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Getting to Know Their Numbers

Thursday, October 13, 2016 | Category :

Entrepreneurs Increase their Business Acumen with the Savings Game

How can small and micro-entrepreneurs in the developing world build business acumen in a quick, inexpensive, and effective manner? The Savings Game, a hands-on board-based business simulation, has been designed by BTS and the Savings Bank for International Cooperation (SBFIC) to accomplish just this. United by their mutual objective of providing access to education as means to help people around the world to move out of poverty, these organizations paired up to develop a scalable solution that leverages their global reach and the proven approach of discovery based learning.

The goals of the program are for participants to:

  • Gain basic economic knowledge
  • Understand what entrepreneurial thinking and acting means
  • Understand how to develop small/medium enterprises further, discovering challenges and opportunities on the way forward
  • Build their financial acumen by learning accounting, controlling principles, and how to apply simple financial tools
  • Develop a deeper customer understanding and basic market knowledge
  • Realize market dynamics and competition
  • Understand the interface between microfinance institutions and clients, and realize their implications
  • Adopt a problem-based learning approach

The simulation: practice running the business

Run as a highly interactive multi-day seminar, this business simulation puts participants in the situation of being an owner of a small store, funded by a loan from a microfinance institution, which produces and sells fruit juice. Over the simulation program, each participant gets the experience of running their business for three years – accelerating learning and helping every individual see the business impacts of their actions.

First, individuals acquire a small store and re-make it into an orange juice shop. Next, and throughout the three years, they have to forecast and plan for revenues and costs. They deal with decisions such as acquiring an outdoor table and chairs to put outside their storefront, adding pineapple juice to their offerings, purchasing a vehicle for juice delivery, investing in a fruit processor and new fridge, and more. In addition, they have to respond to unexpected events like:

  • The cousin they are employing in the store calling-in sick
  • Bad quality of raw materials
  • Some marketing opportunities like a local soccer match
  • Complying with increased hygiene standards
  • They get to practice all of these decisions and skills in the safe, risk-free environment of the simulation, and see the long-term business impact of their choices.

Fostering community growth

One of the key characteristics of this solution is the role of the facilitators. As of 2014, over 80 local facilitators had been trained to lead this program – thus further lowering costs and increasing community involvement. To become a local facilitator, each individual must go through three weeks of “train the trainer” certification, plus an additional one-week recertification later to maintain quality assurance and consistency.

Small enterprises, huge results

The Savings Game business simulation has been used by SBFIC project partners in 12 countries (including the Philippines, Ghana, Uzbekistan, Mexico, and Zambia), having been translated into each country’s local language. Since its creation, the simulation program has reached over 50,000 participants.

"It is a different type of business training, other training in the past always left us unchanged."

In Zambia, an evaluation study was developed and deployed to measure the impact of the program. The analysis found that as a result of the program, participants reported:

  • Strong behavioral changes in the management of their business (such as improved record keeping, separation of family and business finances, employment of staff, banking and investment)
  • Improvement in financial performance in the 6 months after the training
  • Increased turnover (on average, over 60%), with the highest rate for the smallest businesses
  • Increased record keeping in all businesses (from 65% before to 92% after training)
  • Profits augmented on average by 1700 kwacha
  • Hiring of their first or additional employees, thus not only continuing their business’ growth but also creating new jobs for other members of their community

Overall, the biggest changes were found in smallest enterprises – now that these individuals have been introduced to professional management, they have the ability to generate substantial growth rates in turnover and profit. Larger enterprises profit as well, by adopting more elaborate and consistent book keeping methods, employing more staff, and steadily increasing their income/profits (doing so at a lower growth rate, but starting at a higher initial level than their micro counterparts).

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