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financially viable training for microentrepreneurs - English capacitación financieramente viable para microempresarios - Spanish

Financially Viable Training for Microentrepreneurs: the Business Model of ACCION ABCs of Business

Topic : SME Finance

This Insight considers the question of whether organisations can offer business training services to microentrepreneurs and recover their costs so they can operate sustainably over time. It notes that microentrepreneurs have limited ability to pay for such services, and the large amount of capital required to develop them makes it difficult for organisations to break even without donor subsidies.

In reflecting on the sustainability issue the short paper describes the business model of the ACCION ABCs of Business training program, and its efforts to promote financial viability in its own operations and the operations of the institutions to which it licenses its training materials. It also details lessons ACCION has learned about providing sustainable business development services and how lessons were incorporated into the program’s structure.

The paper begins by discussing funding start-up costs and the challenge of developing an effective structure to provide large-scale training. In particular, it is highlighted that the model had to provide:

Significant coverage and impact on the clients receiving training
Ability to recover costs (i.e. achieve financial sustainability)
Ease of replication in different settings around the world

Striving for complete cost recovery is then discussed looking at: cost recovery for the ACCION ABCs of Business team, cost recovery over time for the ACCION ABCs of Business team and cost recovery of local training institutions. The paper then expands further on finding local training institutions in terms of both the qualities it seeks and how it actually seeks them out.