SME Business Support Fund (BSF) is playing a vital role in enhancing profitability of the small and medium enterprises (SMEs) and a number of companies have experienced a positive change in their performance indicators.
BSF chief executive officer, David Monkman told Business Recorder that the BSF provides grants to SMEs that embark on projects related to business development and use consultancy services in this regard. These services could involve marketing, project development, technological up-gradation and IT development among other things.
The fund pays 50 percent of the project charges as grant on behalf of the SME and is a major incentive to ensure that such businesses rely on external expertise to ensure economic success, he said. The Fund was established by the Ministry of Finance with the assistance of the ADB as a pilot project in a bid to expand the use of consultancy services in small and medium enterprises which has so far supported 250 companies across the country.
Giving example, David Monkman said that a company; Euro Foods, a meat-processing concern based in Peshawar has seen its sales grow by 30-percent. The company has created five managerial and 20 labour jobs, increased its production by 30 percent and expanded its services into three new markets.
It began with the founders' interest to expand Euro Foods export market and to realise the company's potential for growth in other areas such as canned products. It also wanted to develop a professional team that could serve its long-term objectives, he added.
Using the support of BSF, Euro Foods hired a reputable consultancy firm (Q-Consulting and Training) that was tasked to prepare a comprehensive business plan for the SME. The business plan would showcase not only the company's strengths and weaknesses, but also outline strategies for future growth.
The consulting firm pointed out-after conducting extensive market research and checking the internal systems of the business where the business should be concentrating its efforts, what it actually needs to do in terms of exports, and how product development and employee development should be considered.
The consultant also forecast sales and exports growth that compelled the company to seriously consider implementing the consultants advice. He claimed the founders of Euro Foods believe that the extensive research and advice provided by the consultant was beyond their immediate capability, and would otherwise require hiring new but dedicated personnel with special technical know-how and different professional orientation than they usually require.
Euro Foods now had a comprehensive report on where it stood and what steps it needed to take to develop its potential. And more importantly, it decided to take those steps. Consequently it experienced a 30 percent increase in local and approximately 20 percent increase in foreign sales. The brand became both profitable and competitive, he added.
He said that business development services (BDS) that comes about through the use of such consultants conducting these exercises, are relatively new to this part of the world, and given that Pakistan is home to a very large number small and medium enterprises (SMEs), consultants stand to offer serious assistance.
Because SMEs often suffer from internally inconsistent practices and compete in such challenging markets, 'learning by doing' can often only take them far. He said the hiring external specialists not only make the job easier, it also makes it more cost efficient.
He further said that Euro Foods is a shining example of how SMEs can benefit from Business Development Services. Their example also validates the often clichéd rhetoric that SMEs in Pakistan have tremendous potential; they just need a push in the right direction to realise it.
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