BUSINESS DEVELOPEMENT SERVICES- B.D.S.

1. What is Business Development Services?

Business Development Services (BDS) include consultancy and advisory services,
business linkage promotion and training, marketing assistance, information,
technology development and transfer. BDS can be categorised into two groups as
far as SMEs are concerned.
a. First is "Operational Business Services which comprises of those services that are needed for
day-to-day operations, such as information and communications, management of accounts and
tax records, and compliance with labor laws and other regulations.

b. Second is strategic" business services that are used to address medium- and long-term issues
in order to improve the performance of the enterprise, its access to new markets, and improve the
competitiveness. The operational services for SMEs are easily available by many business
development service providers, whereas, strategic services for SMEs are yet to be developed
and utilised.

2. The various entities that are involved in BDS are as follows:

3. SMEs: they are the potential and actual clients of BDS and are at the demand side.
4. BDS providers: are the entities that provide services directly to SMEs. These entities include for-
profit firms (like consultants, lawyers etc), individuals, NGOs, national and regional government
agencies, industry associations, etc.
5. BDS facilitators: they operates as medium to provide support to BDS providers for product
development, capacity building, promoting best practice, external evaluation, quality assurance,
advocacy, etc. BDS Facilitators include NGOs, industry and employers associations, government
agencies, donors; project offices, etc.
6. Donors: are the entities that provide funding for BDS projects and programmes.
7. Governments: like donors, they provide funding for BDS projects and programs and provide an
enabling policy, legal and regulatory environment for SMES and BDS providers as well as public
goods such as basic infrastructure, education and information services.

7. What are the services provided by BDS?

a. Various services provided by BDS are as follows:
8. Market access: market research, market information, trade fairs, product exhibitions, advertising,
packaging, marketing trips and meeting, subcontracting and outsourcing, etc.
9. Infrastructure: storage and warehousing, transport and delivery, business incubators,
telecommunications, internet access, computer access, secretarial services, etc.
10. Policy and advocacy: training in policy advocacy, analysis of policy constraints and
opportunities, direct advocacy on behalf of SMEs, sponsorship of conferences, policy studies,
etc.
11. Input supply: linking SMEs to input suppliers, improving suppliers capacity to deliver quality
inputs, facilitating establishment of bulk buying groups, information on input supply sources, etc.
12. Training and technical assistance: mentoring, feasibility studies, business plans, franchising,
management training, counselling / advisory services, legal services, financial and tax advice,
accountancy and bookkeeping, technical training, etc.
13. Technology and product development: technology transfer /commercialization, linking SMEs
and technology suppliers, facilitating technology procurement quality assurance programmes,
design services, etc.
14. Alternative financing mechanisms: factoring companies providing capital for confirmed orders,
equity financing, facilitating supplier credit, equipment leasing and rental etc.

15. Why Business Development Services (BDS)are important for SMEs

a. BDS play a very important and critical in providing support for the development of SMEs
through a range of business advice, information and support. It contributes to sustainable
development of SMEs by improving the general business environment while addressing
market failures, lack of information ( like market opportunities, rules and regulations, access to
credit, quality standards for export, etc.) which are posing as a barrier to foster economic
development and growth of the area in which they operate. Some of the benefits that are
gained through BDS are as follow:
16. BDS helps enterprises to raise the profitability and enhance the growth and competitiveness thus
directly raising the income level.
17. For micro enterprises, BDS can help in enhancing economic security and incomes, thus
permitting poor entrepreneurs including women, to invest in nutrition, housing, health and
education of their families.
18. Enhanced employment generation as result of growth and development of enterprise may lead to
excess labour absorption, innovation and add value to goods and services,
19. It provides ability and flexibility to enterprises to respond to dynamic and volatile markets.

20. What are the mechanisms to avail the BDS?

a. The mechanisms or options available in order to avail the BDS are mainly divided into two
approaches namely Traditional Development and Market Development.
b. Traditional Development (TD) approach involves creation of an organization/body to provide
BDS directly to SMEs. This is usually done through NGO like Enterprise Development
Agencies, Business Support Centres, Local Enterprise Agencies, Regional Development
Agencies, etc that provides subsidized BDS at no or very low cost. However, this approach
had some limitation like it can lead to local monopoly of the BDS provider, if there is only one
institution in the area, they were supply-driven with vary low outreach thus providing services
to limited number of SMEs, they had lack of financial stability as their only source of finance
was central, regional and local governments etc.
c. The Market Development (MD) approach is comparatively new that focuses on maximizing
outreach to large number of SMEs through sustainable increase in demand and supply of
services primarily by Private Sector Suppliers. They will provide services on payment basis
rather then offering subsidies. It enables SMEs to buy services of their own choice from a
wide array of products offered by private sector suppliers.
 d. The MD approach promotes the increase in suppliers to stimulate demand through discounted
or subsidized services on temporary basis activities like provision of information, market
research, product development, training of suppliers, monitoring and evaluations. All these
services fall into the category of facilitating the market by stimulating demand and supply.

21. Who are the BDS providers at regional, national and international levels?
22. Regional/ State level
a. Local Enterprise Agencies,
b. Regional Development Agencies
c. Private suppliers
d. Consultants
e. Non -governmental organizations

23. National Level

a. State and State-sponsored institutions,
b. Industry associations]
c. Trade and industry chambers

24. International level

a. International Trade Centre(ITC)
b. UN Industrial Development Organisation(UNIDO)
c. International Labour Organisation (ILO)
d. Inter-governmental organisations like European Commission (EC)
e. Organisation for Economic Cooperation and Development (OECD)
f. World Customs Organisation (WCO)
g. Association of South East Asian Nations (ASEAN)
h. Donor agencies etc.

http://www.wasmeinfo.org/resources/24/business-developement-services--bds

Business Development Services for Small

Enterprises: Guiding Principles for Donor Intervention
This resource appears in:

Donor interventions

Donor agencies have long recognized the important contribution that small enterprises
(SEs) can make to poverty reduction, employment and private sector development. SEs,
especially microenterprises, offer both a safety valve for the survival of surplus workers
unable to find steady wage employment and an opportunity for the entrepreneurial poor to
raise their incomes. SEs, especially SMEs, also offer a vehicle for acquiring and applying
skills to raise productivity and private sector growth, providing better wage-earning
opportunities for the poor while raising national income. For these reasons, donors as well
as national governments have attempted to promote the SE sector through support for
financial and non-financial services appropriate for SEs.

After several years of efforts to build a consensus on principles for selecting and supporting
intermediaries in micro and small enterprise finance, the Committee of Donor Agencies for
Small Enterprise Development (see Annex III for membership) turned its attention to
Business Development Services (BDS)the wide array of non-financial services critical to
the entry, survival, productivity, competitiveness, and growth of SEs. The Guiding Principles
presented here grew out of efforts of the donor community to assess the generally
unsatisfactory performance of past interventions in BDS, review current innovations and
good practices, and develop a more effective strategy for BDS as one instrument of private
sector development.

William F. Steel and Leila M. Webster (World Bank Group) Co-Chairs Committee of Donor
Agencies for Small Enterprise Development

Document Information
Document Type Guideline

Author Committee of Donor Agencies for Small Enterprise Development

Year of Publication 2001

Publisher The World Bank

Number of Pages 15 pp.

Region / Country Global /

Primary Language English (en)

Keywords Business Development Services, Subsidies, Donors

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