Decent work and economic growth are critical factors in tackling global poverty. In 2013, Argidius set out to answer the question: “How are entrepreneurs best supported to grow and generate employment?” The findings of this research are available in its new report, How to Fulfill the Potential of Business Development Services Using SCALE.
The new SCALE report and toolkit offers enterprise support organizations, their funders, and their partners guidance to implement evidence-based practices that boost small business growth and job creation. The report and toolkit:
- Brings together almost a decade of findings from across the sector, highlighting five key evidence-based characteristics that boost small business growth and job creation.
- Suggests small changes that have been found to yield significant benefits to enterprise growth.
- Offers business development service (BDS) providers and funders guidance on the five characteristics, including case studies and prompts for reflection.
- Provides accompanying tools help organizations implement evidence-based practices, including a diagnostic tool for BDS providers, a version for funders, and a curated reference list to support in the implementation of specific practices.
You can access the full 121 page report and toolkit here, and to save you some time, we’ve included a high-level summary of key takeaways below!
[Editor’s note: Looking for a copy in another language? Translations are available in Spanish, French, and Portuguese.]
What is the SCALE framework?
SCALE is a framework designed to increase the effectiveness of business development service (BDS) programs along five dimensions:
Rather than being a prescriptive framework, SCALE is a lens through which to look at a business development program. For enterprise support practitioners, this can demonstrably suggest ways to improve their impact. For a funder, it can help one see what good can look like and how to help grantees achieve better, more impactful results. Often these improvements can be quite small yet have compelling effects.
Below, we’ll explore each dimension in more detail:
S = Select the right enterprise
The first dimension to consider is selection, or the process of deciding which entrepreneurs and enterprises your BDS program works with. This goes both ways: you want to select enterprises you can add the most value to, while also clearly communicating what your program offers (and what you expect from participants) so that enterprises are also empowered to select the best BDS program for their needs.
Here are a few concrete suggestions from the report to improve effectiveness along the Selection dimension:
- Establish clear selection criteria on which you’ll profile enterprises and entrepreneurs
- Leverage referrals from past and current participants / ecosystem partners
- Set clear and realistic expectations for enterprises
- Segment your portfolio and tailor the approach
- Make selection a multi-stage process to periodically assess partnerships and allocate resources to enterprises that are most engaged and can derive the most value from the program
- Integrate feedback loops to inform selection criteria moving forward
Why is good selection important? Argidius found that good selection improves the performance of your program, enables you to better tailor your program(s) to specific enterprises needs, enables peer-to-peer learning within cohorts, and enables the identification of entrepreneurs who are motivated to grow and ready to make the changes necessary to succeed.
C = Charging enterprises to improve performance
The second dimension to consider is charging a fee to participate in your program. As the report explains, charging is about finding the right balance in a price point that encourages engagement and learning, but does not exclude target firms.
Here are a few concrete suggestions from the report to improve effectiveness along the Charging dimension:
- Communicate the value of the program to entrepreneurs, and the value of charging to staff and funders
- Build relationships based on value-add, rather than giving
- Define and test the appropriate level of contribution
- Diversify income streams to strengthen financial sustainability
Why is charging important? Argidius found that charging has enabled improved job creation and return on investment, helped BDS providers select the right candidates, and increased engagement in their programs.
A = Address problems
The third dimension to consider is addressing problems. As the report explains, we learn best by problem solving, so BDS programs that can engage participants in solving their own problems lead to greater learning and growth. To address problems, entrepreneurs must determine why they arose, learn how to solve them, and understand how to avert them.
Here are a few concrete suggestions from the report to improve effectiveness along the Addressing problems dimension:
- Assess enterprise problems accurately
- Build relationships based on trust
- Facilitate learning among peers who face/have overcome similar challenges
- Make business education relevant, engaging, and easy to apply
- Allot time for learning to be applied
Why is engaging in problem solving and peer to peer learning important? Argidius found that helping entrepreneurs solve their problems (instead of teaching them what they “ought to know”) fosters growth and productivity, and in group settings it can deliver impact at lower costs by promoting peer-to-peer learning.
L = Learn by evaluating enterprise performance
The fourth dimension to consider is learning. Effective learning entails assessing the extent to which small and growing business (SGB) growth is being supported, gathering feedback to understand what is and isn’t working, and using knowledge generated internally and by others to make improvements.
Here are a few concrete suggestions from the report to improve effectiveness along the Learning dimension:
- Collect relevant data points, ensure entrepreneurs obtain value from reporting, and be relational (three key indicators are revenue, employment, and investment)
- Support enterprises’ collection and use of data to manage their performance and improve their businesses
- Experiment with different approaches to improve delivery
Why is it important to evaluate and learn? Argidius found that performance management allows BDS providers and funders to identify where improvements can be made, adapt accordingly, and increase impact. It also found that enterprises that better collect and use their own data improve their businesses performance.
E = (Lead by) Example
The fifth dimension to consider is leading by example. As the report explains, when BDS providers continue developing their own organizations, they’re better able to support enterprises. Implementing good practices internally can help BDS providers deliver enterprise growth outcomes with increased reliability and at greater scale.
Here are a few concrete suggestions from the report to improve effectiveness along the leading by Example dimension:
- Have a clear and focused strategy
- Integrate a governance structure in your organization that includes successful entrepreneurs
- Build a well-organized, empowered, and capable team to enable your organization to deliver and grow
- Diversify your income streams to strengthen your financial sustainability
Why is it important to lead by example? Argidius found that addressing internal challenges can increase impact, attract more broad sources of funding and resources, and that organizational development is key to the long-term growth and financial sustainability of BDS providers.
When it comes to building a more equitable and sustainable future, small and growing business growth is key. And as the SCALE report makes clear, one of the best ways to achieve that is to work together – strengthening not only our own support services, but the entire entrepreneurship ecosystem as a whole.
We hope you’ll join us in helping more social enterprises reach their world-changing potential – and now, it’s easier than ever to get (and give) support. Earlier this month, together with SAP, TRANSFORM, and Unilever, we launched a new social enterprise support program called the TRANSFORM Support Hub: a global, cross-sector platform that connects social enterprises with corporates, peers, learning content, and a global community of pro bono professionals to deliver market-based solutions for the Sustainable Development Goals. Learn more about how you can get involved here!