Chapter 3c: Training

Trainings, workshops, consulting and/or coaching sesssions are recommended to complement lending products at any microfinance organization. Trainings prepare clients to manage a business, build their credit, or find a job. They are also helpful to introduce clients to your organization and the other services and products you have to offer.
There is a wide range of opportunities to host trainings for
your target market. What kind of services to provide depends greatly on what your clients need and what other services already exist. Student-led groups offer entrepreneur and small business development training, workforce development training (assistance applying for jobs, resume writing workshops), and financial coaching.

Classroom-based Business Training

Goal of business training

A good business training program achieves two objectives: building a strong rapport with clients through personal empowerment and teaching them basic business skills.

Business training is a risk-free and inexpensive way of getting to know clients. You can determine their goals, their needs and their business acumen. You can help them run a more efficient business and assess their creditworthiness. Best of all, the close instructor-client relationship — if favorable — fosters valuable referrals.

Training also fills a knowledge gap that exists among too many low-income entrepreneurs: math and money management.

Lend for America members have worked with hundreds of very talented clients in the past few years. They are excellent cooks, jewelry makers, consultants, glass blowers and landscapers. But an alarmingly small amount know how much their products and services cost them. Even fewer can calculate their profit margin. Once a small business owner masters concepts like these, she contributes more to her household income and approaches her business more confidently. Number crunching shouldn’t be the only topic a training course covers, but the instructors and clients should realize it’s the most important. If you can host a training session that builds goodwill among your clients and teaches them how to run their businesses confidently and efficiently, you will enhance your group’s reputation and strengthen your local economy.

How long should it be?

It depends. Lend for America members have conducted classes as short as three weeks and as long as ten weeks (class held once per week). Some groups to less, and some do much more.

The Seattle-based group Washington Community Alliance for Self Help offers a five-month-long course on financial management for low-income entrepreneurs. They start with personal finance and have credit counselors on hand to help clients with debt. They slowly move to business training and eventually prepare clients to file their Schedule C tax returns.

If you can pull off something like that, great. But as long as there’s time enough to build a rapport with clients and to teach accounting, profit margins, and cash flow management, the course is long enough.

Which clients

According to The Intersect Fund, some of the best clients are those with “barely existing” businesses. They have already developed their product or service and have made some sales, but they need help. They need to know how to find more customers, manage cash flow, and figure out whether they are actually earning a profit. This type of person can use your help the most.

The other client type you’ll encounter is the “dreamer.” He or she wants to start a business but doesn’t know what kind. Or, worse yet, they want to start a difficult, capital intensive business but lack funding or experience.

These clients often have well paying but unsatisfying full-time jobs. Their entrepreneurial aspiration is admirable, but their stable situations sap them of the urgency and drive they would need to pull it off.

When you work with owners of barely existing businesses, though, you’ll notice that the money entering and leaving their bank accounts grounds them in reality. They benefit much more from business training.

Who can teach?

A good trainer must:
  • Be outgoing and confident enough to build a strong rapport with clients
  • Understand basic business math
  • Know and subscribe to your organization’s mission
  • Be able to talk about the other services you offer

The good trainer may not be a business school student, but she’s a little obsessed with small businesses: she reads business magazines and books about marketing, and she quizzes local merchants on how sales have been the previous month. She’s into entrepreneurship and eager to share her enthusiasm. She has excellent interpersonal skills and the confidence to manage group dynamics in a classroom.

Fees

Every business training program should charge a fee. It doesn’t have to be much, but it should be significant. Lend for America members charge fees ranging from $15 to $250 for their courses. Fees vary based on the length of the course and sometimes different clients pay different amounts for the same course based on their income level.
Price equals value no matter where on the socioeconomic spectrum you fall. You’re providing a valuable service in your training — one that likely costs a lot more than $100 per client when you factor in the time spent preparing and delivering the training. Conveying the value to clients means having a great course and connecting it with a dollar value.

Training programs that are offered for free have often had problems with spotty course attendance and unengaged clients. Paying clients take your course more seriously — and it forces your instructors to do the same.

What to teach

As long as your training curriculum meets the two vital objectives — building client rapport and teaching business math — it has done its job. The details of your curriculum are secondary.

Some campus-based training programs use curricula like Core Four or the Barefoot MBA. Others compile the best sections from a number of curricula into one they feel works for their clients.

The Intersect Fund arranges its program into the following sections:

• Week 1: Business plan format and mission statements
• Week 2: Finding your customers and pricing your products
• Week 3: Number crunching: cost of goods sold and profit margins
• Week 4: Cash flow management and understanding credit
• Week 5: Registering your business and buying insurance
• Week 6: Marketing and Promotion
• Week 7: An entrepreneurial board game simulation
• Week 8: Social responsibility & compiling your business plan
• Week 9: (optional) Hands-on with Quickbooks

You’ll notice that while the curriculum spends a lot of time on number crunching, it cushions the math with softer topics like marketing and mission statements. The Intersect Fund peppers their course with case studies from familiar companies and assigns homework to help clients grasp the concepts. After each class, the clients’ assignment is to write a section of their business plans. By week eight, they can compile these sections into a cohesive document.

Finding clients

Partnering with local community institutions is the best client-recruitment method for new business training programs.

Try to host your classes in church basements, vocational schools, local banks or libraries. The leaders of these institutions will be glad to have you, and they will help with promotion. And coming to a familiar place will help new clients trust you.

After you have hosted several classes, word of mouth will be your best recruitment source — yet another reason to build a great rapport with your clients.

Call and response

Lectures bore clients and exhaust instructors. Here are several ways to make your training lively and interactive:
  • Employ case studies and have clients discuss them
  • Encourage group work, and have group leaders present to the class
  • Solicit clients’ opinions and facilitate discussion
  • Pepper your discussion of profit margins with simple math questions

These will make your clients more comfortable and your course concepts more relatable. Too much discussion can take you off track, but there’s a balance to be struck between too much conversation and a one-sided class.

One-on-one Technical Assistance

The guidelines below from Elmseed Enterprise Fund’s staff manual are helpful for one on one consulting for entrepreneurs.

1. Listen

It is important to hear what your client has to say both to build a strong relationship and to allow you to give the best advice. Being honest, respectful, and patient with your client is crucial to establishing trust and a positive learning environment. In most cases, the client is the expert in their industry!
Listen to learn about how their business operates before you start making suggestions. Be flexible and responsive to the strengths and weaknesses of your client—figure out what your client excels at and what they need to work on by listening and observing, and then begin to think about how to address these issues.

2. Identify Client Needs

The most important thing you do as a consultant is to figure out what part of your client’s business needs improvement. This happens both by asking questions and by actively observing and listening.

The first thing you need to do is break down your client’s current or planned business. Figure out exactly what good or service it provides, its costs, revenue streams, and market niche. Only once you have this information can you start thinking about the best way to help your client. You’re strongly encouraged to go over the points on page 5 of this document in the “In-Depth Business Analysis” section.

In addition to what determining what the business needs, you also need to work with your client to set business goals. Does the client expect the business to be a complete source of income, or just a little money on the side? Is their dream to open multiple branches of their store or simply to improve the profit margin? Knowing what your client hopes to get out of the business and what role you play in that is crucial. Focus on developing a business plan with your client. This entails thinking through all the components of a business plan and working with your clients to develop an executive summary, cash flow documents, a marketing plan, etc. It is also helpful to provide sample business plans for your client to look through.

Once the business plan is completed, it’s up to you and your client to identify consulting projects that tackle the weak spots of the business. Prioritize! Don’t just jump into a consulting project because it gives you something to do—think carefully about what is most important for the business at this time.

3. Communicate

It is important that both parties know what is going on during and between meetings. As a consultant, you need to adjust your style to your client’s background—including home and family life, culture, education, and business experience. Make sure to set specific deadlines for deliverables—on both sides. Just as you should establish the expectation that clients complete assignments on time, it is important that you complete consulting projects by the date you have discussed with your client.

Be proactive! Don’t just think about your client during the hour or so you have together at consulting meetings. If you see an article that relates to your client’s industry, pass it along. Actively pursue consulting projects—let your client know if you think of something you could help with. And contact your client outside of your meetings—ask if they prefer to communicate via email, phone, or in person between meetings, and then stay in touch.

Ask your client about your consulting style and get feedback—are they happy with what you’ve been doing for them? What and how could you improve?

4. Get help

The inherent difficultly in consulting is that in general you will have less business experience than your clients. If something feels beyond your ability or you are bogged down by too many projects, don’t be afraid to ask for help. Communicate with other staff members. The easiest resource is to reach out to other consultants, departments, or other Lend for America members. See if anyone has ever tackled a similar business problem or has knowledge in that field. The bi-weekly client services departmental meetings are a good time to consult with other staff members regarding a particular issue or difficulty – just make sure to inform the Client Services Directors that you plan to bring something up so that it can be added to the agenda.

Tap into local networks. If something a client asks for exceeds the scope of the services you offer, it’s your job to connect them to an expert in the local community. There are tons of resources out there — from business schools to Small Business Development Centers —that can both professionally assist our clients and help us solidify community relationships.

5. Be Thorough

What makes one-on-one TA useful is that you can provide business advice tailored to a client’s specific needs. When you tackle a problem for a client, do it thoroughly by producing a document explaining possible solutions that gives details specifically related to your client and his or her business. It is not enough to simply research different forms of incorporation, for example—a good consulting report details the application of this information to your client’s business.

When you meet with your client, have an agenda prepared so that neither of you waste your time. Be sure to also set short-term goals at every meeting with your client to ensure that he or she is constantly progressing.

6. Consult, Don't Become A Business Partner

It’s easy to have trouble determining the appropriate level of assistance you should provide for your client—you want to help as much as possible, but without becoming a business partner. FIELD gives an example that helps you begin to see where to draw this line:

Case One: Consultant George
George opens the session asking questions of Sally, the owner of a fine arts
store. He starts by asking what the client has done since the last visit, and about
the progress made. George and Sally next look over financial records, and the
consultant asks questions and makes suggestions about additional columns
needed to reflect the hours she and her brother (her business partner) were
spending as employees of the business. As the business is not yet breaking even,
Sally and her brother are not yet paying for themselves, and also not accounting
for their time. George suggests steps to be taken before the next meeting.
These include adding an estimated salary for Sally and her brother on the cash-
flow sheet and more precisely estimating the time it takes to complete a fine art
piece.

George also suggests that Sally and her brother both come to the next session in
order to jointly consider how better to estimate the amount of labor her brother
invests in each work of art, and to discuss what changes might be made in the
business to move it to profitability. George lets the client set the time for the
next visit and decide whether she will, indeed, bring her brother to the
appointment.

Case Two: Consultant Kelly
Kelly opens the session by asking how business is going. The client, Peter, has a
successful pizza shop downtown. Peter feels that business is going well, and that
all he needs now is just to be spending his time at the store. Then Peter adds that
he is looking for someone to help him with his bookkeeping. Kelly suggests a
couple of options (including her own father). She says that she will be on the
look-out for bookkeepers and will let Peter know when she finds one. Kelly
then suggests that Peter could really use some new pizza stones for the parlor,
and suggests that she go searching for some, and call Peter with the details and
price of the stones when she finds them.

7. Keep Learning

Strive to keep improving yourself as a consultant. Do research: find out more about your client’s industry through trade publications, chamber of commerce statistics, and the internet. Pay attention to newspaper articles about regional and national economic trends. Keep up-to-date about local business organizations. Stay on top of relevant technologies. Whenever you find something useful, pass it on to your client!

8. Keep Records

Lend for America members historically have had problems with institutional memory, so keeping good records on all client interaction makes consulting easier and prepares us for the day when you graduate and someone else has to take over! Always log conversations (whether in person, through email, or over the phone) with your client, and note the projects and deadlines you have established with your client. This is crucial to improving communication within Elmseed and making sure we have up-to-date information on all clients.

Capital Good Fund’s Financial Coaching

This is a one-on-one class to be given over the course of one year with a CGF Fellow. Over three 1.5-hour sessions plus four optional meetings, the client is taught the basics of personal finance such as banking, saving, borrowing, credit, debt, and taxes. Entrepreneurship, health, and the environment are also covered. The class is required for most clients before they can borrow, but is also open to non-borrowing clients as well. This class is an integral part of CGF’s success. The sessions cost $150 total, and are paid in 12 monthly installments of $12.50. Each payment is reported to the credit bureaus to raise our clients’ credit scores. It is a win-win for clients. They learn about finances while simultaneously improving their credit histories.



[1] Elmseed Staff Manual