Business Consultancy Fund - Brief Description

New market economies often offer few business development services and are poorly equipped to support the needs of emerging micro and small enterprises.  To assist micro and small enterprises (MSEs) succeed in these environments, business centres and other advisory mechanisms must provide appropriate, targeted services.  These services should fit the unique needs of MSE owners and strengthen entrepreneurial, managerial and technical skills.  Despite the clear need for business advisory mechanisms, in most nascent market economies, MSE-targeted advisory services are not in high demand because: (i) entrepreneurs have no experience accessing expert advice and thus do not understand its benefits; or (ii) MSE owners cannot afford to pay for business consultancy services.  

The establishment of a Business Consultancy Fund can overcome these barriers and support the growth of responsive business advisory services.  Ideally, the establishment of the Business Consultancy Fund (BCF, or Fund) will encourage improved service delivery by business service providers to business people and entrepreneurs.  Improved business consultations and counselling should facilitate and promote the growth of a viable and productive MSE sector in the project region, which, in turn, will increase employment and income.

Though a variety of institutional models can be used, in countries transitioning to market economies, BCFs are most often established separate and apart from governmental departments.  In this case, the BCF does not hold the same legal status as a governmental entity and does not hold state registration, but is rather a voluntary instrument established by development organizations.  The Fund is regulated by a set of bylaws or “BCF Regulations” and other documents approved by the relevant parties.

Figure 1: The Concept of a Business Consultancy Fund