A New Boost for Entrepreneurs in Central America and Africa
In 2010, university student Julio Baltodano surveyed the local apparel industry in Managua, Nicaragua, and devised a clever business idea. Together with his friend Verónica Bucardo, Julio envisioned IKO Imagen as a leather and textile manufacturer that would specialize in handbags and brand merchandising, or placing company logos on t-shirts and other products.
But like most aspiring entrepreneurs in developing countries, Julio and Verónica faced daunting challenges, including a lack of business skills and barriers to finance for a business of their size — too large for microfinance and too small for traditional bank loans. IKO Imagen may have never seen the light of day had Verónica not heard about Idea Tu Empresa (“Design Your Business”), a TechnoServe program that used business plan competitions to help entrepreneurs transform good ideas into thriving businesses.
IKO Imagen entered the competition in Nicaragua that year and won. The fledgling business received support and training from experienced advisors as well as some much needed seed funding. A $10,000 award allowed IKO to invest in several pieces of industrial equipment, including a leather embroidery machine.
TechnoServe’s support has been vital…It has allowed us to execute our original business plan.
Verónica Bucardo, IKO General Manger
Today, IKO Imagen has 12 fulltime employees and has grown its annual sales by 50 percent. The company boasts several high-profile clients for its brand merchandising services, including the local divisions of Citibank, Walmart and Save the Children. IKO has also launched a separate brand of personalized products and branched out into accessories for the banking industry.
“TechnoServe’s support has been vital for IKO Imagen,” says Verónica, who serves as IKO’s general manager. “It has allowed us to execute our original business plan.”
Now that IKO Imagen is an established enterprise, it’s primed for the next phase of growth. Verónica has several goals: improve IKO’s raw material supply chain, connect with new markets in Central America and find additional sources of finance.
That’s where TechnoServe’s new program Impulsa Tu Empresa (“Boost Your Business”) comes in. Supported by the Argidius Foundation, Impulsa Tu Empresa is a business accelerator program designed to help more than 800 small and growing businesses fasttrack their development. Launched in late August in Nicaragua, Honduras and Guatemala — and scheduled to launch by the end of the year in Burkina Faso in West Africa — the program will assist high-potential businesses by providing mentoring, market connections and access to capital.
TechnoServe’s research and experience show that small and growing businesses drive economic growth in their communities because they generate jobs, income opportunities and key products and services. In developing countries, where there are more obstacles to success and fewer role models for entrepreneurs to follow, programs like Impulsa Tu Empresa are effective tools for breaking the cycle of poverty.
Promising entrepreneurs were invited to apply to Impulsa Tu Empresa by Oct. 31, 2012. The program primarily focuses on existing businesses like IKO Imagen that have annual sales between $20,000 and $2 million. The winners, determined by a panel of qualified judges, will receive 10 months of mentorship and support.
“Business experts will work closely with the entrepreneurs, sharing knowledge, counseling them and helping them be more competitive,” says Oscar Artiga, Central American regional director for the program.
By 2017, Impulsa Tu Empresa aims to increase sales by $13 million and generate 750 new jobs across the four countries. By delivering the tools, information and connections that entrepreneurs need to overcome challenges, the program will help establish small and growing businesses as catalysts of economic growth for years to come.