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Study summary

Business management and interpersonal skills training for small businesses

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The one-day training programme on business management practices is able to increase the trained businesses’ sales but not their profits. Adding a day of interpersonal skills training doesn’t raise the effectiveness of the training.

General description

Microbusiness owners are offered either a one-day training programme on business management or a two-day programme including a module on interpersonal skills with a strong focus on customer care.

Aim

  1. To improve marketing, customer attention and business operations practices
  2. To improve business performance

Implemented by

BRAC-Liberia and Business Start-Up Center

Context

This intervention was tested in a country largely dominated by SMEs, which comprise about 96 per cent of all business entities.

Participants

Business owners who are clients of a microcredit institution. Participants are about 40 years old, 58 per cent are women and only 45 per cent have completed secondary school.

The average business size is about two workers. Average monthly sales are about US$625 and average monthly profits about US$225, although 45 per cent of the business owners report having experienced business losses over the previous six months. 

Businesses have been operating for an average of 6.5 years. They operate in a wide range of sectors, from construction to textiles and food services. Most are located in urban areas, and nearly all are formalised.

Activities

  • Business management skills training: A one-day training programme covering materials on financial literacy, record-keeping, sales and marketing.
  • Interpersonal skills training: A one-day training programme covering materials about self-understanding and how to relate to others, as well as the relevance of interpersonal skills to customer satisfaction and loyalty.

The training is delivered by certified instructors from a local firm with experience in business training. Participants are paid US$5 for transportation and opportunity costs and provided with US$7 worth of food and refreshments during the training.

Tweak

Some entrepreneurs’ firms are only offered the business management skills module while others are offered both the business management skills and interpersonal skills modules. A third group is not offered any training.

Results

  • Business owners offered either version of the training demonstrated better marketing, customer care and business operation practices eight months after the training.
  • Businesses receiving either version of the training were 16 per cent less likely to have lost clients in the following months, and they had a higher number of customers eight months after the training.
  • Business sales increased by 45 per cent during the following eight months for those receiving either version of the training. 
  • Average profits weren’t any higher among those that received training compared to those that didn’t, but the former were 10 per cent less likely to experience losses. 
  • The effects of the training weren’t significantly higher for those who received the additional training day on interpersonal skills than for those that didn’t, despite the latter showing slightly better results in customer attention.

Policy implications

  • A one-day training programme on business management can have short-term effects on business sales and reduce the likelihood of the business making losses.
  • Adding a one-day module on interpersonal skills doesn’t seem to significantly change the effectiveness of the one-day business management training programme.

Full study