Succeeding through the
informal way
ARNAUD SEGLA
Bibliothèque et Archives nationales du Québec
and Library and Archives Canada cataloguing in publication
Segla, Arnaud, 1978
[Réussir par la voie informelle. English]
Succeeding through the informal way
Translation of: Réussir par la voie informelle.
ISBN KDP:9781790673070
1. Small business – Management. 2. Informal sector (Economics). I. Wisemen Council.
II. Title. III. Title: Réussir par la voie informelle. English.
Legal deposit
Bibliothèque et Archives nationales du Québec, 2017 Library and Archives Canada, 2017
Book and cover design: ASSOUKA
Cover illustration: © Mavoimages
Translation: Idoron
admin@thewisemencouncil.com
www.thewisemencouncil.com
© THE WISEMEN COUNCIL, 2017
SOMMAIRE
Sommaire 4
Introduction 8
Before You Start 9
BUILD AN INFORMAL COMPANY AND SUCCEEDING 10
What is entrepreneurship? And the informal economy? The informal way? 10
Legal forms 12
The definition, the idea, the mission and the community 13
Where to sell? How much? To whom? And how? 14
The observation or study of the simple market 15
Positioning 15
To prepare (precautions, expectations, logistics, network) 16
Looking for financing 17
To Launch 18
How to manage your business (accounting, marketing, strategy, operations)? 18
Promotion, durability, savings and growth 20
Directed activity 20
WRITING A SIMPLE AND EFFECTIVE BUSINESS PLAN 21
What is a business plan? What is its purpose? 21
Presentation of my model and the approach 22
Purchasing or building a model (plan) of writing 25
Market Study 26
Marketing 26
The financial part 29
Knowing how to write effectively 29
The executive summary of the project 30
A few tips and advice 31
Directed activity 31
CHOOSE A COACH AS AN INFORMAL ENTREPRENEURS 32
What is coaching? An informal entrepreneur ? 32
Types of coaching (consultant, coach and advisor) 32
Strategy as a centre of interest 33
Qualities of a coach (confidence, judgment, wisdom) 34
Experience of a coach (human, professional, entrepreneurial) 35
What methods does it use? (listening, questioning, implication) 36
Monitoring decisions (short-, medium- and long-term impact) 36
Continued improvement (reading, self, experience) 37
Directed activity 38
OPTIMIZING ONE’S INFORMAL BUSINESS 38
What do you need to last and succeed? What are the stakes? 38
Presentation of a few tools 39
Mentorship 40
Solidarity among peers 41
Regrouping 41
Self-learning 42
Resource leverage 42
Sharing of information 43
Philosophy 43
Directed activity 44
APPLYING IT TO ONE’S BUSINESS PROJECT 44
Conclusion 45
This guide has been used as framework for a training introducing entrepreneurship to young informal entrepreneur during a mission of the Centre for International Studies and Cooperation (CECI) for the NGO ALPHADEV in Malika, Senegal. I want to thank here these organizations for the opportunity they gave me to express myself on a professional level as international volunteer. The guide aims to equip the actor, the entrepreneur, of the informal economy so that they can familiarize themselves with the notions and market economy code to transform themselves on a medium to long term. It’s also about sharing one’s knowledge to other actors of the informal sector to contribute to the reflection on economic and durable development.
“Each Human is
important to the eyes of God.”
Introduction
Local economies in countries that receive economic immigration and the country of origin of this flux of migration obey the contexts and dynamics that can be put in perspective to create synergies and to operate to the development of these same migrant populations. The informal economy generally presents an abundant offer in sources (type of distribution and types of actors) and is rich in the diversity of references (in products and services) but it confronts itself to a volatile demand or more precisely a random “willing to pay”. The latter justifies itself by the economic environment characterized among other things by a weak consumer purchasing power and a household confidence that does not aim for the purchasing of pleasures but to those dictated by the strict necessity and the weak occurrence of purchasing based on stimuli where the vector is the publicity or the visual presentation of the sample. In these conditions, building an informal business and succeeding is a challenge that starts with the assimilation of the basic entrepreneurial notions before secondly dwelling on the levers to improve sales, notably by the mastering of the newest declensions of marketing (an adequate promotion of the quality and performance) more adapted to realities of ethnic or informal entrepreneurship and therefore of the community economy. We go towards a rehabilitation of the consumer taken into inertia by the “fear of unemployment” (dead Time) engendering the debt and of the producer taken into attraction by “the comfortable price” (without effort) engendering speculation. This passes by the modeling and later the explanation of the economic mechanisms in play. Then by the invitation to a change in attitude. This guide is nothing but the start of this process.
Before You Start
In this guide, it comes to completing the series of tools that already focused on the structuring of one’s ethnic business (“Business in the box”), integration (“Successful citizen through entrepreneurship”), and strategy (“Ethnic project strategy”). This time we cover the aspects of the business’ creation in the informal economy. My approach is to federate the ethnic economy and the informal economy in what I call the community economy. In fact, there exist not only similarities in the mechanisms, the identity and profile of the actors but also the possibility of creating bridges between the two composites to reinforce the power of the all thus constituted. The five modules that will follow were initially created for apprentices that receive a formation of artisans that have the possibility to embark on their own after a few years of running. However, the presentation takes into account other cases and is easily adaptable and exploitable through other types of informal entrepreneurs. In “Business in the box”, we privileged an alternative approach of what is generally in the market economy and especially in the local economy of the host countries of the ethnic entrepreneurs. Here, I chose to transmit in a relatively simple way the rudiments of formal entrepreneurship to both strengthen the capacities of young actors but especially to permit them to prepare to convert themselves to an economy attitude balancing the market system (Attitude vs System). Does this have a contradiction? Ultimately, the two approaches aim to integrate to the competitive local economies with assets of the ethnic and informal natures that originate with the structures originally put in place: adaptability to the market, strategic simplicity, proximity to the community, solidarity between actors, financing based on personal savings, tangible assets etc. It’s therefore once again a correction of (and not a rupture with) the existent which I propose in the lines that will follow.
“The basic approach of the community economy is to benefit and to simplify the sound results of the market economy to build a knowledge base for the informal economy and then to redefine these concepts in an alternative model adapted to the context of the ethnic economy.”
BUILD AN INFORMAL COMPANY AND SUCCEEDING
What is entrepreneurship? And the informal economy? The informal way?
An entrepreneur is someone that puts in place a project or initiative in an independent way to acquire a revenue.
The informal economy is the ensemble of economic activities that generate revenue of subsistence, that operate with little organization and without direct contribution from the actors at the State’s revenue.
The informal way is an operating mode that uses a simple Attitude (mindset and behaviour) in the nature of an action.
Reminders of the basic notions
• Client: person that buys a product or service
• Merchant: person that sells a product or service
• Purchase: act of buying for oneself a product or service against a payment
• Sales: act of selling a product or service for payments
• Revenue: amount of money acquired after an economic transaction like a sale
• Expenses: amount of money lost after an economic transaction like a purchase
• Income: in a financial statement, the combined incoming cash flow of the period
• Charges: in a financial statement, the combined outgoing cash flow of the period
• Balance: difference between a revenue (sale, product, etc.) and an expense (purchase, charge, etc.)
• Profit: positive balance
• Loss: negative balance
• Risk: hazard linked to a decision or action (economic here)
• Service: immaterial objects sold or exchanged. Example: knowledge, labor
• Product: material objects sold or exchanged. Example: clothes, car
• Chain: ensemble of actors that exchange products and services the same way or in a derived way in a given economic space
• Quality: state of a product or service the presents few defaults or that satisfies the client
• Competitive edge: image of a business before its clients in a market
• Leverage: the act of borrowing money by putting in guaranteed savings
• Credit: act of borrowing money
• Savings: act of putting money aside
• Financing: act of receiving money so that it is used in an activity or business
• Investment: act of giving money so that it is used in an activity or business
• Operations: set of necessary actions to create, transform or destroy a product or service
• Market: physical or virtual space where the clients (or consumers) buy products and services (demand) and where the merchants (producers) sell products and services (supply) at a given price.
• etc.
In one word
“The basic approach of the community economy is to benefit and to simplify the sound results of the market economy to build a knowledge base for the informal economy and then to redefine these concepts in an alternative model adapted to the context of the ethnic economy.”
Legal forms
The legal forms in Francophone Africa are the following: You uniquely create your society:
• The individual business
• The Unipersonal Limited Liability Company (ULLC)
You create your company with many options:
• Limited Liability Company (LLC)
• Limited Company (Ltd.)
• The Company in Collective Name (CCN)
• The Limited Partnership (LP)
• The Economic Interest Grouping
See Comparative table for the choice of legal form, Advantages / Inconveniences table and Proceedings of the constitution and documents required (by country) on: http://www.ohada.com/.
In one word
The informal way is an operating mode that uses a simple Attitude (mindset and behaviour) in the nature of an action.
The definition, the idea, the mission and the community
The definition is the declaration that connects the entrepreneur’s personality to his aspirations to produce revenue.
The idea of the informal business’ project, it’s the description of the object (physical or virtual), of the means, tools and the method to be used to produce revenue.
The mission gives utility to the informal business project for the community or the country.
The community is made up of people who are directly touched by the informal business project. It can be made up of family, friends, support, clientele and regulators.
Where to sell? How much? To whom? And how?
Where to sell?
• Sell where you can establish yourself and attract clientele to the site
• Sell where there is clientele and produce onsite
How much?
• Sell at a profitable price and comprehend the value of the product
• Sell at the market price and arrange yourself to limit costs
To whom ?
• To those that appreciate quality and pay an image price
• To those that use the product and pay a usage price
And how ?
The how depends on diverse aspects that cannot be entirely covered here. As well, it takes into account each other’s aptitudes that are not only innate, acquired or experienced. However, know that the marketing prepares the sale and the sale makes the business come alive.
The observation or study of the simple market
The observation of the market, it’s the study and analysis of all the settings and interactions of the market where we want to integrate our business.
In one word
The how depends on diverse aspects that cannot be entirely covered here. As well, it takes into account each other’s aptitudes that are not only innate, acquired or experienced. However, know that the marketing prepares the sale and the sale makes the business come alive.
It is realized by going to gather information on the members of the community, the actors already in place, the regulators, etc. It also consists of going on the market to know the trends.
It is important to identify the areas where it is judicious to sell, the prices of sales, the types of clienteles and the sales techniques used by other informal businesses.
Positioning
To position is to integrate your informal business in a market area in a way to have access to your clientele to sell at a sufficient price to produce a durable revenue.
It means to describe what we want to do with our business on the market.
Positioning is therefore done as a form of charter and later a personal document (project plan or business plan) before it enters the market.
Make the definition, idea, mission and community more clear.
Reflect on the precautions to take, the expected revenue, the logistical needs and the network of other informal businesses (not forcibly in competition).
To prepare (precautions, expectations, logistics, network)
To prepare is to image all of the possible cases of figures in the informal business’ first days. It entails making simulations and then doing tests with the first clients:
The precautions are an example of emergency savings, measures issued from the observation of the market.
Revenue expectations are the calculation of money that we can make with the project. If a woodworker thinks of selling 3 beds a month with one bed at 10,000 CFA francs his revenue is 30,000 CFA francs. If his charges are 20,000 CFA francs, his monthly profit is 10,000 CFA francs.
The logistic is the set of material and monetary sums necessary to start the activity and to exercise it during its first few months.
The network is the set of other actors in the chain and of the market where we want to integrate ourselves. It can be made up of a help or of a curb to our activity.
Looking for financing
Searching for financing is generally done starting from a document summarizing the elements of the informal business project and with the help of a short oral presentation (the pitch) if possible.
In the formal economy, the business plan and pitch serve to present projects but for simplicity purposes for the actors of the informal economy, I rather propose an informal business “project plan”.
In one word
In the formal economy, the business plan and pitch serve to present projects but for simplicity purposes for the actors of the informal economy, I rather propose an informal business “project plan”.
Once the project plan is established it is sent to donors and potential supporters of the project to ask for financing. The sending is made up of the project plan and an introduction letter and it asks for physical maintenance to present the project, to defend it and to respond to eventual questions.
Here is the summary of a simple project plan:
I. Introductory summary
II. Mission and summary of the project
III. Observation and study of the simple market
IV. Strategy
V. Financial analysis
VI. Annex
The ideal format for writing is that of a PowerPoint, associated with a PDF of this same presentation. Word can also be used to reduce the risks of non-conformity. An introductory summary is attached as a form of letter or email body text.
To Launch
To launch, you should meet a few starting conditions:
• Positioning is returnable
• The project plan is written
• The logistic needs are met
• Emergency savings are available (leverage)
• The place, price and clientele are identified
• The financing is 70% realized
• A launching activity is planned
How to manage your business (accounting, marketing, strategy, operations)?
Accounting
• Record revenues and expenses daily and calculate the balance
• Calculate the total balance for the month and pay salaries and charges, invest in the maintenance of the business and put the rest in savings
Marketing
• Identify the interests of the clientele and its buying power
• Plan and preview a budget for promotional campaigns throughout the year according to seasons, events or holidays
Strategy
• Give yourself growth objectives for your business step by step
• Continually adapt by corresponding the states of your business with those of the market
Operation
• Master your career, the cycles of production and of the market
• Offer the best quality possible all through getting the best economic performance for your business
In one word
The ideal format for writing is that of a PowerPoint, associated with a PDF of this same presentation. Word can also be used to reduce the risks of non-conformity. An introductory summary is attached as a form of letter or email body text.
Promotion, durability, savings and growth
The promotion of the project to new people in the community or network permits you to once again establish a partnership and to grow the activity of your informal business project.
Durability is to research once the project is put in place. It aims to dispose of a stable and transmissible source of revenue under an individual or community heritage.
Savings is essential as an alternative of self-financing and for the improvement of economic power by leverage.
Growth should not uniquely aim for the most but also the best in the entrepreneur’s personal accomplishment and well-being.
Directed activity
Take your time to think about the knowledge transmitted in this module and to apply them in your informal business project.
Imagine the model of a business project and pass by all the steps of reflection of construction.
WRITING A SIMPLE AND EFFECTIVE BUSINESS PLAN
What is a business plan? What is its purpose?
A business plan is a synthesis document of an economic activity in progress or that will be launched.
It serves to:
• Present essential elements of a project to its investors
• Structure the thoughts of the business project leader
• Its strong points are the executive summary, the market study, the marketing plan and the financial planning
There exist various models as a function of country and sometimes of activity types.
In one word
There also exist more and more numerous alternatives to the business plan such as the SynOpp method or the business project plan which I develop.
There also exist more and more numerous alternatives to the business plan such as the SynOpp method or the business project plan which I develop.
Presentation of my model and the approach
There exist many models available online, if not we can use the ones used by donors or the ones generally used in our area.
The SAJE model generally intervenes with the following structure:
PROJECT SUMMARY
1
GENERAL PRESENTATION
1.1
THE BUSINESS’ MISSION
1.2
THE VISION OF THE PROMOTEUR
1.3
THE PROMOTER(S)’S PROFILE
1.4
LEGAL STRUCTURE
1.5
THE BUSINESS IN 5 YEARS
2
MARKET STUDY
2.1
DEFINITION OF THE ACTIVITY’S SECTOR AND THE MARKET
2.2
PRESENTATION OF THE COMPETITION
2.3
SWOT ANALYSIS
2.4
PRESENTATION OF THE PROJECT’S ENVIRONMENT AND ITS SENSIBILITY
2.5
UTILLITY OF THE PROJECT
2.6
POSITIONING
3
IMPLEMENTATION (THE BUSINESS MODEL CANVAS)
3.1
KEY PARTNERS
3.2
KEY ACTIVITIES
3.3
KEY RESSOURCES
3.4
VALUE PROPOSITIONS
3.5
CLIENT RELATIONSHIP
3.6
CHANNELS
3.7
CLIENT SEGMENTS
3.8
COST STRUCTURE
3.9
REVENUE STREAM
3.10
PRODUCTION PROCESS
4
MARKETING STRATEGY (MARKETING MIX)
4.1
PRODUCT STRATEGY
4.2
PLACEMENT STRATEGY
4.3
PRICING STRATEGY
4.4
COMMUNICATION STRATEGY
5
FINANCIAL FORECASTS
5.1
CALCULATIONS HYPOTHESES
5.2
FINANCING STRUCTURE OF THE PROJECT
5.3
PLAN OF SALES
5.4
PLAN OF PURCHASES
5.5
CASH BUDGET
6
ANALYSIS
7
ANALYSIS OF RISKS AND CONTINGENCIES ANNEXES
The approach of the writing of your business plan consists of presenting in a concise, pertinent and effective manner, the information concerning the project that we want to finance or transpose. Here are what is needed to keep in mind during the writing (see also advice and tips) :
• Put yourself in the place of the reader that must attribute funds
• Have critical thinking in your arguments and be explicit
• Make your sentences short and do not elaborate on narration
• Go straight to the point
• Remove all doubts for your project. An analyst who doubts has little chances to finance you.
• Avoid spelling mistakes and reread.
In one word
La démarche de rédaction du plan d’affaires consiste à présenter de façon, concise, pertinente et efficace, l’information concernant le projet que l’on veut financer ou transposer.
Reflecting on your business
To write your business plan, you must either :
• Take your time to know your business well or acquire entrepreneurial notions, or
• Take your time to deepen your reflection on your project during the writing while being as realistic as possible.
Go to “Building an informal business and succeeding” to have an introduction to informal entrepreneurship.
Purchasing or building a model (plan) of writing
Here is a non-exhausting list of model sources to write a business plan:
• Use models that are available online
• Use models given by donors
• Use models given by trainers in entrepreneurship
• Use models explained in books
• Use business plan creation websites
• See a person responsible in HR
Avoid improvisation (freestyle). This is a formal thing!
Market Study
It is the heart of the business plan. It is unavoidable and improves the long term chances of success for the business.
It consists of identifying all the settings (actors, trends, interactions, opportunities, issues, etc.) that can influence the business after its launch, one at a time for its expansion rather than its failure.
It means to dispose the maximum amount of information to make an idea to simulate the business’ behavior in its economic environment.
The market study uses generally known tools that facilitate the analysts’ readings : PEST analysis, Strengths-Weaknesses, Opportunities-Threats, AIDA, market segmentation, etc.
Marketing
Marketing is the science of tools and methods that prepare at the sale of a product or service.
To be more complete, we can say that marketing is the set of means of communication between the business and the public consumer to induce a short-term or permanent behavioral change in the latter. We use marketing to choose the definition and target markets throughout the study and, if necessary, the market’s segmentation. We want to understand the consumers’ behaviors and to find methods to influence them which brings to making marketing plans (strategies). In our case we want to especially emphasize the promotion of the value of our product or service to a large set of individuals (the popular strata).
Did you know that organizations or associations with a non-lucrative goal and the government also use marketing to pass messages (ethics, fundraisers, social, public spirit, etc.) to the public?
There is a procedural marketing planning model called marketing mix. It has 4 axes (7 in certain models) known as the 4 P’s: Product, Price, Place and Promotion.
The Product: You determine and master the characteristics and attributes of your product or service to present them to the client. The product needs to be as attractive as possible and must bring a utility to the community. Certain people also say to exceed the client’s expectations.
The Price: You determine the price of your product or service to if possible make a sales profit. Generally there are two options: follow the market price, that is, practiced by other entrepreneurs that sell the same product or service. You must therefore arrange yourself so that the price of the confection or acquisition of the product or service (more precisely the cost of the cost, “the price where it costs”) is the lowest possible to make a profit. The effort is internal to your business. Apply a margin of your choice on the cost price of your product or service (that we can call outgoing since it is coming out of your business). The margin corresponds therefore, to some details near (the fees) to the profit that you get. We therefore act when we are the most alone to propose the outgoing price or when we are in a position of force (shortage, niche, etc.).
The Place: You determine how to apply the outgoing cost to the client so that this person can buy the product. This involves the network or means of distribution and the sales’ location. The exposition of the product or access of it to the client must be the easiest way possible and at an adapted price.
The Promotion: It consists of joining the client and convincing it to buy your output. There exist many techniques such as publicity, free samples, subscription and loyalty, reductions on the price, bundling, etc. In our case it remains the sinews of the war since how we have the explained the client still called “the demand” is not ready to make pleasurable purchases because of its confidence and its wealth.
Globally, the technique of promotion that I encourage consists of making acknowledge the value and quality of your output to the client. Trigger his or her act purchasing by sensitivity to the reality of the price: “I buy at the real value” (“fair value”).
Simply, it is to identify the customer and to picture its profile, do an inventory of marketing tools to reach him and plan the action of communicating on the product or service to trigger the direct or deferred purchase.
It is good to form yourself, in a more specific way, to these notions and techniques since they are a science in an entire part that cannot be covered in detail here that we fly over the essentials of the knowledge to possess. You are free to deepen the aspects that interest you the most or that call you the most.
Marketing comes after the case study to prepare the monetization of the settings identified in the market study and to prepare the hypotheses of the financial part.
The financial part
This part is often detached from the business plan. It is a certain number of calculations that aim to establish partly the financial states, including the cash budget, and later the project’s performance ratios.
In one word
Globally, the technique of promotion that I encourage consists of making acknowledge the value and quality of your output to the client. Trigger his or her act purchasing by sensitivity to the reality of the price: “I buy at the real value” (“fair value”).
It is good to purchase yourself a canvas to establish the financial states or to get help from an accountant.
It is recommended to do a projection over three years and sometimes according to pessimist, nominal and optimist arrangements. It all depends on the pertinence that the type of presentation brings.
Some analysts read the executive summary of the project and pass directly to the financial part. That is, this shows the importance of writing it carefully.
Knowing how to write effectively
Succinctly present yourself as well as the business’ mission.
Make links between the project, the market, your strategy (marketing, finance, operation, risk) and yourself.
Limit yourself as much as possible to 20 or 30 pages according to the industry, nature of the project, investment or experience.
Show the key numbers of your market study.
Do the executive summary of the project last by summarizing the order and showing the most important elements of your argument.
Conclude or start by asking what you want to the reader. If you start the whole summary acts as a justification of what you asked. If you ask during the conclusion the whole summary serves to prepare the conclusion which must be powerful and precise.
The executive summary of the project
In this part you do the synthesis of your entire business plan.
A person that reads nothing but this summary must have an idea of what you want to do and must want to read in detail in the document itself.
As its name indicates, it is a summary. The techniques of summarization are normally learnt at the end of high school but if that defaults you, you can withdraw one or two sentences in the order of the business plan’s writing, then reformulate it all. Reread and add specific numbered arguments. Reread once more to see the coherence and evolution in the argumentation.
End or start by specifying what you are asking in a precise and explicit way.
A few tips and advice
A few tips and advice were given throughout these modules. Here is what can be added:
• Have a fluid style
• Write short sentences if possible (subject, verb, complement)
• Be in a stable emotional state: simulate without speculating
• Have your work reread by a person that knows how to be objective
• The classic format is a Word text editor, but PowerPoint or the infographic are more and more used
• Put it in PDF format if possible
• Prepare a short pitch on your project
• Make multiple updated versions of your business plan
• If you print it, take care of the result and binding
Directed activity
Take the time to think about the knowledge transmitted in this module and to apply it to the case of your informal business project.
Write a short business plan but by respecting the essential of the structure for a project that you have or an imaginary project.
CHOOSE A COACH AS AN INFORMAL ENTREPRENEURS
What is coaching? An informal entrepreneur ?
An entrepreneur sometimes needs a strategic reinforcement or the backing of an expert that masters the profession. It is at this moment that he can solicit a coach.
A coach is a seasoned entrepreneur or a specialist of the job that shares his experience and intervenes to optimise economic performance, the quality of the output or the competitiveness of a business.
The informal entrepreneur is like its homologue of the market economy except that it evolves in a less structured environment of obedience that has dynamics that are a little model-able and predictable. The notions of hazards and the “invisible hand” are more present.
Types of coaching (consultant, coach and advisor)
According to the degree of implication in the approach of the support, we define 3 types of profiles.
The consultant. He implies totally and does chores for the entrepreneur on the basis of information collected by the latter. He takes the responsibility of the result of actions that were undertaken and of decisions. He walks the road on behalf of the entrepreneur.
The advisor. He implies but keeps a distance from the responsibility of the result of undertaken actions. He accompanies and directs the entrepreneur in his decision making. He leads the way and takes the hand for the entrepreneur to follow.
The coach. He keeps a distance from the responsibility of undertaken actions and decisions. He operates by questioning to open the spirit of the entrepreneur and to bring him to find the solutions to his problems himself. He leads the way so the entrepreneur can follow him without taking his hand.
In one word
The informal entrepreneur is like its homologue of the market economy except that it evolves in a less structured environment of obedience that has dynamics that are a little model-able and predictable. The notions of hazards and the “invisible hand” are more present.
Strategy as a centre of interest
The essential element that most entrepreneurs have by default is strategy.
This gap is ideally filled by experience or expertise from the coach, consultant or advisor.
The coach orients the entrepreneur towards judicious choices for his business thanks to the realization of certain realities, information or knowledge.
The entrepreneur defines its strategy starting from its reflection and of the coach’s questions and the coach orients the entrepreneur into strategic choices starting from its perception of the project’s environment.
Coaching is not really a learning occasion or a reinforcement of capacities but rather of awakening and autonomy.
Qualities of a coach (confidence, judgment, wisdom)
The coach is a resource for the entrepreneur and must have a sufficient amount of charisma to serve as a reference and example. There exist three elements to serve to know and adopt a good coach.
He must have confidence in the entrepreneur (without presuming) and in his capacities to inspire confidence. Being at peace with himself and if possible having regulated the majority of his interior questionings or being, by default, in a consolidation phase of his personal accomplishment and of his maturity.
He must develop his judgment. It is good that he makes proof of realism, of good judgment and of rigor in his analyses. Knowing how to be objective and saying things as he sees them in all assertiveness. It serves to grow his credibility.
He must show proof of wisdom and admit his insufficiencies. He must know how to say he does not know and find the missing information. Must have an open spirit and be open to criticism.
Experience of a coach (human, professional, entrepreneurial)
After life skills, it is good to evaluate the knowledge sources of a coach, that is, his wealth of experience.
Human experience linked to maturity gives a certain number of material for coaching. Transposable life examples often facilitate the illustration of abstraction concepts to the entrepreneur.
Professional experience must offer technical tools, their mastering, as well as an intellectual level to face the needs of entrepreneurs.
In one word
It is good that he makes proof of realism, of good judgment and of rigor in his analyses. Knowing how to be objective and saying things as he sees them in all assertiveness. It serves to grow his credibility.
Entrepreneurial experience is the most specific and pertinent for an entrepreneur when the coach is capable of transferring his knowledge or to adapt it.
What methods does it use? (listening, questioning, implication)
The coach’s expertise permits to make the difference and to satisfy or not the entrepreneur. He uses minimum three techniques or tools:
Listening represents 30% of the coach’s work. He takes notes of the weaknesses stated by the entrepreneur to better select the questions to help improve the entrepreneur’s competencies.
Questioning represents 50% of the coach’s work. He brings the entrepreneur to gain consciousness in internal or external elements of the business and to profit on them for his strategy.
Implication represents 20% of the coach’s work. He facilitates the assimilation of identified notions by the entrepreneur by asking him to be the actor and decision maker of the elaborated strategy together.
Monitoring decisions (short-, medium- and long-term impact)
At each planned or executed action, it is good to monitor to not lose the benefit of the work that was done, to adjust and to learn from experience.
Short-term impact are actions and decisions that are often linked to their applicability.
At medium-term we talk about effectiveness and the undertaken approach with the coach.
At long-term we judge the durability of the global strategy put in place.
Continued improvement (reading, self, experience)
A good coach must ideally stay informed of the trends that affect the market and career. Each generation of entrepreneur that he encounters will question his obsolescence. There exist simple means to stay up to date:
The reading of an article or blog of experts on the economy, entrepreneurship or certain particular sectors. The sources are more and more numerous. It is good to make your selection of information and to not suffer them.
Self-formation to current and pertinent coaching techniques permits to offer a quality service.
Practicing and criticising yourself acquires a solid experience that goes by property enhancing. Do not hesitate to ask for feedback of supervised people or to situate yourself relative to another coach in terms of applicability, effectiveness and the durability of your supervision.
In one word
At each planned or executed action, it is good to monitor to not lose the benefit of the work that was done, to adjust and to learn from experience.
Directed activity
Take the time to think about the knowledge transmitted in this module and to apply it to the case of your informal business project.
In pairs, play the role of the coach and of the entrepreneur on projects you imagine or have, one at a time.
OPTIMIZING ONE’S INFORMAL BUSINESS
What do you need to last and succeed? What are the stakes?
The performance and success ingredients are minimally:
• A good structure of the business project
• A good positioning on the market
• A good deployment and growth strategy
• A good attitude of management
The main stakes for the economy are:
• The creation of wealth and value
• The re-appropriation of ethnic or informal identity through endogenous models
• Economic affirmation and development
• Consultative and decisional power of the communities (including the one you are part of)
Presentation of a few tools
Federated management: consists of federating a leading team around a vision and to make responsible each person in the decision making aiming the pursuit of this vision. It is a more informal form of functioning in cooperative mode. It however has a leader for each type of project.
Dynamic strategy: It is based on the continued adaption to the market such as the structure of the business and its environment are taken into consideration throughout the project’s activities.
Simple accounting: These are the bases of accounting permitting you to follow the performance of your business. It goes from the simple journal of recipes and expenses on the dashboard.
In one word
Simple, community and « viral » marketing: This notion is based on the power of number and solidarity that communities are capable. It, therefore, is good to make proof of leadership.
Promotion: It is the lively part of marketing. It aims to sensitize and habilitate the consumer of his community to take action in the sense of confidence, pleasure and richness.
Simple, community and « viral » marketing: This notion is based on the power of number and solidarity that communities are capable. It, therefore, is good to make proof of leadership.
Rotative financing: Still called « tontine», it is one if the pillars of informal economy. It permits you to regularly contribute in groups and to periodically receive the total of flowing capital.
Participative heritage: It is a proposition of crowdfunding where the actor of the community economy proposes temporary or partial property of its project to a stakeholder investor to get a leverage with the activities of the project and therefore reimburse the investment and create richness. He cedes a part of the power to the investor or the investor can stay passive. The difference with micro-financing is that it is realized by phase or by projects.
Many of these notions are part of experimental results where the frame is near the concepts of the market economy. It serves as, I repeat, adaptation as an alternative to entrepreneurial essence known as “classic” or “formal”.
Mentorship
Mentorship shows a relationship of accompaniment in which an experienced person, the mentor, offers his advice and knowledge in the frame of personal development of another person, the mentored, who hopes to improve their professional or entrepreneurial knowledge.
Mentorship is a relationship of support based on confidence and mutual respect. There cannot be any economic interests shared to justify the relationship.
The mentor is a person that offers their time to transmit informal notions and tactics to improve the tangible competency of the mentored.
The mentored does not need to reward the mentor but a knowledge of the implication is appreciated.
Solidarity among peers
Mentorship and coaching are somewhat vertical relationships.
Solidarity among peers under the form of regrouping, association, friendlies, etc. allows for a horizontal dynamic.
The goal is to share the experience witnessed (lessons learned) on the job and to capitalize on the knowledge of case figures (contingency).
What is conveyed is the information to serve as strategic richness.
In one word
Mentorship shows a relationship of accompaniment in which an experienced person, the mentor, offers his advice and knowledge in the frame of personal development of another person, the mentored, who hopes to improve their professional or entrepreneurial knowledge.
Regrouping
A lot of informal businesses have as a vocation to be individual businesses but regrouping in GIE or in cooperatives is sometimes more interesting.
It notably allows for resource leverage and asks for a good entente between the associates or the clear statutes in the documents of the constitution.
Regrouping is the strategy of affirmation on the market.
It allows you to reduce the sources of offers and to better orient the action of promotion before the consumers.
Self-learning
Trends and knowledge evolve constantly.
We must learn to be autonomous through the self-learning of techniques, strategies and models that characterize the job.
The simple sources of knowledge and information are:
• The internet
• The media
• Social media
• Professional associations
• Free or paid workshops
It is important to always stay connected to others or on the lookout for new things.
Resource leverage
Resource leverage consists of the sharing of acquisition, transport, management and sales fees.
Pooling resources asks questions of sovereignty loss and sometimes leads to long negotiations for the repartition of responsibilities and property.
The goal is to especially make savings of cost and of scale and not to merge the assets of structures.
It is also possible to constitute a group to present the best guarantees and to access resources that we cannot claim by ourselves. It is the case of certain credits.
Sharing of information
« Information is the link of cohesion of a community» It leads to realism in the quest of money, and therefore economic power.
It is good to have a clear idea of the market’s state through objective observation or the transmission of part of a sure source via a canal that does not introduce bias.
Imagination and extrapolation, when it is not framed or lit, has risks.
Speculation introduces a bias to the information by changing its value from the real to the surreal.
Innovation is the fruit of a guided and dialectic form of speculation that makes use of known elements such as material in an application and a new context.
Philosophy
Informal entrepreneurship is characterized by the continued effort of its actors. However, the revenues have long time depended on random factors. By eliminating the bulk of the thinking in the strategy of these structures, we durably aim for a better performance not only through the mastering of the mechanisms that favor the acquiring of a desired result (Time) but also by the continued adaptation to the realities of the market (Providence). The base of this process passes by personal definition and towards the project of the informal entrepreneur therefore by the quality of his/her first intention. Positioning and later economic activity are only effective once the attitude is maintained in honesty, that is, in the realism and simplicity in the management’s decisions. This, reinforces the importance and knowledge of oneself and of the laws with a dose of faith to succeed and accomplish.
Directed activity
Take the time to think about the knowledge learned in this module and to apply it in the case of your informal business project.
Select some tools that you can use to improve the performance of your informal business and say in a group what you expect from them as a matter of results. Discuss.
APPLYING IT TO ONE’S BUSINESS PROJECT
It is time to launch.
Here is a case study to serve as an example to those that have no physical animation.
You are a young man or woman that was not able to complete a university cycle or learn a career. You are unemployed and you have a fledgling family to take care of. You sometimes ask for money from other family members to survive and face more urgent purchases. Imagine a business project that you can put in place to acquire your financial independence. Serve yourself with the notions acquired here to structure your approach to the best of your comprehension. If needed get help or ask for our intervention.
In one word
Serve yourself with the notions acquired here to structure your approach to the best of your comprehension. If needed get help or ask for our intervention.
Conclusion
The basic codes of formal entrepreneurship can be introduced to actors of the informal economy if we carefully simplify their experience of these notions. Just like their homologues of the market economy, informal entrepreneurs have the challenge to find opportunities for their products and services and to improve their sales. This passes by the initiation of an alternative approach (one more time) of marketing to play on the consumer’s confidence, pleasure and wealth among other attitudes. The major challenge here is to find and grow the right target audience or market by applying the right strategies when we agreed to prioritize and to honor the personal project that is inside our Soul and that is detected at the step of the definition Therefore, information recourse (a component that regulates the asymmetries of the market) before the latter (through sensitization and habilitation) is a potential lever to orient the consumer’s attitude in a sense that is profitable to the entire community by facilitating the circulation of money. The definition of this approach aims to finally take into account the informal dynamic as the alternative force and motor of the local economies and not anymore as the proof of incapacity of the concerned states to consider the result of the lower classes and to fully integrate them to the creation of wealth and value. It is amongst others the essence of my work under the model of the Ka Method that will soon be presented in a matter of time…
“The resurgence of an informal economic model should not be ignoring the legacy of concepts from other currents that have long prevailed, but rather offer a market alternative vision to place human beings in the core of the action and the policy of economy. It is the same in terms of identity and spirituality.”
Photo: Awa Lake Diop
Arnaud Segla M. Sc., M. Sc. Admin., CAPM. Consultant, Trainer and Coach specializing in ethnic, informal and corporate entrepreneurship. I organize and animate learning activities and accompany many entrepreneurs in the attaining of the objectives of their business project.