to cement the business contacts, to seek additional ones, or to participate in exhibitions and fairs. Spontaneous networking also emerges among the women forming each study visit group. The women may come from the same town but have never met before. Following the visit, many decide to work together in the future. Thus both local and transnational partnerships result from the study visits. Europe suddenly becomes more real and accessible. The women have a wider vision and new appreciation of their entrepreneurial potential.

ATHENA

Participation in fairs at home or abroad also brings many new contacts for the women entrepreneurs. Often they find business where they least expect it.

An important aspect of the Swedish WOW project is enhancing the export potential of women entrepreneurs. Women participating in the project take part in Europartenariats, which are European trade fairs. So far, they have attended fairs in Gdansk, Genova, Piraeus and Clermont Ferrand. One of the women who attended the Maritime fair in Gdansk is an interior designer for ships. Her visit resulted in a large contract with a company in Singapore and an invitation to tender for contracts with several other companies. She has taken on more staff and her business is booming. Resulting from the fair in Piraeus, another woman is discussing the provision of a translation service for a Greek multimedia company. The French fair has led to a proposal to import French food to Sweden.

LIBRA

59

The transnational dimension is a powerful stimulant for new ideas, contacts and collaboration. Projects that include this important aspect must ensure that follow up support is available to help women turn their new ideas into reality.

7.3 Mentoring

Mentoring is another aspect of collaborative association. A mentor is an experienced, professional person who offers individual support to a less-experienced person. The support can take several forms, including offering advice, providing practical experience and making business introductions.

In some countries, companies are required to invest a proportion of their profits in training. In Spain, for example, 10 percent of a co-operative’s profit must be used for training or helping new co-operatives become established. Acting as a mentor counts toward the 10 percent contribution. In addition to fulfilling government training requirements, the mentors themselves also benefit from the mentoring relationship. They may get an insight into a new generation’s way of working, which can in turn give them ideas for their own business. Alternatively, there may be reasons why mentors cannot carry out certain ideas themselves. Discussing and passing these ideas on to others can help satisfy their creative needs.

Co-operatives are open organisations that take and give something back to those around them, that teach and learn from new co-operatives. Members of existing co-operatives therefore have a positive attitude towards mentorship. ‘It is like a breath of fresh air blowing through the co-operative movement and invigorating it. Some of the enthusiasm of new co-operatives rubs off.’ Mentors comment that helping those with less experience is very satisfying. Furthermore, they are also motivated to encourage others to share their philosophy and to develop trust so they pave the way for future collaboration.

FVECTA

If possible, projects use women as mentors as they may have encountered similar barriers, or experienced a similar career pattern. They ‘speak the same language’. However, it is not always possible to find appropriate women.

Most of the women participating in the Irish WENT project are co-entrepreneurs. At the end of their training, they and their spouse or business partner have access to both male and female mentors who have been trained under an ADAPT project. This gives the women an opportunity to seek advice and guidance on matters directly related to their own business. The mentors are not normally in the same line of business but work in an associated field. Typically, they agree to help the woman and her partner over a 6 week period. Between meetings, the women have time to take their ideas further before seeking help with the next stage. Involving the husbands was a successful move as it helps them feel more involved in the growth process as it affects the business and the personal development of their wife.

THE NORTHSIDE PARTNERSHIP

The WOW project in Sweden has developed a mentoring programme to help the participating women entrepreneurs implement their plans for growth. It selected forty-five experienced entrepreneurs, male and female, and trained them in mentorship skills. Some participants work in a predominantly male environment and choose a female mentor to have another female view of management styles, for instance. Others may use a male mentor to learn more about male cultures and to ease access to mainstream networks. Mentors agree to act as a mentor for one year and they meet the woman entrepreneur normally once a month. The entrepreneur may come with points she wants to discuss, but the mentor may also question her about aspects of her business that he or she thinks important.

60

Being a mentor is an honorary position, without pay. However, WOW publicises the names of mentors so they gain visibility and status. The mentors always benefit from the mentoring relationship. The benefits are never just one way.

LIBRA

The idea of mentoring as part of a business consolidation and growth process builds on the principle of ‘businesses learning from businesses’. In practice, this means using discussion groups and one-to-one meetings to bring together women who are just beginning to run their own business and women who have been in business or self-employment for some time. Thus, in the context of the Greek DATAWEB project, experiences, ideas, and opinions are passed from experienced to less experienced women entrepreneurs. In particular, it links the women starters in its Business Incubator with the established women entrepreneurs taking part in the Growth Workshops.

CREATIVE

8. THE SUPPORT AND DEVELOPMENT ENVIRONMENT

It is easy for new entrepreneurs to be introspective but a business does not exist in isolation. It is a part of its environment. Customer demand could change or new regulations be introduced. Such changes require the entrepreneur to modify her marketing strategy or amend her product specification. They may even cause her to change completely the direction of her business. Personal contacts and networking play important roles in keeping the entrepreneur informed of new developments. Reading newspapers and trade journals are an essential part of her daily routine.

Women must overcome their reluctance to engage in ‘political’ activity, at local, regional or national level. It is crucial that they participate fully in any decision-making process that may directly or indirectly impinge on their business activities. They should look to sit on committees or at least be familiar with the various decision-making processes affecting them in order to contribute their views at the appropriate time. Despite SMEs playing an ever increasing role in the local and national economy, small entrepreneurs frequently have little status in the community. Measures should therefore be taken to promote a positive attitude, particularly at the local level.

A woman may also find that the support she received from her husband and family when setting up her business is no longer available. They may have accepted the situation at the beginning but no longer accept the competing demands on her time. As a consequence, they may begin to demand more attention, thereby creating additional stress for the woman. By ensuring that she pays some attention to her family, she will reassure them and avoid greater difficulties in the long term. Similarly, a woman’s business may depend on the continuing good will of other people indirectly connected to her business, such as neighbours who put up with additional noise.

For the continuing success of their tourist activities, the French shellfish farmers must pay careful attention to the ‘human’ environment of their business. They make their visits to working farms and the increasing success of this activity could create noise and inconvenience for the people who work there. The women must therefore take into consideration the farmers’ viewpoint to maintain good relationships and ensure that the farmers continue to present a positive and welcoming image to the paying visitors.

TERRE ET MER

Women must give continuous attention to every aspect of their environment, whether political, physical, economic, social or domestic. They must be alert to their personal environment and take action to maintain good relationships. By remaining aware of the

61

wider business environment, they will be in a position to seize any opportunities that arise and take preventive action to minimise any threats.

The German project, PRATIKAS, encourages a strategy of continuous stock-taking. Monthly ‘village workshops’ involve participants and staff in an exercise of assessment, constructive criticism and decision-making about the next steps to take. In individual monthly counselling sessions, participants are also helped to assess themselves, to consider changes, to understand why certain steps were successful or not, and to identify the reasons for positive or negative results. These methods ensure that they do not see stock- taking as a one-off exercise but as part of the daily life of the business. At first, the participants were not used to this somewhat detached look ‘from outside’. However, they now accept the monthly reports on their business and their discussion with colleagues as an integral part of an efficient auditing system.

An important aspect of this exercise is to distinguish those areas over which the individual woman has responsibility and those which lie outside her control. Too often, women feel responsible for all and everything. In particular, they feel responsible for failure and often do not credit themselves with success. Furthermore, they often tolerate a situation because they believe themselves unable change it. This can lead to anxiety, passiveness, rejection of responsibility, feeling over-challenged and, finally, incapable of taking action. If women learn to identify ‘external’ factors affecting their business, they can stop blaming themselves for things that go wrong and begin to develop a strategy for overcoming the difficulty.

PRATIKAS

CONCLUSION and RECOMMENDATIONS__________________________________________________________________________________________

Women are already proving their potential for contributing to job creation and economic growth at local, regional, national and European level. Ensuring the best possible framework to support women’s entrepreneurship will enable them to realise this potential fully.

Setting up and surviving in business requires a continuous learning process that includes both business skills and personal development. This is an on-going challenge for women entrepreneurs, even those well equipped through educational background, professional experience and familiarity with entrepreneurship through family role-models. The challenge is all the more demanding for women without qualifications or prior experience, or who have been out of paid employment for some time.

Initiating and strengthening an entrepreneurial habit of life-long learning and development was a common feature of the 21 NOW projects that comprised the European Commission’s working group on Business Creation by Women. The group’s remit was twofold: to highlight the challenges women face; and to create a European model of best practice to optimise women’s successful entrepreneurship. The follow-up seminar ‘Female Entrepreneurship in Europe: Is a Woman’s Business different?’ stimulated a dialogue between decision-makers, project promoters and women entrepreneurs on ways to strengthen the framework for women’s entrepreneurship. It provided an opportunity to test and improve the measures proposed by the working group with key actors in the field; and to discuss ways of strengthening current policies and practices at local, regional, national and European level.

NOW projects play a successful role as ‘midwives’ to women setting up in business. They support them from the first seed of an idea for a product or service through to the first draft of a viable business plan (pre start-up). Many projects continue to support

62

women entrepreneurs during the final preparations leading to the actual launch of their business (during start-up). Some offer support during the difficult period after business creation when women entrepreneurs are consolidating their business or considering further development and growth (after start-up). Support measures include: individual counselling; group work; training to develop business and personal skills; mentoring; work placements; and networking. All projects have developed strategies to transfer their women-specific approaches and methodologies into mainstream business creation and SME support agencies.

The projects participating in the working group placed greater or lesser emphasis on each of the above components according to their national training and labour market policies, and to their different business cultures and local needs. However, looking at the total picture of NOW good practice across Europe, as presented by the working group and participants at the seminar, a European Model for the support of female entrepreneurship emerges.

The following are crucial elements of this model:

Measures supporting business creation as a strategy for job creation should not only help people set up their enterprise. They should also provide continuing support after set-up to ensure that the new businesses grow and survive in the long-term.

The expansion of viable small businesses is at least as important for generating new jobs as the creation of completely new businesses.

Business incubators are an excellent tool for shortening the final preparatory phase that leads directly to the launch of the business. They also play an important role in business consolidation and growth.

Due to societal and family constraints, the area or type of business that women propose often do not fit the traditional patterns. The businesses may be very small, offering services in new areas, even run part-time. The local business community, and banks especially, must ensure that their criteria for assessing potential allow for a variety of business models.

Access to finance remains the major hurdle for women entrepreneurs, especially when initially setting up their business. Business creation and SME support structures must ensure that women get full information on credit and funding programmes. Collaboration with banks and funding agencies ensures that business plans and proposals for business growth are sound and meet the funding criteria. Non-traditional seed capital programmes play a major role in getting very small women’s businesses off the ground.

A transnational dimension boosts both the personal and business development of women. It enables them to secure a good grasp of market mechanisms, business culture and regulatory frameworks in other Member States. Transnational activities also enable them to explore new markets, make business contacts, and give greater visibility to their business through participation in European trade fairs and events.

RECOMMENDATIONS and MESSAGES

The following recommendations and messages emerged from the work of the project co-ordinators, entrepreneurs, bankers, business people, administrators and policy-makers who participated in this thematic work. They are targeted at the different actors whose collaboration is crucial for the success of business creation strategies. They are not necessarily specific to women. Many apply to small and micro businesses in general.

Good practice - better practice

63

Women entrepreneurs

® Ensure that business plans are prepared in a professional manner to fulfil the requirements of banks and funding agencies. Demand to be treated with respect and on an equal footing with men. Do not accept any lesser treatment. Always seek explanations for rejection and, if appropriate, modify and resubmit applications for funding.

® Make sure you have adequate start-up funding. Do not be daunted by the prospect of having to invest again in order to grow.

® Recognise that your business must constantly evolve if it is to survive. Entrepreneurs must respond to changes in customer demand, competition, production costs, and so on. No business can afford to stand still.

® Use networks to further business objectives, for example to meet new clients, make business contacts or form new business partnerships. Women’s networks provide a good context for developing networking skills before joining regular business networks and organisations.

Projects

® Develop flexible programmes that meet individual needs but also ensure that participants have the core knowledge and skills necessary for successful business creation. Seek to balance a highly supportive approach with gradually letting participants fend for themselves, as preparation for the rough realities of the business world.

® Integrate training in NICT and Finance into programmes on women’s business creation. NICT includes the use of the Internet for business. Finance includes a basic understanding of the banking system, credit regulations and financial language.

® Use mentorship programmes to provide women entrepreneurs with relevant business knowledge and expertise.

® Women tutors, advisors or mentors can serve as role models, especially in fields where they are underrepresented.

® Ensure that every woman setting up in business has a viable business idea capable of yielding an adequate income.

® Provide continuing support after the start-up phase to give each business the best chance of surviving the initial stages.

® Create a supportive environment for women entrepreneurs by involving local and regional key actors in the project’s activities. Involve them as members of steering committees, as advisors and even as trainers.

Improving support for women entrepreneurs

SME support agencies and training providers

® Women do not always have the same access to information as men and may not hear about your programmes and services. Find ways of communicating directly and use their networks and channels of information.

® Allow for women-specific needs when scheduling counselling and training programmes. Women returning to the labour market after raising a family may be unsure about their skills and potential, and may need some encouragement.

64

® Include modules on using the Internet for business in all entrepreneurship training programmes. Make a work centre available where women can have access to information and communication technologies until they can afford to buy their own equipment.

® Establish one-stop-shops and incubators to simplify the business creation process and shorten the time needed to launch a business.

® Recognise that, even when women’s business ideas do not fit the conventional models, they can develop into viable businesses playing a significant role in local development.

Banks and other funders

® Make credit policies transparent, simplify application procedures and produce guidelines written in plain language.

® Review criteria for assessing loan applications to ensure that they do not discriminate against women.

® Review criteria for loan guarantees and collateral and relax the requirements for small, easily-monitored loans. Give start-up loans with longer periods of grace.

® Brief staff so they are aware of the characteristics of many women’s businesses (size, sectors, little traditional collateral, etc).

® Many women are cautious in assessing their financial needs. Encourage them to make a greater financial investment to ensure that their business is adequately funded.

® Keep gender segregated statistics to monitor the funding process and to track the progress of enterprises funded. Seek customer feedback to ensure that women’s needs are met.

® Collaborate with intermediary organisations that support enterprise creation. Participate in activities related to finance to ensure that women understand what you require in a business plan or application for funding.

® Consider co-ordinating and managing venture capital funds, and introducing investors to appropriate businesses seeking funding. This will enable you to spread the risk of meeting all the funding needs of any one enterprise.

Key ideas for reinforcing policy

In the regions

® Make sure local and regional development plans take full and separate account of the role of women entrepreneurs in creating jobs and diversifying the economy.

® SME funding and subsidies often neglect the variety of sectors and activities represented in women’s businesses. Many are in the fast-growing service sector, yet are rarely considered for funding.

® Ensure that women can access incubators and centres for small businesses on an equal basis with men. Provide adequate care facilities to enable women to spend the time needed to get their business onto a firm footing.

65

® Play an active role in building up local and regional partnerships between banks and intermediary agencies whose aim is to support business creation. This is especially important for entrepreneurs coming from a situation of unemployment.

At national level

® Business creation policies and initiatives can more effectively exploit the job creating potential of women if more is known about the success of current efforts. This will require up-to-date gender-segregated statistics on business creation and growth.

® Two major issues for all small firms’ cash flow: high employment taxes penalise the

development of labour-intensive products or services; all small and micro businesses need government co-operation to ensure that large company clients, and the public sector itself, pay bills within thirty days.

® Simplify administrative and fiscal procedures for small businesses.

® The success of network banks, along the lines of the Grameen bank, highlights the urgent need for funding that provides loans for business proposals that regular banks will frequently not consider.

® State guarantee funds for SMEs are not always open to micro-businesses, which limits their potential for growth.

® Income and wage subsidies for entrepreneurs and their staff, particularly when they come from a situation of long-term unemployment, are key to job creation.

® Intermediary agencies bridge the gap between women entrepreneurs and mainstream banks and funding bodies. Operational and financing models have been widely established with the aid of the European Structural Funds.

The Commission’s working group on business creation shows how transnational collaboration enriched the activities of each participating project, to the benefit of its women entrepreneurs. Exchanging ideas and examples of good practice stimulated them to improve and strengthen their own programmes of support. The resulting European Model to support women’s entrepreneurship will contribute to the implementation of the Employment Guidelines and serve as a benchmark for measures proposed by Member States in their national employment action plans.

66

working document · web viewcommunity initiative ~ business creation by women : measures to support...

Documents