Microenterprises: The Hidden Engine of Economic Growth

Microenterprises: The Hidden Engine of Economic Growth

Organization type: 
Project Stage:
$250,000 - $500,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

CREA provides the women with the tools and skills they need to become successful micro entrepreneurs by giving them access to tailored basic business education in their own communities and personalized business consulting to improve production processes, product packaging and image, quality standards, etc. to help them reach new markets and be more successful while providing employment and income.

About Project

Problem: What problem is this project trying to address?

Microenterprises are the hidden engine of economic growth & those owned by women reap large social dividends, yet women are less likely to own businesses & their businesses are smaller and slower growing than men’s. The main barrier to growth of such microenterprises in marginalized areas derives from a lack of business and entrepreneurial culture or networks, leaving women without role models or access to information that is key. This in turn prevents women from accessing: - training in business administration & business development services, leaving women without the skills & management tools or information on how to become competitive; - technology and ICT tools, leaving women with limited access to information, new markets & more efficient and innovative ways of conducting business.

Solution: What is the proposed solution? Please be specific!

CREA addresses these barriers & accelerates women-owned micro enterprises by adding value at each stage of its microentrepreneur lifecycle analysis: 1. Inception: helps to select products & services that take advantage of market opportunities & community assets while providing access to information flows through formal & informal channels. 2. Discovery: actively seeks high potential microentrepreneurs & businesses. 3. Training: builds basic business skills that many microentrepreneurs lack. 4. Incubation: microentrepreneurs begin to apply new skills & execute their business plans & our network foster's collaborative entrepreneurship & connects them to other entrepreneurs, business clinics, product fairs & information. 5. Development: prepares for scale & financing by providing responsive consulting services and ICT tools as well as financing plans/edu & access to capital sources. 6. Sustainability: provides services to help them grow & scale sustainably & become CREA champions.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Rita de Luna Calderón, lives in rural Zacatecas. After her husband died she was left with three children and no way to feed them. Using her mother’s small tortilla-making shop after hours, she developed a series of amazing recipes for traditional Mexican pinole, horchata, pipián, and even chocolate. In 2009 she took CREA’s basic business training workshops taught by local professionals in her community. She learned about critical business skills and tools through hands-on activities based on information from her own business. She learned how to calculate her costs, set prices, incorporate legally and access public services, organize the business and production processes, as well as market and sell. She likes to say that while her business is small, she's built it like an international firm, with different departments and functions. Since then she has flourished, bringing on two employees. Through our business development program, CREA has helped her reach new markets in Mexico at national supermarket chains and in the US at boutique retailers. CREA continues working to improve her packaging, products, develop an online presence and use of technology to integrate machinery into her production process and to access new markets at home and abroad. Her chocolate has been featured in the Mexico special of an American gourmet magazine, as a featured Mexican ingredient for purchase across the US. Rita emerged as a role model in the CREA Network and encourages other women to grow their businesses and find a balance between their home and business lives.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Nonprofits, government & academic institutes attempt to address the challenges faced by women microentrepreneurs. Both government & nonprofits offer business training courses. These courses are inaccessible to marginalized women in terms of content & location. The content is highly theoretical and the examples are far from their reality; the courses are generally taught in the capital or in municipal capitals. No other organization in Mexico focuses on comprehensive business consulting with a similar participatory & practical approach, tailoring the services to their need & reality. The CREA Network is unique given that there aren't Chambers of Commerce or the like focused on rural microentrepreneurs that offer information services that are key at all stages, mentoring, clinics & events.

Founding Story

While doing field work in Zacatecas, touring the state & interviewing women microentrepreneurs, I realized they had more than problems in common, they all had an incredible passion and conviction that through hard work, they could lift their families out of poverty. And the one thing they kept asking me was how I thought that I could change my country and if that would happen through the research I was conducting. I realized then & there that I could use the education I had received and relations my family had to effect change in the lives of all these women by connecting them to new networks and, with them, building services that could provide them with the tools and resources they needed to turn that passion into reality. I had the unique opportunity to bridge my “outside” perspective with my “inside” knowledge to ensure that all this entrepreneurial activity led to the success of women-owned businesses & allow for new income & employment opportunities as well as poverty eradication.
About You
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About Your Organization
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How long has your organization been operating?

1‐5 years

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How long have you been in operation?

Operating for 1‐5 years

Social Impact
What solution(s) does your initiative address to help emerging entrepreneurs and small businesses grow and thrive in underserved communities? (select all applicable)

Access to financing, Access to talent, Access to supply chains, Access to technology, Access to economic opportunity.

What has been the impact of your solution to date?

Since 2008, CREA has worked with close to 800 women in Zacatecas and has started to expand into three new states, and our programs have benefited them and their families, reaching over 2,500 people. In Zacatecas, where CREA began activities, 90% of microenterprises fail in the first year. CREA reverts the average rate of failure among microentrepreneurs, allowing 90% of women to become successful entrepreneurs. Through the impact evaluation that Stanford has been conducting with CREA, we have found large, positive and statistically significant effects of these workshops on revenues, number of clients and profits as well as formal accounting practices. For example, 77% of the women CREA works with were not using any accounting method and now 80% of the women who participated in CREA’s applied business skills workshops utilized formal accounting procedures after the workshops, and on average participants experienced an earnings increase of 50%.

What is your projected impact over the next 1-3 years?

In three years we expect to reach over 6,000 direct beneficiaries and to have created over 4,000 new employment opportunities. Since the beginning we have conducted qualitative and quantitative evaluations as well as internal evaluations and reviews. This includes metrics around the performance of the women and the impact of our programs as well as qualitative data around satisfaction and self-esteem of our participants. We also have several indicators that look at the quality of life of the women we work with. Finally, it is important to note that through this mix of qualitative and quantitative surveys, we look not just at the number of jobs created but the quality of these jobs, both amongst our beneficiary microenterprises as well as internally though the jobs CREA generates.

What barriers might hinder the success of your project? How do you plan to overcome them?

In general, women microentrepreneurs do not attach value to business training & consulting since they have never had access to them. However, initially we had the great luck to find some microentrepreneurs that trusted CREA and who became our success stories, showing our programs' impact & thanks to several awards we’ve received, women now approach us. The lack of communication between women about their businesses has been difficult to overcome, because they don't see the benefits of collaborating & sharing information about useful programs and services. Our success stories are based on collaborative solutions to shared problems that foster new dynamics between the women. Also, in sustainable phase entrepreneurs like Rita are donating to CREA & becoming active collaborators & partners.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact
Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Implement client tracking, performance management, and impact assessment system.

Task 2

Begin operations in two new states through partnerships with organizations that offer complementary services.

Task 3

Provide training and consulting to 350 women entrepreneurs to develop, refine and market profitable products and services.

Now think bigger! Identify your 12-month impact milestone
Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Pilot financial education methodology and mobile/online sales tools for our beneficiaries.

Task 2

Scale model by training organizations to implement CREA´s methodology and monitoring.

Task 3

Publish microentrepreneur handbook for independent use by women across Mexico.

Tell us about your partnerships

CREA partners with corporations both as funders of particular events or activities & as mentors for the women with whom we work. CREA currently partners with the state and municipal governments that provide in-kind and monetary support to particular programs, CREA facilitates access to government programs and government offices help us outreach to new constituents. This year, CREA will be receiving support from at least two federal ministries and UNDP as well as foundations and the women. CREA’s planned expansion is predicated on partnerships with organizations with complementary skills.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

CREA needs to better market its services to potential partners & funders and to potential clients for the women´s businesses. We need to consider incorporating legally in US. We have a large dataset of information about the conditions in rural Mexico that can be leveraged. Given the insights and impacts CREA's achieved we have huge potential for scale and impact with right partners & resources.